MILAN (Reuters) – Data centers around Milan, Italy’s financial capital, are expected to add around two gigawatts of capacity over the next five years, ten times more than current levels, the chief executive of energy group A2A said on Friday.
The rapid expansion of data centers, needed to power artificial intelligence, promises to boost revenue for utilities like A2A, which will supply the electricity they need.
The province of Milan is currently home to around 200 megawatts of installed data center capacity, while the city’s peak electricity demand currently stands at 1.5 GW.
The new facilities will be connected to Italy’s high-voltage grid or directly to power plants, avoiding strains on the local distribution network managed by A2A, said CEO Renato Mazzoncini.
To meet growing demand, local authorities are supporting an increase in renewable generation and an increase in thermal capacity.
“We already have more than 3 gigawatts of additional thermoelectric power built, under construction or authorized in the region,” said Mazzoncini, at an event in Milan.
Despite Italy’s higher electricity costs compared to other European countries, the executive said data center developers are not discouraged.
“The cost of electricity is converging throughout Europe. A solar panel or a wind turbine produces at the same cost in Spain, Italy or Ireland. That is where the world is heading,” he said. He also said operators can also obtain power through purchase agreements with utility companies.
A2A is the third largest utility company in Italy in terms of number of customers and the largest in Lombardy, the region surrounding Milan.
(Reporting by Francesca Landini. Editing by Jane Merriman)