The European data center landscape is transforming
The digital infrastructure supporting our increasingly connected world is expanding at an unprecedented rate across Europe. According to recent analysis by Cushman & Wakefield, operational data center capacity in the EMEA region grew by 9% year-on-year, while the total market size, including facilities under construction or in planning, increased by 16%.
This surge in demand is creating both challenges and opportunities. Traditional data center hubs like Frankfurt, London, Amsterdam, Paris, and Dublin (the “FLAP-D” markets) continue to dominate but face significant constraints. Limited land availability, power restrictions, and increasingly stringent sustainability regulations are driving operators to look beyond these established locations.
Portugal is emerging as one of Europe’s most promising alternatives.
Why Portugal stands at a digital crossroads
Portugal’s strategic position on the global connectivity map creates a unique advantage. Lisbon serves as a critical landing point for major submarine cables, including the future Google Cloud cable (expected to be operational by 2026) and the 2Africa cables system, which connects 33 countries across Europe, Africa, and Asia.
While Lisbon’s active data center capacity currently stands at just 15MW, the development pipeline is expanding rapidly. Projects like AtlasEdge (9.3MW) and Merlin Properties (180MW) are already under construction. Most notably, the Start Campus project in Sines represents a potential game-changer—a €8.5 billion development aiming to become Europe’s largest colocation site with 1.2GW of capacity powered by renewable energy.
The renewable energy advantage
At WElink Energy, WE recognize that sustainable power generation is perhaps Portugal’s most compelling advantage in attracting data center investment. The country already produces more than 70% of its electricity from renewable sources, positioning it as a leader in green energy production across Europe. This achievement is particularly significant as data centers face increasing pressure to reduce their carbon footprint.
The renewable energy capabilities that make projects like our 219MWp Solara4 in Alcoutim possible are the same factors making Portugal attractive to data center operators seeking sustainable power solutions. The ability to couple data centers directly with renewable energy generation creates a powerful proposition:
1. Lower energy costs: Portugal offers industrial electricity prices below the European average
2. Enhanced sustainability credentials: Direct access to renewable power helps operators meet increasingly stringent ESG requirements
3. Future-proofing against carbon regulations: As carbon pricing increases across Europe, renewable-powered facilities gain a competitive advantage
Beyond energy: Portugal’s complete data center value proposition
While renewable energy is a critical factor, Portugal’s appeal extends far beyond power generation:
Strategic location and connectivity
Portugal sits at a critical juncture connecting Europe with Africa and the Americas. This geostrategic position, combined with extensive submarine cable infrastructure at points like Sines, Sesimbra, and Carcavelos, creates exceptional global connectivity.
Natural advantages
The country’s relatively mild climate reduces cooling requirements—a significant consideration for energy-intensive data centers. Portugal also offers a low risk of natural disasters, relatively flat terrain, and an extensive coastline that facilitates installation and cooling infrastructure.
Land availability and cost competitiveness
Unlike saturated markets like Dublin or Frankfurt, Portugal offers greater land availability and more competitive occupational costs. The country has invested heavily in fiber infrastructure and 5G networks throughout the country, enabling data center developers to consider locations beyond major urban centers.
The hybrid opportunity: Renewable energy and data centers
At WElink, WE see a natural synergy between our hybrid energy development model and the needs of the data center industry. The same approach that drives our flagship Solara4 project—combining solar PV, wind, and battery storage—offers an ideal solution for data centers seeking reliable, sustainable power.
By developing renewable energy assets in conjunction with data center facilities, operators can:
1. Enhance grid stability: Battery storage systems can provide backup power and help balance intermittent renewable generation
2. Increase load factor: Hybrid renewable systems deliver more consistent power generation across varying weather conditions
3. Reduce transmission constraints: On-site or nearby generation reduces dependence on grid infrastructure
Challenges remain, but momentum is building
Portugal still faces some hurdles in fully realizing its data center potential. Bureaucratic processes, including at the urban planning level, can delay projects. Additionally, as noted by experts like David Moura-George of Athena Advisers, Portugal is not yet a regulated market specifically for data centers.
However, this regulatory landscape can be viewed as an opportunity compared to markets where restrictions are increasingly stringent. The Portuguese government has shown commitment to digital infrastructure development, and companies involved in energy infrastructure like E-Redes and REN can help accelerate project approvals.
Portugal’s position in a rapidly evolving market
According to McKinsey, Europe will need between €240 billion and €289 billion in infrastructure investment by 2030 for the data center sector to meet growing demand and increase capacity from the current 10 gigawatts to 35 gigawatts. Portugal is well-positioned to capture a significant portion of this investment.
As a renewable energy developer with a strong presence in Portugal, WElink is uniquely positioned to partner with data center operators seeking sustainable power solutions. Our experience in developing utility-scale hybrid energy projects provides the expertise needed to power the digital infrastructure of tomorrow.
The path forward: A sustainable digital future
The convergence of data center growth and renewable energy development represents one of the most significant opportunities in Portugal’s economic landscape. By leveraging the country’s natural advantages, strategic location, and renewable energy leadership, Portugal can establish itself as a sustainable digital hub connecting Europe with the world.
At WElink, WE’re committed to developing the renewable energy infrastructure that will power this digital transformation. Through strategic partnerships, innovative hybrid energy solutions, and our deep understanding of Portugal’s energy landscape, WE’re helping to build a foundation for sustainable digital growth.
WElink’s role in powering Portugal’s data future
WElink develops utility-scale hybrid renewable power plants designed to meet the data center industry’s demand for stable, traceable, and low-carbon energy. By combining solar, wind, and battery storage, our projects offer a consistent and resilient power supply — ideal for high-demand operations like data centers and hydrogen production.
With proven delivery through projects like Solara4, and deep expertise in the Portuguese energy landscape, WElink is well-positioned to support data center operators seeking on-site or near-site green energy solutions that align with ESG goals and grid independence.
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This blog is based on information from Cushman & Wakefield’s 2024 data center market report, Athena Advisers market analysis, and McKinsey research on European data center growth projections.
