EDP Targets Iberia's Data Centre Boom with Low Power Prices

EDP Positions for Iberian Data Centre Power Demand

Portugal's leading utility, EDP, is strategically positioning itself to supply the rapidly expanding data centre sector in Iberia. The company plans to leverage the region's structurally low electricity prices to support over 18 gigawatts of data centre projects currently in development in Portugal and Spain.

Iberia's Growing Energy Advantage

According to CEO Miguel Stilwell de Andrade, Iberia holds a distinct advantage with its affordable power, a critical factor for energy-intensive data centres. This is reflected in strong electricity demand growth, with Portugal seeing a 3.6% increase and Spain a 2.8% rise, significantly outperforming the EU average of 0.4%. EDP projects a sustained 2% annual growth in Iberian demand through 2030.

Economic and Investment Outlook

EDP's strategy is bolstered by partnerships, such as the agreement to supply renewable power to the 1.2-GW Start Campus data centre. The favorable outlook is supported by structural factors, including the expected full repayment of the electricity system's tariff debt by 2028. Additionally, new regulatory frameworks guarantee pre-tax returns of 6.7% in Portugal and 6.58% in Spain, providing clarity and stability for future investments.

Summary

EDP is capitalizing on Iberia's unique position as a low-cost energy hub to secure a significant role in the burgeoning data centre market. With stable regulations and a clear path to lower energy costs, the company is well-positioned for sustained growth while supporting the region's digital transition.

FAQ

Q: Why is the Iberian Peninsula attracting data centre projects?
A: The primary reason is its structurally affordable electricity prices, which are significantly lower compared to many other European markets.

Q: How is EDP involved in this trend?
A: As Portugal's largest utility, EDP is actively engaging with these projects to become a primary supplier of power, as shown by its partnership with the Start Campus data centre.

Q: What ensures that electricity prices in Iberia will remain low?
A: Key factors include the full repayment of the electricity systems tariff debt by 2028 and stable regulatory frameworks that guarantee returns on network investments.

Source: Investing.com