MILAN (Reuters) -Data centres around Italy's financial capital Milan are expected to add around two gigawatts of capacity over the next five years, a tenfold increase from current levels, the Chief Executive of energy group A2A said on Friday.
The rapid expansion of data centres, needed to drive artificial intelligence, promises to boost revenues for utilities like A2A, which will supply the electricity they need.
The province of Milan currently hosts about 200 megawatts of installed data centre capacity, while the city's peak electricity demand currently stands at 1.5 GW.
The new facilities will be connected to Italy's high-voltage grid or directly to power plants, avoiding strain on the local distribution network managed by A2A, CEO Renato Mazzoncini said.
To meet the rising demand, the local authorities are supporting a ramp up in renewable generation and an increase in thermal capacity.
"We already have more than 3 gigawatts of additional thermoelectric power either built, under construction or authorised in the region," Mazzoncini, speaking at an event in Milan, said.
Despite Italy's higher electricity costs compared to other European countries, the executive said data centre developers are not deterred.
"The cost of electricity is converging across Europe. A solar panel or wind turbine produces at the same cost in Spain, Italy or Ireland. That's where the world is heading," he said. He also said that operators can also secure power through purchase agreements with utilities.
A2A is Italy's third largest utility in terms of customer numbers and the largest in Lombardy, the region around Milan.
(Reporting by Francesca Landini. Editing by Jane Merriman)
