Data centers in Germany: What AI and Cloud it needs

If Germany wants to be digitally sovereign, it has to act now. Without your own data centers there is no your own cloud and AI. This is what an expert says about the situation.

Germany is at a turning point: The new coalition agreement of the Federal Government promises extensive support for the digital industry – from cheaper electricity prices to faster permits. Data centers play an important role in this; Without them, there are no cloud services, AI applications or a functioning administration. But can the planned measures keep pace with the rapidly increasing demand? And where does it still have to be improved?

Strengthen the data center location Germany

The coalition agreement recognizes the strategic importance of data centers and wants to make Germany a European lighthouse. Specifically, clusters are to create regional data center hubs and decentralized infrastructures, such as EDGE computing in distributed locations, are to be specifically supported. At least one of the planned European “Ai Gigafactories” for high-performance AI is to be brought to Germany. Such major projects promise enormous computing capacities for artificial intelligence.

Despite high investments, Germany threatens to fall behind in a global comparison. These initiatives are all the more important. At the same time, in the first quarter we feel an increasing demand for domestic solutions compared to the previous year-with constant marketing editions. This trend has already set up: For geopolitical and data protection reasons, many companies get workloads from public clouds back to Germany or put their IT strategy to the test. The demand for sovereign solutions is increasing.

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Faster network connections and permits

The central obstacle to the expansion of new data centers are lengthy approval processes and the tedious network connection to the power grid. The government wants to counteract here: The planning and integration of data centers into the power grid is intended to make it easier to make a digitization offensive in the power supply operators and more transparency via available network connection capacities. Operators should recognize faster where enough electricity is available and can make their connection applications quickly. In addition, approval procedures are to be consistently simplified and accelerated.

In other EU countries, data center permits often only last a few weeks, on the other hand, many months to years in this country-this discrepancy must be reduced. It is necessary to get from the building application to the groundbreaking faster so that the increasing demand can be operated and customers do not jump off.

Electricity cheaper, planning security higher

The crux of the industry is the high electricity costs in Germany. Electricity is the largest running cost block of a data center-and in this country we pay top prices in EU comparison. Therefore, the coalition agreement relies on several relieving measures for more competitiveness: the electricity tax is to fall to the minimum EU minimum, levies and network charges are reduced. A state-subsidized industrial flow price for key infrastructures such as data centers is also planned. All of this is intended to improve the economy of new projects – electricity costs are currently a large location disadvantage. However, it remains to be seen how quickly these relief will take effect.

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Customer demand for additional capacity is already increasing faster than the offer, but high energy costs slow the expansion. No time should be lost here so that the capacity expansion keeps pace. Because: Due to the fact that the Rhein-Main region is one of the most interesting Datacenter clusters in the world, national and international demand will continue to increase significantly.

Use waste, flexible destinations

The government also starts in the climate and environmental sector. The waste heat of the servers, which has so far often dripped unused, is to be used more in the future – for example by feeding into district heating networks to heat quarters. A technology -open approach is important: whether through innovative cooling or energy generation – every technology that saves electricity or waste heat is supported without rigidly prescribing how the climate goals can be reached.

Planned funding programs for sustainable data centers, for example for wasteland infrastructure, can help to meet the ambitious requirements. Overall, data centers are seen here as part of the climate protection solution, which motivates the industry to invest in green innovations.

State as a customer: sovereign “Germany-Stack”

The government wants to become anchor customers for domestic digital infrastructures. She plans an interoperable, European-capable “Germany-Stack”-a sovereign cloud and AI infrastructure that provides basic digital services. The state thus creates reliable basic demand by increasingly using domestic data center and cloud offers.

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Large digital projects of the state should prefer to rely on local capacities and thus serve as market impulse for the private sector. This demand by the state can give the industry a significant thrust. Basic utilization from public orders facilitates further investments and strengthens digital sovereignty. However, the Germany stack must be attractive with open standards so that the private sector also accepts it.

The promise of reducing bureaucracy also runs across all fields. Superfluous regulations and complicated proposals are to be dismantled, procedures should be digitized and accelerated. Digital approval portals, central contact persons and expert pools in the administration are planned, for example to quickly check projects. Industry associations have long emphasized that planning and approval processes in Germany are far too slow. Uniform, digital processes would save time and help smaller companies. Every week that a project can go online counts in global competition.

Are the measures enough?

Despite all the positive announcements, the question remains: Are these measures enough to cover the need and keep it up internationally? The demand for local infrastructures grows faster than the supply. It seems that parts of German politics have understood the seriousness of the situation in relation to the dark economic perspectives of Germany.

The planned steps are a good start, but their effect will only be felt with delay. Until cheaper electricity tariffs and faster permits actually become reality, a few years pass. Companies sometimes need a few years of lead time until new investments are made on the basis of the new laws.

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Nevertheless, the coalition agreement is optimistic: Many claims of the digital economy-from electricity price relief to faster procedures to digital sovereignty-were taken up; The direction is right: Germany should be sustainable as a location. Now it depends on the implementation so that the expansion of the digital infrastructure does not stall. It is important to roll up the sleeves in relation to the companies, but also in terms of politics in order not to head to an uncertain economic future. If this succeeds, today's decisions will bear fruit in a few years: a sustainable and sovereign digital ecosystem “Made in Germany”.

About the author: Jerome Evans is the managing director of Firstcolo GmbH, a provider of IT management services and operators of several data centers. Evans has been dealing with IT services, especially data services, and takes care of the construction and operation of data centers.