European data centers are under mounting pressure as the rapid growth of artificial intelligence drives electricity demand to unprecedented levels, and a new joint research paper argues that microgrids could provide a way forward. The study was published by Wärtsilä and AVK.
The report by Wärtsilä and AVK highlights how a combination of renewable energy, grid balancing engines, and energy storage can offer a cost-efficient and lower-emissions model for powering data centers, while simultaneously helping Europe advance its energy transition.
The report, ‘Data centre dispatchable capacity: a major opportunity for Europe’s energy transition,’ outlines the scale of the challenge. Power demand from European data centers is projected to climb from 10GW today to 35GW by 2030 – a 250% increase. Grid operators, already struggling with volatile energy prices and lengthy interconnection queues, warn that in some countries it may take up to a decade for new facilities to secure grid access. Without intervention, nearly 40% of AI-enabled data centers risk being operationally constrained by 2027.
Microgrids, the authors suggest, represent both a pragmatic and transformative solution. By enabling data centers to operate with a degree of independence from the grid, operators can avoid the long delays tied to interconnection. At the same time, once integrated with national systems, these microgrids can provide dispatchable power to stabilize networks and unlock new renewable energy deployment. The approach addresses two critical bottlenecks: the need for rapid capacity expansion in digital infrastructure and the need for flexible backup capacity in energy systems.
Anders Lindberg, President of Wärtsilä Energy, said that AI is accelerating electricity demand faster than grids can respond. “This is causing significant challenges for grid operators across Europe, who are struggling with rising costs and up to a 10-year waiting time for a grid connection,” he said. “By investing in microgrids, data centers can sidestep energy constraints, and with the right technology mix of renewables, grid balancing engines and energy storage, can ensure their emissions profiles and costs do not outweigh the huge benefits that AI brings.”
Transition Needs Mindset as Much as Engineering
The modeling presented in the study compares several real-world scenarios. An 80MW data center powered by engine-based plants combined with renewables and storage delivers the lowest levelized cost of electricity, at 108 EUR/MWh, while also generating fewer emissions than alternatives such as gas turbines. Importantly, the emissions profile improves further as sustainable fuels are phased into engine systems, positioning microgrids as a forward-compatible option for long-term decarbonization.
Ben Pritchard, CEO of AVK, added that the transition is as much about mindset as it is about engineering. “The answer to the challenges we face in combatting climate change is as much to do with changing behaviours as developing new technologies. The solutions outlined in this paper are not impractical; they are based on real-world cases and calculations. All that’s needed is for investors, operators, planners, and policymakers to recognize the widespread benefits of sharing dispatchable data center capacity with the grid.”
The concept extends beyond backup power. By acting as flexible capacity providers, data center microgrids can cut infrastructure costs, reduce wasted energy, and provide a smoother path for renewable integration. When grid connections are eventually secured, excess generation can be exported, offering operators an additional revenue stream while enhancing national energy security.
Mr. Lindberg emphasized the dual role of microgrids in addressing Europe’s digital and energy transition. “Through investing in flexibility, microgrids can have the lowest possible cost, while cutting emissions dramatically compared to other pathways including turbines. This flexibility can have a significant, positive impact.”
The analysis comes at a critical juncture. Europe’s digital economy is scaling rapidly as generative AI, cloud adoption, and high-performance computing transform industries from finance to healthcare. But energy constraints threaten to slow that growth. With grid bottlenecks projected to persist for years, the role of microgrids could shift from niche application to strategic necessity.
In combining resilience, cost control, and sustainability, the Wärtsilä-AVK report positions microgrids as a cornerstone technology not just for keeping pace with AI-driven data demand, but for ensuring that Europe’s energy transition remains on track.
Discover more from WIREDGORILLA
Subscribe to get the latest posts sent to your email.
