Why Spain and big tech are at odds over power-sucking AI data centres

Over the past years, some of the biggest names in the tech industry have announced plans for huge data centres in what’s dubbed ‘Empty Spain’, capitalising on these vast swathes of available land in a country with strong fibre-optic internet connectivity and renewable energy at competitive prices.

While Pedro Sánchez’s government is in favour of projects that put Spain at the forefront of AI technology, it doesn’t want big tech to use up the country’s resources, or pass on the costs to the Spanish public.

After all, pre-exisiting hyperscale data centres operated by the likes of Google or Amazon Web Services continuously consume 20 to 100+ megawatts (MW) of power – enough to power up to 80,000 homes.

As a result, Spain’s government has put forward a new draft bill – expected to be approved in October – which states that if a tech company wants to set up a data centre in the country, it will have to come prepared with its own energy supply.

Red Eléctrica, which manages the national grid, reports that consumption by data centres already in operation have registered year-on-year growth exceeding 75 percent in some months.

This is becoming a problem in a country which dealt with a nationwide blackout in 2025.

If data centres need more electricity distribution networks and more power plants, this could not only put further pressure on the grid but could also result in part of that cost being passed onto Spanish households, as has happened in the US.

The new Royal Decree put forward by Spain’s Ministry for Ecological Transition aims to prevent this. It concerns data centres that access power of at least 1 MW and requires them to cover 80 percent of their consumption through renewable self-consumption or power purchase agreements linked to Spanish renewable energy facilities.

In addition, these facilities must be new, commissioned no more than 18 months prior to becoming operational.

Global tech companies, unsurprisingly, are not happy with this new draft bill and claim that Spain is changing the rules half way through the process.

The most controversial point that most of the big tech players bemoan is that 80 percent of the electricity consumed by the data centre must be backed up by renewable electricity generated during that same hour.

The problem for these tech companies is that data centres operate 24 hours a day, but the sun doesn’t shine all this time, and the wind doesn’t blow all the time either.

The industry argues that complying with this condition would make some projects much more expensive or simply not financially viable.

Emilio Díaz, president of the Spanish Data Centre Association has demanded that the government put a stop to regulations drafted “behind the sector’s back” and has proposed a reform based on dialogue instead.

According to Begoña Villacís, executive director of the association, the regulations jeopardise some €9 billion in investment projects and also put 16,000 jobs at risk.

Three big developers have already warned that they will abandon them if the regulation is approved.

Villacís warns that regulatory barriers in the decree will cause projects to migrate to nearby countries like Portugal.

Industry experts and companies all claim that the decree from the Ministry for Ecological Transition sets a bad precedent that makes Spain less attractive as a destination for foreign companies.

Despite this, the Spanish government is sticking to its guns, hoping to prevent these data centres from saturating the network and causing electricity bills to soar.

There’s also the gargantuan amounts of water data centres require to operate which have to be factored, or that a recent study by Cambridge University found that such installations lead to heat domes in nearby areas.

These are two other risks that will no doubt also be of grave concern for Spain as it carves out a path in a fast-changing, AI-influenced world.