Northern Europe has long been an attractive destination for data centre investment due to its stable climate and sizable renewable energy resources. In recent months, however, authorities and grid operators have begun to impose limits as electricity network capacity struggles to keep pace with rapidly rising connection requests.
Denmark pauses new network connections
In March, the Danish state grid operator Energinet temporarily suspended new network‑connection agreements, citing a surge in connection requests. A spokesperson said roughly 60 gigawatts of projects are waiting for connections — far exceeding Denmark’s roughly 7 gigawatt peak electricity demand.
Energinet indicated that data centres account for nearly a quarter of potential new network‑connection projects, representing 14 gigawatts of the 60 gigawatts in the queue. Henrik Hansen, chief executive of the Data Center Industry Association (DDI), told CNBC that decision‑makers must realistically assess available capacity and cannot issue connection permits indiscriminately.
The Danish pause will last three months or until Energinet either prioritises requests or implements capacity‑increasing measures. Energinet said new political agreements and modified regulatory frameworks will be needed to determine how to prioritise the large number of connection requests.
Capacity figures for Denmark
According to the Data Center Industry Association, Denmark currently has about 398 megawatts of installed data centre capacity for 2026, with a further 208 megawatts under construction. DDI projects that capacity could increase by an additional 1.2 gigawatts by 2030. Large cloud providers’ mega data centres make up roughly 60 percent of Denmark’s present data centre capacity.
Pernille Hoffmann, managing director for the Nordics at Digital Realty, told CNBC that while electricity was previously considered abundant, the large demand coming from data centres is now misaligned with both the distribution network and the wider power system.
International context: moratoria and political debate
Resistance to data centres’ energy consumption is growing worldwide. In Europe, the Netherlands and Ireland have imposed full moratoria on data centre development in the past, although both countries later relaxed restrictions under certain conditions. In the United States, Maine came close to banning data centre construction, and states including Virginia and Oklahoma are also considering moratoria.
The debate has become political and ethical in some places, framing allocation of limited energy capacity as a choice between competing public needs — for example, between a data centre and a hospital. Sebastian Schwartz Bøtcher, an energy management expert at Schneider Electric, described the dispute between data centres and other businesses as an “energy‑policy hunger games.”
Alistair Speirs, chief executive of Microsoft Azure Infrastructure, emphasised to CNBC that data centres are essential infrastructure and that the key question is how quickly infrastructure and regulation can catch up with demand for computational capacity.
Local climate impacts: findings from Cambridge research
Beyond energy consumption, research points to local climate effects from data centres. A Cambridge study found that data centres can create heat islands, raising surrounding ground temperatures by as much as 9.1 degrees Celsius. The effect was observed not only in immediate vicinities but out to distances of ten kilometres.
The study reported that the warming effect did not drop by more than 30 percent even at seven kilometres, and researchers controlled for seasonal effects, long‑term warming trends and other confounding factors. Estimates suggest more than 340 million people worldwide live within ten kilometres of a data centre and experience higher local temperatures as a result.
Implications and next steps
Denmark’s move illustrates how grid constraints can force reassessment of data centre siting and expansion, even in regions previously seen as ideal. During the three‑month pause and ensuing regulatory reviews, authorities are likely to evaluate project viability and how to align electricity supply upgrades with data centre growth.
Resolving these tensions will require coordination between industry, grid operators and policymakers, investment in network capacity where appropriate, and consideration of local environmental and societal impacts as part of planning and prioritisation processes.
