Data Centres in Germany 2026: Infrastructure Policy Between Digital Growth, Energy Supply and Digital Sovereignty

The German government plans to double the capacity of data centres in Germany by 2030 at the very least. 

Capacity for artificial intelligence is set to quadruple. While this may initially sound like news of technological progress, it actually marks a fundamental shift in economic and regulatory policy. Global data traffic is growing by around 20–25% annually, while in some cases, the computing power required for AI applications doubles every 6–12 months. Data centres are therefore no longer just IT infrastructure. They are evolving into a central pillar of public services and a geopolitical factor, not to mention an increasingly contentious issue in energy and urban planning.

Digital sovereignty: The geopolitics of computing power in Germany

The political impetus stems from growing international competitive pressure. Demand for computing power is rising exponentially, driven not only by cloud services and data-driven business models, but also by the rapid development of AI applications. Training modern AI models alone can require several hundred megawatt-hours of electricity per run, meaning that a single large model corresponds to the annual consumption of several hundred households.

At the same time, Europe is structurally dependent on non-European providers; the three largest hyperscalers account for over 60% of the global cloud market. Therefore, the current aim to quadruple AI capacities is less a matter of wishful thinking in industrial policy and more an attempt to regain at least partial digital sovereignty.

Data centres as a new asset class

This development directly impacts the property and infrastructure market. Data centres are increasingly establishing themselves as a distinct asset class. 
A modern hyperscale site requires power of between 50 and over 200 MW, which is equivalent to the electricity demand of a city of between 100,000 and 300,000 inhabitants. At the same time, investment costs often amount to €8–12 million per MW of installed IT capacity.

The demand for suitable sites is concentrated in a limited number of locations with high-performance network connectivity and low latency, foremost among them the Rhine-Main region.

Energy Supply for Data Centres: The Central Challenge

Data centres are already among the largest industrial consumers of electricity. In Germany, their share recently stood at around 2–3% of total electricity consumption (approximately 10–15 TWh annually) – with a strong upward trend.

Forecasts suggest that this demand could increase to 20–30 TWh by 2030. Individual new campus projects require grid connection capacities that were previously reserved for traditional industrial clusters.

The scale becomes even clearer in an international context: globally, data centres currently consume around 1–2% of total electricity, potentially rising to 3–4% by 2030, driven by AI-related growth.

The Federal Government is seeking to address this bottleneck through a combination of regulatory adjustments and funding instruments. These include, in particular, prioritisation of grid connections, the expansion of renewable energy, and increased utilisation of waste heat. The latter, in particular, offers considerable potential: a large data centre can generate waste heat in the double-digit megawatt range, sufficient to supply district heating to thousands of households.

Regulation of Data Centres: From Commercial Operations to Critical Infrastructure

At the same time, a clear shift in the regulatory approach is emerging. Data centres are no longer treated as ordinary commercial operations but are increasingly regarded as infrastructure projects of strategic importance. The move away from the previous “first come, first served” principle for grid connections towards strategic prioritisation is a particularly striking example. Tax incentives and potential relief in relation to CO₂ pricing further illustrate the government’s willingness to deploy significant policy instruments to accelerate expansion.

New Areas of Conflict in Planning and Environmental Law

However, this political elevation inevitably gives rise to new areas of conflict. At the level of urban planning law, questions arise as to how data centres should be classified in the future and to what extent municipalities can or should actively manage their development. Traditional planning instruments are coming under increasing pressure, as these projects promise high economic returns while simultaneously occupying substantial land areas.

In addition, there are tensions relating to environmental and energy policy, particularly regarding electricity consumption, cooling water requirements, and the utilisation of waste heat.

Not least, municipal interests are affected, as authorities must weigh fiscal opportunities against infrastructural burdens – especially given that individual projects can occupy sites ranging from 10 to over 30 hectares.

Urban Development Agreements as a Steering Instrument

In practice, this means that urban development agreements pursuant to Section 11 of the German Federal Building Code (BauGB) will gain in importance. They provide a mechanism for binding arrangements on infrastructure requirements, energy supply concepts, and, in particular, contributions to local heat supply. At the same time, the need for advisory services is increasing significantly, as these projects involve numerous legal and technical interfaces, while the regulatory framework continues to evolve dynamically.

Data Centres in Frankfurt/Rhine-Main: A Hotspot of the German Data Centre Industry

The Rhine-Main region, and Frankfurt in particular, will remain a central hotspot for the foreseeable future. Existing grid infrastructure, proximity to one of the world’s largest internet exchange points, and established clustering effects serve as strong location factors. At the same time, the well-known constraints regarding land availability and grid capacity are becoming more acute, meaning that political steering efforts are likely to intensify further.

Conclusion

Overall, the planned doubling of data centre capacity marks a profound shift in German infrastructure policy. Digital infrastructure is becoming critical infrastructure, energy policy is becoming a prerequisite for digital competitiveness, and urban planning law is emerging as a key lever for location development in a market characterised by double-digit growth rates and multi-billion-euro individual investments.

For project developers, investors, and the public sector alike, this creates a dynamic yet complex field of action that demands new legal and economic solutions.

FPS supports all stakeholders along the entire value chain – from site development and planning and permitting issues through to contractual structuring and regulatory classification. Particularly in large-scale infrastructure projects such as data centres, it is crucial to take an integrated approach to legal, technical, and economic considerations and to develop sustainable solutions.

With our expertise at the intersection of real estate, energy, and public law, we assist operators as well as cities and municipalities in leveraging the opportunities of this dynamic market while managing the associated risks with legal certainty. 

Please feel free to contact us.