Big tech firms, including Microsoft and Amazon, are eyeing Europe’s retiring coal and gas plants as prime locations for new data centres — tapping into their existing power grid connections, water infrastructure, and cooling systems to meet surging AI energy demands. Utilities such as Engie, RWE, and Enel see these conversions as a way to offset decommissioning costs, secure lucrative long-term power contracts, and underwrite future renewable projects.
Many of the EU’s and UK’s 153 remaining hard coal and lignite plants are scheduled to close by 2038, joining the 190 that have shut since 2005. Repurposing these sites offers utilities stable, high-margin revenues, with tech companies reportedly paying up to €20/MWh in “green premiums” for low-carbon electricity. Depending on scale — some data centres can require up to a gigawatt — such premiums could translate into contracts worth hundreds of millions to billions of euros over decades.
The approach also addresses one of Europe’s key data centre bottlenecks: grid connection delays, which can stretch over a decade. Converting old plants offers “speed to power,” significantly accelerating deployment timelines. Projects range from retrofitting existing sites to building “energy parks” pairing renewable generation with direct supply to data centres.
Engie is actively marketing 40 potential sites worldwide, including its decommissioned Hazelwood coal plant in Australia, while EDP, EDF, Enel, and Britain’s Drax are pursuing similar strategies. Some developments, such as a planned 2.5 GW facility at a former German coal plant and multiple UK sites, are already in motion — though details remain scarce for security reasons.
Industry analysts say the trend represents a diversification of utility business models, creating new revenue streams and fostering long-term tech–energy partnerships. For hyperscalers, the premium is worth paying if it secures earlier market entry in the AI race.
