The rules are being tightened for data centres, with the government introducing a series of stringent hurdles to keep only mature investment projects in the running and prevent a repeat of the distorted development model seen in renewables in previous decades.
From a €200,000-per-MW bank guarantee that will deter anyone without a serious plan, to a requirement that new solar and wind farms supplying energy to these power-hungry investments must be operational — not merely on paper — by the time the data centre is connected to the grid, every provision in the bill submitted to parliament on Saturday evening points to a tighter framework.
At a time when the rapid boom in artificial intelligence and cloud computing is fuelling international concern about data centres, and applications for similar investments in Greece now exceed 10 GW — compared with average daily electricity demand of just... 5–6 GW nationwide — the government aims to keep opportunistic investors out.
This is partly because the country’s already limited grid capacity cannot accommodate them, and partly to head off the public backlash that the spread of data centres is provoking internationally. They consume vast amounts of energy, putting pressure on power grids and driving up household electricity bills, as has happened in several US states.
The new restrictive framework is also intended to prevent a repeat of what happened in Greece in the past, when numerous renewable energy investors obtained permits but never built the projects, instead trying to sell them at a premium on the secondary market while tying up grid capacity and leaving much more mature projects waiting in the queue.
To that end, the bill introduces a total of 10 hurdles, adding new ones to those already included during the consultation phase, including the two below.
At least 60% of energy consumption must come from new renewable projects
At least six out of every 10 megawatt-hours consumed by a data centre must come from solar and wind power. But it is not enough for investors simply to have announced these projects and have them on paper: they must be operational by the time the data centre is connected to the grid, according to an addition made after the consultation.
If the renewable projects are not yet operational, neither will the data centre be connected to the grid. The aim of the provision is to ensure that the huge energy loads consumed by a data centre do not burden the country’s power system, but are instead met by new projects. These new projects will not be eligible for any form of support or subsidy. Compliance with the 60% requirement will be checked annually.
A fund for local communities
An annual fee of €15,000 per MW of maximum capacity will be introduced to benefit households and municipalities in the area where the investment is located. This means that a 200 MW data centre, for example, would deliver €3 million a year to the local community.
A bank guarantee of €200,000 per MW
Every application for a connection offer for a data centre must be accompanied by a bank guarantee of €200,000 per megawatt, valid for at least three years. This means a prospective investor in a 200 MW project, for example, would have to provide a guarantee of €40 million. The guarantee will be called in if it is not renewed at least 10 working days before expiry, or if the process of connecting the project to the grid is not completed.
Approved Environmental Impact Assessment
Every application for a connection offer must be accompanied by a complete Environmental Impact Assessment dossier for the project’s environmental permitting.
Lease agreement
The same applies to the land on which the data centre will be built, if it is leased or granted: the investor must submit a lease agreement with a term of at least 10 years.
Pre-approval of building permit
The application must also be accompanied by pre-approval of a building permit.
Annual revenue above 30%
The investor must have annual revenue exceeding 30% of the project’s construction cost (if it is connected to the IPTO system) in at least one of the past three years.
Taking on the cost of connection
Another deterrent to opportunistic investment is that the applicant must bear the full cost of the connection and any necessary upgrades to the power system that are caused exclusively by the data centre’s connection. This applies whether the neighbouring extra-high-voltage substation is partly congested or not congested at all.
Grid-capacity reservation fee
The next hurdle is a fee of €2,000 per MW for maintaining a grid-capacity reservation. The reservation may be extended for up to two years. To do so, the investor must pay an extension fee within the 15 days before the connection offer expires. The fee is set at €2,000 per MW for each additional month.
Steps after the connection offer
Once the applicant receives a connection offer valid for three years, they must accept it within two months of its issue. Within 12 months, and in any case before signing the connection agreement, they must submit to the operator a long-term bilateral power purchase agreement (PPA) with an electricity producer to meet the project’s demand.
Within the same period, they must also submit a technical report setting out, at a minimum, the data centre’s technical specifications, its level of energy efficiency and the cooling technology it uses. If the deadline is not met, the connection offer will be cancelled.