Data centers: Federal government aims for quadrupling by 2030

Contents

With a new data center strategy, the federal government aims to provide tailwinds for Germany as a business location and advance digitalization. Following recent announcements regarding AI data centers and the opening of several sites, Federal Digital Minister Karsten Wildberger and Federal Minister for Economic Affairs Katherina Reiche are now presenting their plan. This plan aims to ensure that data centers are accepted by the public, built quickly, and operated more sustainably than in other parts of the world. However, the challenges are diverse.

Computing capacity for the focus area of artificial intelligence is set to at least quadruple within the next four and a half years, while capacity for data centers of all kinds is to at least double. The benchmark for this will be the connected load, i.e., how much electricity the data centers require. In 2025, with 21 terawatt-hours, they were already among the top electricity consumers in the Federal Republic, accounting for four percent of the country's gross electricity consumption.

Upcycling for old sites

A major problem in the construction of new data centers remains the power supply. Without high voltage, little works – and grid operators are already overwhelmed with the expansion as part of the energy transition. Under the previously applicable rules, applications are processed according to their date of receipt, not by their actual probability of realization or even readiness for implementation – leading many grid operators to complain about phantom projects that still have to be approved and for which the grid is planned. This causes backlogs in application processing – and for data centers, a clear goal for the federal government. "These could be old power plant sites or large areas of former industrial plants," explains Federal Digital Minister Karsten Wildberger (CDU).

In Lübbenau, Brandenburg, for example, Schwarz Digits is using a former lignite power plant site for its major investment – the corresponding power connection is available there. In the Rhenish mining area, the site of the Garzweiler lignite opencast mine, known for protests, and comparable areas in Lusatia, there is little competition for land, but the necessary high-voltage electrical infrastructure is present. The reuse of older, electricity-intensive industrial plants and data center sites is also an option, as is the case with Telekom in Munich, which has installed its AI cloud cabinets in a former bank vault. Grid operator costs are regularly passed on to the users of the respective grid.

Municipalities should benefit financially

To ensure that this is not seen as a disadvantage and that data centers are viewed as an overall advantage, affected municipalities should benefit financially: "A goal of the strategy is that trade tax is partly levied where the data center is located," explains Karsten Wildberger. The "division" of trade tax, similar to that for wind turbines and large PV systems, could serve as a model: one part goes to the municipality where the facility is located, and another part goes to the municipal treasury where the operator is based. However, discussions on how this should be precisely implemented are not yet concluded. The Digital Ministry intends to work out details with the primarily responsible Ministry of Finance in the coming weeks.

However, the mere presence of power connections and land alone does not make Germany an attractive data center location. The price of electricity is considered a significant factor. Currently, however, data centers are not on the EU list of industries (KUEBLL) whose electricity prices may be subsidized. The gigantic appetite for electricity could also simply lead to increased electricity prices for all citizens and industries through consumption – if the annual consumption is to rise from 21 terawatt-hours in 2023 to 84 terawatt-hours by 2030.

This amount of electricity consumption, however, inevitably leads to massive waste heat. How this can be utilized, for example, to support district heating networks, remains one of the unsolved problems with the new data center strategy.

Cloud security should be subject to clear obligations

Beyond capacity targets, location, and energy issues, the federal government's data center strategy also includes some finer points: "For the development of a secure and sovereign European cloud infrastructure, critical components should exclusively be used from trusted manufacturers," the paper states. The word "should" already signals one of the current problems: complete data centers "Made in Europe" are currently virtually impossible to realize due to supply chains. This is also why the data center strategy relies on multiple layers of security without focusing on them: For federal authorities in particular, important criteria such as geo-redundancy, physical security measures, and self-sufficient energy concepts are mentioned. A classified cloud solution, which includes authentication, access restriction, and logging capabilities in accordance with classified information regulations, is also formulated as a goal, at least.

But it shouldn't stop there: "For the economic security of Germany and Europe, a European cloud infrastructure for networked components is also crucial," the strategy states. Because this is also an essential goal: significantly more components necessary for the operation of data centers should come from the EU in the future. The federal government would like to see corresponding preferential treatment for European providers in the upcoming "Cloud and AI Development Act," which the EU Commission is expected to present at the end of May.

The federal government's data center strategy is to be adopted by the cabinet on Wednesday. Federal Digital Minister Karsten Wildberger primarily wants to ensure the first step. "When you look at it on an international scale, we certainly have a particular need to catch up," says the former manager, who was surprisingly appointed to the cabinet by Friedrich Merz last spring. If the goals formulated in the strategy were exceeded, he would not object, in any case.

(kbe)