The rapid growth of data centres driven by the artificial intelligence (AI) boom is raising significant concerns about their environmental, economic, and social impacts, prompting calls for more careful regulation of this expanding sector.

Data centres, which support cloud services and AI applications, require substantial land, energy, and water resources, placing increasing strain on local infrastructure. Globally, their rising power consumption highlights the challenges involved. In Ireland, data centres accounted for 21% of national electricity use in 2023, with projections indicating a rise to 32% this year. Similarly, in the United States, the share of electricity demand attributed to data centres is expected to increase from 4% in 2023 to 12% by 2028.

Public opposition is also mounting. A recent Gallup poll found that 71% of Americans are against the construction of data centres within their communities. Beyond resource consumption, researchers at Cambridge University have documented a “data heat island effect,” where concentrated data centre operations elevate local temperatures, adding another layer of environmental impact.

Faced with these realities, policymakers are focusing less on whether data centres are needed—they are deemed essential—but more on how their development is managed. Experts emphasize the importance of proactive regulation to balance growth with sustainability. Experience shows that early, clear rules help distinguish viable projects from unsustainable ones and align private investments with public interests, ultimately avoiding costly interventions after problems arise.

Ireland’s experience highlights this approach, where regulatory tightening occurred only after data centres exerted excessive load on the electrical grid. In contrast, New York State has implemented a temporary moratorium on new data centre projects, reflecting increasing local opposition and delays.

Spain, while not yet under the same level of pressure, anticipates rapid growth in its data centre sector due to a strong economy and ample renewable energy capacity. Electricity demand projections for computing power suggest needs may reach four gigawatts by 2030, but permit requests already far exceed this figure, signaling potential future challenges.

In response, the Spanish government launched a public consultation in August on a new regulatory framework aiming to guide sustainable data centre development. The proposed rules treat access to the electricity grid as a strategic and limited resource, requiring data centres to demonstrate credibility, viability, and contributions to the economy and society before approval.

The framework introduces mandatory energy and water efficiency standards, alongside requirements for transparency through disclosure of key performance indicators to monitor resource use and discourage waste. It also mandates that any increase in electricity consumption by data centres be matched by additional renewable energy capacity, aligning economic growth with environmental goals.

This approach is designed to prevent new data centre demand from overshadowing existing users or increasing reliance on fossil fuels, instead promoting investments in clean energy projects. Recognizing the strategic importance of data centres, the framework also includes measures to enhance Europe’s digital sovereignty by safeguarding data management and infrastructure governance, while encouraging expansion of the continent’s technology sector.

Spain's strategy reflects broader concerns about balancing technological advancement with sustainable resource management, aiming to ensure that data centre growth occurs within the capacity of power systems and supports the wider energy transition, as Europe seeks to reduce its dependency on external digital capabilities.