Europe’s Data Centre Journey: Grid Reforms Advance, Local Friction Builds

Research evidence excerpt

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M

Foundation

August 19, 2026 04:00 AM GMT

Morgan Stanley & Co. International plc+

Sustainability & Telecom | Europe

Arushi Agarwal, CFA

Equity Strategist

Europe’s Data Centre Journey:

Grid Reforms Advance, Local

Friction Builds

Lindsey C Zastawny

Equity Analyst

Rachel Fletcher, Ph.D.

Equity Strategist

Emmet B Kelly

Equity Analyst

European DC growth hinges on successfully navigating seven

key "gating factors" across five major markets. Our structured

framework maps the evolution of these factors using DC-related

developments as signals in each market. Our latest signals

include grid reform progress, growing brownfield investment,

and land use flexibility, rising support for moratoriums and

limited disruption from extreme weather.

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In our forecasts, data centre (DC) capacity in Europe

Morgan Stanley & Co. LLC

Stephen C Byrd

Equity Analyst

Morgan Stanley & Co. International plc+

Robert Pulleyn

Equity Analyst and Commodity Strategist

Morgan Stanley Europe S.E., Paris Branch+

Arthur Sitbon, CFA

Equity Analyst

nearly triples by 2030, reaching 21GW (+20%

Morgan Stanley & Co. International plc+

CAGR). However, the pace and direction of growth

Marina Fuentes Juan

will depend on how successfully developers can

Research Associate

address important gating factors. We identify seven

as key – power, grid access, equipment, land, and

water needed to bring projects online, alongside

Telecommunications Services

Europe

Industry View

Attractive

rising environmental and social concerns – all of

which pose increasingly significant constraints on

project delivery and timelines.

At present, European data centre policy remains highly fragmented. To understand

how the seven factors are evolving, we built a structured framework to identify DCrelated policy and project-level developments across the above mentioned seven

key constraints in Europe's largest DC markets: the UK, Germany, France, Spain and

Ireland. We use these developments to provide a market signal on the direction of

DC growth and to determine whether our forecasts remain on track.

Exhibit 1:

European DC Development Signals

PRIMARY

Power

Grid

Equipment and

…