• Server expansion in the US and China making great strides, German share declining
• Artificial intelligence increases power consumption in data centres, but two-thirds are already carbon-neutral
• Frankfurt remains Germany’s computing power hotspot, Berlin is catching up
• Bitkom presents new study on the data centre market in Germany

The German data centre market is growing, but is losing importance internationally. The US and China in particular are pulling ahead, and Germany is falling behind in terms of its share of the global server base. While Germany’s 2.4 million servers currently account for 2.5 per cent of the global installed base, in 2015 this share was still 3.5 per cent. Data centre power, measured in watts, also clearly shows the gap, especially when compared to pioneering nations such as the US and China: Data centres in Germany currently have an IT connection capacity of 2.7 gigawatts, which is expected to rise to 4.8 gigawatts by 2030. In contrast, the United States has around twenty times more capacity than Germany, with 48 gigawatts currently and around 95 gigawatts in 2030. These are the findings of the latest Bitkom study ‘Data Centres in Germany: Current Market Developments 2024′, conducted by the Borderstep Institute. According to the study, China will be in second place worldwide with 38 gigawatts in 2024 and 64.3 gigawatts in 2030. Data centres are the backbone of digitalisation. Hardly any company or private household can do without the services provided by data centres, and public administration can no longer function without them,’ says Bitkom CEO Dr Bernhard Rohleder. In the United States, two to three times as much capacity is added every year as is installed in Germany. It is high time to take countermeasures. There is no digital sovereignty without data centres.

Germany continues to have the highest computing capacity in Europe. Operators are currently investing €2.9 billion a year in buildings and building services, and a further €10 billion in IT hardware. However, in relation to its economic strength, Germany’s computing power is low by international standards. As a percentage of GDP, Germany’s data centre connectivity (610 kilowatts per billion euros of GDP) is lower than, for example, the UK (670) or the Netherlands (930). Ireland tops the list (2,310), largely due to the presence of large technology companies in the country. It is followed by China with 2,100 and the US with 1,700 kW of installed capacity per billion euros of GDP. Rohleder: ‘As the world’s third largest economy, we must not lose touch, but keep pace with the leading nations. Germany must become more resilient, more technology-oriented and more capable of action – and this is only possible with a strong and efficient IT infrastructure.

Cloud data centres drive growth

The growth in data centre capacity is being driven primarily by the increasing adoption of cloud computing. Cloud data centre capacity has virtually doubled over the past five years, from 630MW in 2019 to 1240MW in 2024. Cloud data centres currently account for 45 per cent of the market, up from 29 per cent in 2019. The edge data centre market is also picking up, albeit from a relatively low base, with a connected load of 180 MW in 2024. Traditional data centres will continue to operate, but with a downward trend that is already visible (2024: 1,310 MW). In total, there are currently 2,000 data centres in Germany with a connected IT load of more than 100 kW. This includes around 100 very large data centres with a capacity of more than 5 MW.

They account for almost half (48 per cent) of Germany’s computing power. Whether cloud, traditional or edge, Germany’s data centres have a total IT connection capacity of 2,730 MW, up from 1,590 MW ten years ago.

Energy demand rising – partly due to AI

Demand for electricity has also risen – and will continue to do so, partly due to the growing importance of artificial intelligence. In 2024, it will be 20 billion kilowatt-hours – up from 12 billion kWh in 2014. What does the future hold? The Bitkom study looks at various scenarios: in the case of extreme growth in capacity, energy demand could rise to as much as 37 billion kWh per year. If the current trend continues linearly, energy demand will rise to around 31 billion kWh by 2030. If above-average efficiency gains are achieved through modern infrastructure, hardware and software, the increase in energy demand for data centres will be much lower, at 25 billion kWh in 2030. However, given current developments, Bitkom considers this scenario to be unlikely.

In a survey of data centre operators and experts conducted as part of the study, 80 per cent said that power consumption in data centres will increase due to the increased use of artificial intelligence. 71 per cent also expect AI to increase power density, meaning more computing power in less space. Half (48 per cent) expect increased energy efficiency, and almost as many believe that AI will accelerate the growth of the data centre industry in Germany as a whole. A quarter expect water consumption to increase as AI, like high performance computing, requires more cooling. Operators are currently adapting data centre hardware to meet the growing demand for AI applications.

Fifteen per cent are already using specialised hardware for AI applications on a large scale, while 44 per cent are using it on a smaller scale – and a further 20 per cent are planning to do so. Currently, 15 per cent of data centre capacity in Germany is dedicated to AI and high performance computing, and this figure is rising sharply. The forecast for 2030 is already around 40 per cent. Artificial intelligence will shape the economy, and we need more artificial intelligence in and from Germany. Germany and Europe must invest more in specialised hardware for AI,” says Bitkom CEO Dr. Bernhard Rohleder.

