Iberdrola and Echelon to Build Data Centres in Spain

Iberdrola, Global clean energy firm with headquarters in Spain, and Echelon Data Centres, a leading owner and operator of hyperscale data centre infrastructure in Europe, on Monday announced a strategic joint venture to build and operate data centres in Spain.

This is the largest binding agreement of its kind in Europe between an energy company and a developer of this type of infrastructure.

Through this partnership, Iberdrola will hold a 20% stake via its subsidiary CPD4Green and will be responsible for identifying and securing land with grid connectivity where the centres will be developed. In addition, it will provide 24/7 electricity to the sites.

Echelon, a technology company based in Dublin and owned by Starwood Capital Group, will hold 80% of the joint venture and will oversee development, design, commercialisation and day-to-day management of the company.

The first project of this joint venture will be Madrid Sur, a 160,000 sq. m. complex offering 144 megawatts (MW) of data processing capacity, with a secured 230 MW grid connection.

The centre, which is expected to create around 1,500 jobs and become operational before 2030, will require 1 terawatt-hour (TWh) of electricity. This demand will be met by an on-site solar photovoltaic plant, supplemented by additional clean energy capacity from Iberdrola.

David Mesonero Molina, Iberdrola’s Director of Corporate Development, said that this agreement strengthens Iberdrola’s strategy to facilitate the development of data centres, which have already become a key driver for electricity demand growth.

“The alliance signed with Echelon will allow us to leverage our portfolio of sites with grid connection and our capacity to provide these infrastructures with secure, clean and competitive energy 24 hours a day, 365 days a year,” he said.

David Smith, Chief Investment Officer at Echelon Data Centres, said that entering the Spanish data centre market has been a strategic goal for Echelon for several years.

“Spain offers significant advantages to our clients: access to large-scale renewable energy with some of the lowest prices in Europe and excellent construction and operational capabilities. Our partner, Iberdrola, is a global energy leader and we are delighted to have this opportunity to work together to deliver world-class data processing infrastructure for our clients,” he added.

Strong Growth Potential

Iberdrola already supplies more than 11 TWh of electricity to technology companies and infrastructure operators worldwide, making it a leading provider of electricity to data centres.

Its subsidiary CPD4Green, focused on enabling the development of data processing infrastructure, already has a site portfolio with 700 MW capacity in Spain and potential for an additional 5,000 MW.

In recent years, Spain has established itself as the gateway for global data traffic into Europe. Over 70% of data traffic heading into the continent passes through Spain, thanks to its fibre-optic network, submarine cable connections, access to clean and competitive energy and robust electricity grid.