Coalition to strengthen Germany as data centre hub and align Energy Efficiency Act with EU

Germany’s political landscape has recently seen a significant development with the formation of the coalition government. It comes after weeks of negotiations following the elections in February.

As an immediate programme for reducing bureaucracy, the parties have agreed in the coalition agreement to revise, simplify, and align the Energy Efficiency Act with EU standards.

Dr. Benedikt Beierle, an expert in data centres and digital infrastructure at Pinsent Masons, said: "If the future coalition partners are taken at their word, the plans would mean that the strict requirements for power usage effectiveness and waste heat utilisation imposed by the German Energy Efficiency Act on the construction and operation of data centres would be abolished.”

"However, whether this will actually happen remains to be clarified,” said Beierle.

The coalition agreement also states that the operation of data centres should be facilitated through practical interpretation and, if necessary, revision of the relevant regulations, as well as the practical implementation of climate neutrality and the facilitation of waste heat utilisation for feeding into district heating networks.

The coalition agreement, which is still subject to approval by the party committees, also includes further measures to strengthen Germany as a "beacon of Europe" for data centres. These measures include accelerating planning and approval processes, reducing energy prices, and facilitating the integration of data centres into the power grid – including by increasing transparency over grid connection capacity and accelerating the expansion and modernisation of power grids. In addition, the aim is to locate at least one of the planned European AI ‘gigafactories’ in Germany and promote edge computing.