Bitkom: No clean industry without electricity subsidy for data centers

Should electricity for data centers in Germany be subsidized? While the industry has so far not been considered for the German industrial electricity price – despite considerable protests – a new opportunity may now arise. An expert report commissioned by Bitkom concludes that data centers play an increasingly important role for various subsidized industries, making them eligible for support themselves.

Data centers are considered crucial for Europe's economic location and thus for Germany, not least in light of global AI developments. “Data centers are the backbone of industry and the economy,” says Bitkom President Ralf Wintergerst. “If we want to protect energy-intensive industries, we must not leave their digital infrastructure out of the equation.”

Steel mills, the automotive industry, and other sectors for whose transformation the EU wants to allow state aid are so dependent on data centers that they themselves must be subsidized. The exclusion of data centers could even be contrary to European law. This is the conclusion of the expert report by Christian Koenig, an expert in EU state aid law at the University of Bonn.

30,000 gigawatt-hours by 2030

Electricity prices have a significant impact on the competitiveness of European industries, the report states. According to a survey by IDC, 46 percent of operating expenses are attributable to electricity. According to a study published last year on behalf of the Association of the Internet Industry Eco, operators of data centers in Germany pay 23 cents, a quarter more for electricity than in other EU states.

Despite all previous attempts by data center operators to reduce costs – for example, through greater energy efficiency, exclusive green electricity contracts, or the marketing of waste heat for heating purposes – costs and demand remain enormous.

According to Bitkom, German data centers currently consume 21,000 gigawatt-hours (GWh) annually, and demand is expected to grow significantly despite increasingly efficient computing units: to 30,000 GWh by 2030. This is primarily due to the increasing number of planned data centers, explains Bitkom.

Operation could become significantly cheaper if data centers were counted among the industries eligible for subsidies according to the guidelines for state aid for climate, environmental protection, and energy (KUEBLL).

“An addition to the calculation method is necessary,” the expert report states, specifically for “data traffic and data processing-specific parameters that adequately capture the high value creation significance of data centers regarding the Union's goals.”

Ministry for “appropriate consideration”

The association receives fundamental support for this initiative from the Federal Ministry for Economic Affairs and Energy (BMWE). It generally acknowledges the competitive factor of electricity prices for data centers but also sees the need for a European regulation.

“The German government is advocating for appropriate consideration of data centers at the EU level,” a spokeswoman told heise online upon inquiry. However, as this is still an ongoing process, no further details can be provided at this time.

Shortly after taking office, Federal Minister for Economic Affairs Katherina Reiche (CDU) wanted to quickly relieve operators – but experts from the industry had already pointed out early on that this would not be possible without changes to European law.

(wpl)