Europe inaugurates first microgrid data center in Dublin

Just outside Ireland’s capital, Dublin, a data center has become the first in Europe to turn to a standalone microgrid, called an “island”, to keep its servers running.

Europe is looking to capitalize on the AI ​​boom while addressing electricity connection delays that have persisted for decades. The European Commission estimates that the bloc needs at least €1.2 trillion ($1.39 trillion) in investments by 2040. In some cases, companies cannot wait for bottlenecks to ease and are turning to their own energy sources.

The Dublin facility, operated by power supply solutions provider AVK and digital infrastructure developer Pure Data Center Group, could mark the continent’s first step towards a private energy ecosystem.

Microgrids are localized energy systems that can generate, store and distribute energy. The systems are already being widely used in the United States, where the rise of data centers in hot areas such as Texas and Virginia has led to a growing need for off-grid power.

AVK and Pure DC claim their Dublin facility is Europe’s first data center operated by an active microgrid.

“As these data centers grow and we see AI workloads and data become more of a feature of our everyday lives, that just puts more stress on the network. So we have to look at a different solution,” AVK CEO Ben Pritchard told CNBC.

Systems are not without challenges. Regulatory hurdles could slow their deployment, and the long-term success of microgrids will likely depend on whether their energy sources are reliable and sustainable.

Ireland is one of two European countries to have put a moratorium on new data center applications as energy-intensive facilities put pressure on the national grid. The facilities consumed a staggering 22% of the small country’s energy in 2024.

Ireland’s national grid operator warned in late February that meeting energy demand could be “challenging” as consumers use electricity in new ways. It identified data centers as a key driver of that demand growth.

But late last year, Irish authorities eased the moratorium as the rise of AI changed perceptions of its economic potential.

All new data centers connecting to the grid must now provide dispatchable power (electricity that can be turned on or off depending on the needs of the national grid) or have the ability to store energy. They must also supply at least 80% of annual demand from renewable electricity generated in Ireland, according to guidelines set by the country’s regulator, CRU.

“The alternative in Ireland was to wait, literally wait for an unknown amount of time to be able to get a grid connection, and it’s still not possible to get a grid connection today. So creating a microgrid allowed us to move our project forward,” Pure DC president Dawn Childs told CNBC.

Childs, who was made a Dame in the United Kingdom for her engineering services, added that the project is intended to be both an immediate and long-term solution. “If we have to remain as an isolated solution, we absolutely can… However, to get the most sustainable solution and get back to providing services to the grid in Dublin, in the most limited area of ​​Ireland, our wish would be to get a connection to the grid.”

The Dublin data center, which can run both cloud and AI workloads, has a total capacity of about 110 megawatts. The total projected investment in the site is approximately €1 billion ($1.2 billion).

The facility is currently powered by natural gas engines with the ability to switch to hydrotreated vegetable oil (HVO). The site has also tested biomethane as an energy source.

If the Dublin data center eventually gets a grid connection, it will be able to offer dispatchable power and provide up to 20 MW of battery storage, Childs said.

The global microgrid market was worth around $29 billion in 2025, and the European market is expected to grow nearly 10% annually due to its aging infrastructure, according to Global Market Insights estimates. While investments are being made to modernize the national grid, companies are expected to increasingly turn to more immediate energy solutions.

Microgrids are already being used to power plants and industrial sites in Europe, but there aren’t many cases of them powering data centers compared to the US.

In addition to AVK, companies such as TISSUE and Siemens are competing to develop the technology, with Schneider Electricity Last year it opened a microgrid test lab in Massachusetts to test the systems in real-world conditions.

Siemens sees “potential opportunities” to deploy microgrids in data center locations and is currently in talks with several customers, a company spokesperson told CNBC. The issue is particularly relevant to the US market, but similar discussions are also being held in Europe, they said.

Siemens is also interested in using microgrids to support electric vehicle charging infrastructure and the decarbonization of ports.

AVK, which is expected to reach at least a billion-dollar valuation by 2030, initially focused on reserve and backup power generation before expanding to become a complete power solutions provider.

According to the company’s CEO, discussions and plans for microgrids were underway in Europe, but the U.S. market quickly surpassed the 27-nation bloc. “It’s just that the United States has such high demand that we’ve seen deployment a little faster than here in Europe,” Pritchard told CNBC, adding that the company is now seeing a new type of investor that is specifically interested in microgrids and not necessarily the data center itself.

“They are infrastructure funds that seek to build, own and operate microgrids and power data centers,” Pritchard said. He expects this type of asset class to mature in the next three to five years.

One of the biggest challenges facing the market is how microgrids are implemented sustainably, as much of the debate around the technology has revolved around the use of gas turbines or fuel cells, Diego Díaz Hernández, a partner at McKinsey, told CNBC.

“Getting these assets to participate in the network in theory and in practice are very different issues,” Díaz Hernández said.

“Technically speaking, it’s very feasible to do so, and we’ve seen examples of that in the US (where) grid operators are requiring 50 or even 100 hours of flexibility throughout the year to relieve pressure on the grid. So they’re not asking for much, but having the regulation and policy in place to allow that to happen is a big ask.”

Ensuring that the energy supply is reliable, as well as overcoming regulation, will also be key, Hernández stated. He noted that in the United States, about 30% of data centers are adopting microgrids or other behind-the-meter solutions, such as fuel cells and gas turbines, power sources that do not require a connection to the main grid. In Europe, the proportion was only 5% to 10% 18 months ago, but has since risen to around 20%, he added.

Challenges aside, the burden on data centers to provide their own power sources is clearly growing. Last week, US President Donald Trump said data centers “need public relations help” amid concerns about their impact on electricity prices.

In his State of the Union address, the president referenced America’s “old grid” and said major tech companies were forced to meet their own energy needs.

“It is clearly not in the core skill set of a data center to develop and build microgrids,” Childs said, adding that Pure DC had to hire specialist engineers to build the microgrid in Dublin.

Governments face a difficult balancing act when it comes to meeting the needs of Big Tech while ensuring they meet their sustainability goals.

“We are a real enabler for allowing large renewable projects to come online, allowing flexibility on the grid and ultimately allowing energy costs to come down for all consumers, both businesses and regular citizens, but it takes a while for policy and regulation to allow and facilitate that,” Childs told CNBC.