According to Athena Advisers, the country's main competitive advantages, include its capacity to install this type of asset, energy costs, connectivity infrastructure and competitiveness in geostrategic terms.

Demand for data centres has soared in Europe, driven by the growth of digitalisation, rapid advances in AI technologies and their increased use. Accommodating this demand will require significant infrastructure investment over the next five years, and according to Athena Advisers, Portugal has the potential to capture a significant portion of the €240 billion to €289 billion in infrastructure investment that McKinsey estimates will be needed by 2030 for the data center sector to meet growing demand and increase its capacity from the current 10 gigawatts to 35 gigawatts [McKinsey data from an article published in October 2024 under the title “The role of power in unlocking the European AI Revolution”].

“There is increasing pressure on demand for data centers in Europe, which is expected to more than triple in the next five years, requiring greater data storage and processing capacity, greater power capacity and an increase in dedicated facilities. Accommodating this growth, which is expected to be extremely rapid, will involve making very large investments”, begins David Moura-George, general director of Athena Advisers Portugal. “In my opinion, it would be crucial for the Portuguese government to invest in reinforcing the networks and meeting these major energy needs, and companies like E-Redes and Ren can help speed up the approval of these projects,” argues the official.

The consultancy considers that Portugal is one of the European countries best positioned to accommodate the needs of this demand, which is expected to increase, and to which an efficient response will have to involve markets that combine reliable energy sources, sustainability concerns, robust infrastructures for access to energy and data transport, as well as land availability.

“Many mature European markets, such as Ireland or Germany, are currently unable to provide the full range of these conditions,” notes the head of Athena Advisers, stating that “Portugal, on the other hand, has the capacity to do so. It combines enormous growth potential typical of a still emerging market, with very competitive installation and energy costs in the European context, and, above all, a strategic geo-location between the European, American and African continents.”

Athena Advisers lists Portugal's main competitive advantages for attracting a relevant part of this wave of investment in data centers that will emerge in Europe. Firstly, with regard to the capacity to install this type of asset, offering greater availability of land and the capacity to convert existing facilities, as well as more competitive occupational costs compared to other European countries. Furthermore, Portugal has also made a strong investment in fiber, having a 5G network from North to South of the country, which makes it possible to decentralize this type of installation to regions with lower population density, further diversifying the geographic offer.

Cost of energy

The cost of energy in Portugal is also a competitive factor, with prices for industrial electricity consumption lower than the European average, while the country stands out in renewable energy. In fact, 73% of electricity consumption in Portugal is already generated by renewable energy sources, which puts the country well positioned in the production of green energy, which is a key resource in the search for data centers.

Connectivity infrastructure is another distinguishing factor of the country. Portugal currently receives, as a transit point or final destination, some of the most important intercontinental submarine cables, with emphasis on the points of Sines, Sesimbra and Carcavelos. A special example of this last point, which hosts the 2Africa cable system, which connects 33 countries, extending for 45,000 km across Europe, Africa and Asia.

Critical point

The installation of this type of infrastructure in Portugal clearly demonstrates, according to Athena Advisers, the country's competitiveness in geostrategic terms. Portugal is located at a critical point, which allows it to connect Europe with Africa, South America or North America, a location associated with a relatively mild climate and low risk of natural disasters, a relatively flat terrain and a vast coastline, which facilitates the installation of this type of project, where cooling issues are essential.

David Moura-George concludes by stating: “some challenges remain, namely bureaucracy, including at the urban planning level, as well as the fact that Portugal is not yet a regulated market in the area of ​​data centers. However, this last factor can also work from a more optimistic perspective, in contrast to markets that are already highly regulated and where restrictions are increasingly greater. In any case, the important thing to remember is that Portugal has the capacity to become an important European data center hub and benefit from this surge in demand and investment that is coming to Europe.”