The data centre industry’s immense growth consequently brings rising power demands, with intensive workloads for technologies like cloud and AI requiring even more energy to run.

IDC expects global data centre electricity consumption to more than double between 2023 and 2028, while Schneider Electric figures suggest energy demands have the potential to exceed 1,000 Terawatt hours by 2026 — that’s the equivalent of Japan's total electricity consumption.

But all this growth is having a knock-on effect on the power purchase agreements (PPA), causing the market to rapidly expand. Dimension Market Research projects the PPA market to grow at a CAGR of 32.8% from 2025 to 2034, reaching a value of $7.65 trillion by 2034.

PPAs have the potential to provide a predictable and often lower electricity price for data centres, shielding them from market volatility, which can be combined with 24/7 renewable energy matching.

While data centres face challenges related to rising power costs and energy consumption, could the adoption of PPAs and 24/7 power matching strategies help support facilities reduce their environmental impacts while providing consistent access to energy?

Giovanni Scomparin, advisor corporate energy sourcing - Eurelectric (moderator)
Nesrine Biernacki, originator energy transition and industrial decarbonisation - EnBW
Helen Dewhurst, manager, strategy & transactions, power & utilities - EY
Andres Acosta, innovation director - LevelTen Energy

Andres Acosta, innovation director at LevelTen Energy, warned that the European energy market’s volatility has been intensified by geopolitical disruptions — which in turn have influenced PPAs across the continent.

Europe has sought to shift away from traditional energy means, a process that was expanded in the wake of Russia’s invasion of Ukraine, which caused gas shortages across the continent.

Efforts like the REPowerEU have reduced gas consumption by 18% over the past two years, but that puts increased pressure on sourcing power, at a time where demand from data centres is dramatically increasing.

Acosta outlined the market following the subsequent gas constraints: “We saw PPAs closing at prices that most developers and utilities would dream of signing, that's likely not going to happen anymore.

“Those prices went down throughout 2023 and half of 2024 reached sort of a valley that now has started stabilising as the anticipation of the winter helped to sort of stabilise.”

Following recent changes to the US and its relationship with Russia, Acosta suggested prices could further increase “to a certain extent”.

He said there have been record hours of negative prices in markets like the Netherlands, Germany, and Spain which have hit PPA negotiations, significantly affecting solar energy deals, for example.

Nesrine Biernacki, a senior originator for energy transition at EnBW, one of the largest utilities in Germany, joined Acosta’s view on PPA price decreases.

She said that the rise of negative hours and low capture rates has resulted in a higher appetite for more deals but with smaller volumes than before.

In addition, Biernacki said the impact on PPA pricing has resulted in heightened complexity in contract negotiations, with greater emphasis now placed on risk-sharing mechanisms.

However, she noted offshore wind remains an exception, maintaining premium status due to its consistent energy output.

Helen Dewhurst Manager for strategy transactions, and power utilities at EY, said the UK market has managed to keep its PPA market buoyant compared to its continental neighbours thanks to governmental support via the Contracts for Difference (CfD) scheme, despite uncertainties around zonal pricing reforms.

She noted that data centre operators remain keen to secure their positions, driven by sustainability goals and competitive pressures within the industry, adding: “Developers seem to be stacking CFD with PPAs, just to get a little bit of price security to secure their projects, but then also the get some of the upsides from corporate PPAs.

“I think a lot of companies are starting to think about 2030 targets, particularly data centres, who are in a very competitive industry where hyperscalers are setting the tone of very ambitious commitments and wanting to keep up with peers and meet the demands of the customers that might rent service space.”

Navigating Europe's regulatory complexities has emerged as a key consideration when entering PPAs, as highlighted by the panellists.

Dewhurst emphasised that while UK data centres currently benefit from a relatively supportive governmental stance through mechanisms like CfDs, broader European regulations pose additional layers of complexity.

In Germany, data centres face more stringent requirements, explained Biernacki, referencing the Energy Efficiency Act that mandates facilities to operate fully on renewable energy by 2027.

She said this regulatory push creates a diverse response from operators — some simply procure Guarantees of Origin (GOs), while others pursue dedicated asset-specific PPAs to ensure greater sustainability credibility.

However, matching the exact scale of a data centre's energy consumption to individual renewable assets remains challenging.

Biernacki suggested that asset sizes often do not align with customer requirements, adding complexity to managing these contractual relationships, underscoring that more structured coordination is needed between stakeholders to better navigate these regulatory and logistical hurdles.

While conventional PPAs have become a familiar tool for data centres, a more ambitious and precise model is emerging: 24/7 renewable energy matching.

The goal of 24/7 matching is to pair electricity consumption with renewable generation hour by hour, offering a deeper level of sustainability than conventional annual matching.

Acosta described the approach as increasingly desirable but admitted it introduces significant complexity and cost.

Because renewable sources like solar and wind generate intermittent and often unpredictable energy, precisely matching supply and demand hour by hour becomes significantly more complex, and expensive, than annual matching approaches.

“There's not a massive demand for 24/7, or 100% carbon-free energy (CFE) matching, because it's not mandated yet in many sectors,” he said, suggesting that to achieve genuine 24/7 matching purely through renewable generation assets would require substantial over-procurement — often impractical and prohibitively expensive.

Biernacki said that in Germany the challenges around intermittent generation mean providers must bundle different renewable assets, such as solar, offshore wind, and increasingly, battery storage, to approach genuine 24/7 coverage.

She emphasised that “blocking capacity somewhere has a cost,” highlighting the economic trade-offs facilities must consider in pursuit of absolute renewable matching.

“Batteries are going to help this 24/7 CFE, so for a multi-technology PPA, if we have wind, solar, and battery, I think it gives more reliability and more stable supply for the data centres.”

Yet, the drive towards 24/7 is gaining momentum, particularly among hyperscalers and large corporates motivated by ambitious environmental targets.

Dewhurst added that technologies and platforms allowing for granular energy certificates are maturing, potentially reducing future premiums.

She observed that current premiums in markets like the UK can add approximately £10 per megawatt-hour to baseline PPA costs, representing significant long-term commitments but underlining growing market interest.

“You do the maths, if they're a large power consumer who is trying to do a PPA to achieve price security and sustainability, but mainly price security, then it's unlikely to happen.”

As Europe's data centre sector continues expanding, its energy strategies must evolve in tandem. The panellists highlighted that closer cooperation among energy providers, governments, and data centre operators will be crucial.

Early planning and integrated thinking around PPAs and 24/7 matching weren’t just best practices stressed during the event — they are becoming necessary business decisions for operators looking to maintain competitive, sustainable, and economically viable data centres.