THE AUSTRIAN DATA CENTRE MARKET – OPPORTUNITIES & CHALLENGES

In the fast-moving data centre industry, there are several emerging locations and there is no doubt that Austria, specifically Vienna is a strong contender. For many it is perfectly situated as a gateway to Eastern Europe and it also benefits from a strong and reliable infrastructure.

At BCS we have been involved in local projects for many years, with a local team on the ground for over two years now. Many of our clients already have facilities in the region and are currently developing others. We are also supporting other organisations that are currently prospecting or going through due diligence.

It has, as with most locations, both its challenges and opportunities. As it is just near to Germany and, in particular, the Frankfurt hub, we are able to draw on those resources and capabilities. There is also a strong local talent pool that is relatively untapped, and we are helping to develop this with our tried and tested training approaches. There is also some cultural synergy with Germany as well, although there is still a very distinct identity and Vienna is understandably proud of consistently ranking as one of the most liveable cities in the world year after year.

Perhaps the most important benefit is that Austria has a high percentage of available renewable energy* - as much as 87% of the country’s electricity comes from renewables - which is particularly appealing for organisations focussed on sustainability targets and should be a key consideration for organisations prospecting for development locations.

That said, the issue of power is also where potential developers face some major challenges. This is in part because the regulatory market is not ready yet to face the demand from prospective clients. This means that what the local utilities are willing to offer for each new scheme is just not in sufficient for the energy requirements for new hyperscale or even colocation developments.

Inevitably this will have to change in time but, as in many other European markets, there is currently a local debate on how energy demand can be met to support the growing data centre industry while considering the needs of the local communities at the same time. As a result, we are working closely with organisations to help them to navigate the somewhat restrictive regulatory market and protect our clients’ best interests by helping them secure the power allocations they require.

It is however worth noting that Austria is currently developing its own energy efficiency regulation (Bundes-Energieeffizienzgesetz (EEffG)), following a similar decision by Germany, with other countries expected to follow, to help bring data centres and their operations more in harmony with the local communities. While this is still in development, we obviously don’t know what this regulation will look like. However, what is clear is that there is an opportunity here to reintegrate data centres into the community, for example, through initiatives such as district heating schemes, providing better access to clean and cost-effective energy. It is an opportunity to contribute towards develop a better society, while continuing to develop the IT infrastructure that the same communities equally require, positioning data centres as grid assets rather than grid liabilities. This is an ethos that is at the very heart of our business, and we are well placed to drive this approach forward.

In conclusion, there are exciting opportunities ahead in the Austrian market but there are some challenges on the horizon that could turn into roadblocks and hinder progress. Our strong local presence and network of partners is ready to assist any potential newcomers to navigate the local complexity.

*Federal Ministry for Climate Action, Environment, Energy, Mobility, Innovation and Technology, “Energy in Austria 2023. Figures, Data, Facts''.