CO2 emissions fall slightly – despite increasing performance

At the same time, operators are striving for greater sustainability and climate friendliness. Greenhouse gas emissions from German data centres are set to fall slightly between 2014 and 2024, despite the significant increase in capacity. This is mainly due to the use of electricity from renewable sources and increased energy efficiency. While CO2 emissions based on the German electricity mix were 6.9 million tonnes of CO2 in 2014, they are expected to be 6.5 million tonnes in 2024. The Energy Efficiency Act, which came into force in November 2023, stipulates that from 2027 all data centres with an IT connection capacity of 300 kW or more must be carbon neutral, at least on paper. This already applies to 66 per cent of all data centres in Germany, including smaller ones.

The vast majority of data centre operators are therefore ensuring that their power supply is climate-friendly. Three-quarters (74 per cent) already have green energy contracts, while 27 per cent buy CO2 certificates or generate their own electricity from renewable sources. Among operators with an IT load of more than 5 MW, the proportion of those buying CO2 certificates is significantly higher at 50 per cent.

The more sustainably data centres are operated, the smaller the carbon footprint of digitalisation will be,” emphasised Rohleder. “It is important that the next federal government pushes ahead with the energy transition on a massive scale, so that data centres are not only carbon neutral on paper, but also in practice.”

There are still many hurdles to overcome when it comes to waste heat recovery

At the same time, data centres can help decarbonise the heat supply – for example, by using their waste heat to heat residential or commercial buildings. The Energy Efficiency Act requires new data centres with a capacity of 300 kW or more to use some of their waste heat. 63 per cent of the operators surveyed do so in principle, with half of them using only a small proportion of the waste heat, usually for their own purposes. However, the proportion of operators using waste heat has increased significantly overall, from only 39 per cent in a 2019 survey. From the operators’ perspective, the biggest barrier to waste heat recovery is the lack of customers for the waste heat. Rohleder: “Many data centres would even provide their waste heat for free. However, in many places the necessary modern heating networks do not exist. The fact that new data centres can currently only be built where such heating networks are available or planned is a disproportionate constraint on expansion. Data centres are needed where there is a high demand for computing power. With such requirements, which go far beyond existing EU rules, Germany is undermining efforts to expand the digital infrastructure and increase its resilience.

Frankfurt and Berlin the most popular data centre regions

Where are the most popular data centre locations at the moment? The Frankfurt metropolitan region and the surrounding Rhine-Main area continue to be Germany’s number one data centre location, with around 1,050 MW of IT connection capacity currently concentrated here – more than a third of Germany’s total capacity. The region is expected to see the strongest growth, with an additional 1,800 MW currently planned. Berlin-Brandenburg is also emerging as a major data centre location, but remains well behind Frankfurt: 140 MW of IT capacity is currently available around the German capital, with a further 900 MW in the pipeline. The Rhineland is also gaining in importance, as are the Munich and Hamburg conurbations.

For operators, the most important location factor is a reliable power supply. Germany scores very well on this criterion by international standards. Particularly important location factors for which Germany is rated very highly are also connectivity to Internet hubs and data protection. Significant locational disadvantages are seen in the cost of electricity, lengthy and bureaucratic approval processes, regulatory requirements and the lack of available skilled workers.

Bitkom calls for ‘Action Plan for Data Centres

In order to promote Germany as a business location and make it attractive for data centre operators, Bitkom is calling for an ‘Action Plan for Data Centres’. Dr. Bernhard Rohleder, CEO of Bitkom, said: “The next federal government must sustainably strengthen data centres in Germany in order to remain competitive. This requires the right regulatory framework, lower electricity costs, an active location policy and optimised planning and approval processes.

As part of such an action plan, Bitkom proposes, among other things, a revision of the Energy Efficiency Act, in particular with regard to the required minimum standards for power usage effectiveness (PUE) and the proportion of reused energy (ERF). Reporting requirements should also be harmonised with EU requirements. Competitive electricity prices are also needed. The very high cost of electricity by European standards is currently a major locational disadvantage for German data centres,” says Rohleder. In addition, in other EU countries the approval process for data centres usually takes only a few weeks, whereas in Germany operators often face approval and planning procedures that take years. To meet the growing demand for data centre capacity, approval and planning processes need to be standardised, simplified, digitised and accelerated,” says Rohleder. The data centre location needs a boost – and fast. Successful digital transformation of business and government is not possible without high-performance data centres.

Methodology note: The information is based on a study conducted by the Borderstep Institute on behalf of Bitkom. The study was supported by EnBw, NTT, Microsoft, Vertiv and Rittal.