Iberdrola and Echelon Data Centres have allied to develop and operate large-scale data centres across Spain.
The duo has created a new joint venture called Echelon Iberdrola Digital Infra. With investments exceeding €2 billion ($2.3 billion), it becomes the largest European joint venture to date between an energy utility and a data-centre developer.
The move signals Spain’s ambitions to be a central hub for Europe’s digital infrastructure and highlights the accelerating demand for energy-intensive artificial intelligence services.
A milestone for Europe’s digital and energy sectors
The transaction marks a significant convergence between clean energy production and hyperscale computing capacity. Both sectors are expanding rapidly, driven by the surging adoption of AI, cloud services, and high-density data processing. Executives involved in the agreement have repeatedly highlighted that future data-center growth will depend heavily on reliable access to clean, large-scale power sources.
The new company will primarily target hyperscale technology firms and providers of AI infrastructure. These clients increasingly require not only vast computing power but also stringent decarbonisation credentials. With energy consumption central to their business models, operators are under mounting pressure—both regulatory and reputational—to secure long-term renewable supply agreements.
South of Madrid
The joint venture’s debut project will be Madrid Sur, a 160,000-square-meter data center complex designed to deliver 144 MW of processing capacity. A 230 MW electricity connection has already been secured, giving the project one of the strongest grid positions in Spain’s data-centre ecosystem. The facility is expected to generate around 1,500 direct and indirect jobs.
The site’s estimated annual electricity demand is around 1 TWh, underscoring the scale of modern hyperscale operations. To ensure this consumption is fully renewable, the campus will incorporate an onsite solar photovoltaic plant and receive additional clean energy from Iberdrola’s broader renewable portfolio. This dual-supply approach reflects growing industry emphasis on 24/7 carbon-free energy—matching renewable output to consumption on an hourly basis rather than relying on annualised guarantees.
How the alliance works
Iberdrola will draw on its experience in renewable generation and energy-infrastructure development. Its responsibilities include identifying suitable land near grid nodes, securing power connections, and guaranteeing uninterrupted clean-energy supply.
Echelon will lead permitting, design, marketing, and day-to-day operation of the campuses. With a portfolio exceeding 2 GW across major European markets, it brings hyperscale-specific expertise in campus build-outs, customer acquisition, and sustainability-led engineering.
Echelon will hold up to 80% of the joint venture, with Iberdrola retaining the remaining stake. Iberdrola has already secured more than 700 MW in grid connections around Madrid—an increasingly scarce commodity in European markets—and is preparing additional projects that could bring total associated investments to approximately €6 billion.
For Iberdrola, the alliance strengthens its role as a major energy supplier to the global digital sector. The company already markets over 11 TWh annually to technology and data-centre clients worldwide, and this new venture embeds it even more deeply into the infrastructure behind Europe’s AI economy.
Background noise
Iberdrola is Europe’s largest electricity company by market value, with more than €120 billion in capitalisation. Serving over 100 million people and employing more than 44,000 staff, it has assets exceeding €160 billion across grids, renewables, and storage. In 2024, the company reported nearly €50 billion in revenue and €5.6 billion in net profit and contributed around €10.3 billion in taxes across its markets.
Since 2001, Iberdrola has invested more than €175 billion to support electrification, renewable deployment, and modern grid infrastructure. The company operates nearly 1.4 million kilometres of power networks across the US, UK, Brazil, and Spain, and manages 57,000 MW of generation capacity, over 45,000 MW of which is renewable.
Founded in 2017 and headquartered in Dublin, Echelon develops, owns, and operates large hyperscale campuses across Tier-1 European markets including Dublin, London, and Milan. Its portfolio exceeds 2 GW of capacity. The company is known for designing campuses powered entirely by renewable energy and for its energy-sharing initiatives, which help national grids integrate more renewables.
In 2024, Starwood Capital Group acquired 50% of Echelon through an €850 million investment, valuing the platform at around €2.5 billion and providing the financial base for its continued expansion.
Meanwhile, OpenAI has tapped the iPhone manufacturing giant Foxconn to design and build AI data center components in the US.
