Europe

Dutch data centres feel the pinch of electricity price surge

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A man walks past Datacenter AMS1 Science park in Amsterdam, Netherlands, October 11, 2021. REUTERS/Anthony Deutsch

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AMSTERDAM, Oct 11 (Reuters) - Surging electricity prices are hurting smaller data centre operators in the Netherlands, an industry association said on Monday as it called for financial support from the government.

The Dutch Data Center Association asked political leaders to cap electricity prices, provide corporate tax breaks or introduce subsidies in support of businesses investing in cleaner energy, amid a global energy crisis. read more

"Nearly every business relies on a data centre, so they shouldn't take this lightly," the association's spokesperson, Stijn Grove, said. "This is a sector of critical importance. We should not wait too long to do something about these prices because there could be a knock-on effect."

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Roughly 60 data centre operators in the Netherlands make up around 2.3 percent of national electricity consumption, making them highly exposed to recent price spikes.

While larger companies are less vulnerable to price fluctuations, Grove said smaller companies generally do not hedge against energy costs. They are now being forced to pass them along to clients and scale back investments.

"A price increase of nearly tenfold is causing cashflow problems and is also problematic for investments in sustainable energy projects. They are coming under pressure at these levels because you need to have that cash," Grove said.

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Reporting by Anthony Deutsch; Editing by Andrew Heavens

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