Clifford Chance

The identification of new sites for data centres, the construction of the relevant buildings and the operation of data centres face significant regulatory challenges, which we will address from the electricity, urban planning, water, telecoms and public law perspectives.

Key issues

• Power availability is the most relevant bottleneck for data centres, as they are electrointensive consumers.
• Access to the transmission network may be subject to a tender process, and to the submission of a €40,000/MW guarantee.
• Power generators may share up to 50% of the generation capacity of their power access and connection points with data centres, insofar as both parties sign a self-consumption agreement.
• Land transformation may be required. Regions have approved special procedures to expedite planning amendments and urban management processes and licensing, and to secure private plots that are needed for offsite connection infrastructure by expropriation.
• Reporting obligations are imposed on data centres.

What types of data centre are considered in the current regulation?

We can differentiate between the following types of data centre for reporting purposes:

• Enterprise data centres. These are data centres operated by an enterprise, with the sole purpose of delivering and managing the enterprise's information technology needs.
• Colocation data centres. These are data centres in which one or more customers install and manage their own network or networks, servers and storage equipment services. The colocation customer purchases managed space, power and cooling capacity.
• Co-hosting data centres. These are data centres in which one or more customers are provided with access to networks, servers, and storage equipment on which to operate their own services and applications, where both the information technology equipment and the support infrastructure of the building are provided as a service by the data centre operator.

What is the main regulatory concern in deploying a data centre?

The main regulatory issue is without a doubt related to the availability of power for the data centre's consumption purposes, by means of a permit to access the grid, which will require not only available power in the grid but also free connection points for consumption.

Currently, access permits are granted by the network operator on a first come, first served basis, although connection to the transmission grid, when after the initial application (i) there are other consumers interested in this access and (ii) there is no available capacity, will be granted through a tender process run by the Ministry of Ecological Transition.

When the connection point voltage is equal or greater than 36 kV, the consumer must submit a guarantee of €40,000/MW as a guarantee of the seriousness of the application.

The access permit and guarantee are subject to the condition of signing a grid access contract within five years, whereby the consumer obtains at least 50% of the electricity power granted by the access permit in the P1 period for connection points whose voltage is equal or greater than 36 kV. This connection must be maintained for at least three years.

What to do when there is no available power in the grid or no available connection points for consumers?

Power generators may share their connection points for power generation with consumers, capped at 50% of the permitted access capacity for generation (unless the Comisión Nacional de los Mercados y la Competencia (CNMC) establishes another percentage), insofar as there is a selfconsumption agreement between the generator and the consumer.

It is not necessary for the data centre to be adjacent to the power plant, as the power plant and data centre may be linked by means of a private direct line, with no legal maximum length, provided that the power plant is a renewable energy facility.

Is it possible to apply for an access permit to the electrical grid without securing the plot where the data centre is to be located?

The CNMC (Circular 1/2024) has established that the grid access application must identify the plot where the consumption facility is to be placed, and a contract (CPs are admitted) securing the ownership or use of this plot must also be attached to the application.

Are there urban planning law conditions on deploying a data centre?

As with any other building or use of land, we can summarize this answer by saying that plots where data centres are to be located, when on rural land, must be classified as urban land under a general urban plan (or its amendment). This plan will be developed by a partial plan containing the detailed specifications to be carried out. Such plans will be enforced by reallotment and urban development projects (construction of development works may be subject to tender procedures).

Once the land is transformed into urban land, construction and use licences must be obtained.

Some regions have enacted special regulations entitling the regional governments to amend any urban plans, enforce urban development and reallotment projects and grant construction and use licences with a fast-track procedure. They are based on the general or regional interest of the investment.

How can data centres secure access to water?

Through (i) the municipal public water supply service, following the conditions for connection and supply established for this public service, in cases of low water consumption for data centres placed on urban sites, or (ii) a water concession granted by the state or regional water authority (from a river, a well or reused water).

Can data centres deploy offsite infrastructure (water, electricity, telecoms, etc.) without the consent of the owners of the plots through which the infrastructure passes?

There is no legal provision allowing the use of expropriation powers to secure the plots through which the service connection infrastructure passes when this infrastructure is privately owned by the data centre operator, so to deploy private connection infrastructure, consent must first be obtained from all intermediate owners of the plots between the general supply networks and the data centre.

As an exception, when the data centre is recognised as an investment of regional or general interest pursuant to the regional urban planning regulations, expropriation powers may be used to deploy this infrastructure.

However, REE, electricity distributors, telecom operators and municipal water supply entities may apply for the expropriation of these privately owned plots or of the easement of way over these plots, depending on the case, when they are the owners of such networks.

Special rules apply for infrastructure deployed as urban development works.

Are data centres obliged to report on their operations?

Operators of data centres with an installed information technology power demand of at least 500 kW must communicate to the European database the information and key performance indicators established by Commission Delegated Regulation (EU) 2024/1364 by 15 September 2024, then by 15 May 2025, and on 15 May every year thereafter.

Are data centre operators obliged to comply with the European Code of Conduct on Data Centre Energy Efficiency?

No, it is a voluntary initiative, although Member States must encourage data centres with an installed information technology power demand equal or greater than 1 MW to take into account the best practices referred to in said Code of Conduct.

Are data centres subject to the NIS2 Directive on cybersecurity?

In general terms, data centre operators are subject to the risk-assessment and reporting obligations laid down for cybersecurity purposes.