Growing Investor Interest in Poland's Data Center Sector Amid Energy Challenges

Poland is emerging as a significant hub for data center investments, bolstered by a stable energy supply and strategic administrative changes aimed at attracting foreign capital. As outlined by Baker McKenzie, a global law firm, the demand for data centers in Poland is rapidly growing, driven by advancements in artificial intelligence, cloud computing, and the proliferation of Internet of Things (IoT) devices. This shift is occurring against the backdrop of increasing restrictions on data center developments in other European countries, such as the Netherlands, France, and Ireland, due to energy supply issues.

The data center industry is especially energy-intensive, consuming approximately 40 times more energy than other forms of commercial real estate. Agnieszka Skorupinska, a partner in Baker McKenzie’s Warsaw office, emphasized that the availability of clean and stable energy sources, including renewable energy systems (RES) and nuclear energy, is crucial for this sector's growth in Poland. The firm predicts that the number of data centers in Poland rose to 123 by 2024, with an expected market capacity increase to nearly 500 megawatts by 2030, reflecting Poland's leadership in Central and Eastern Europe (CEE) in this field.

According to Weronika Achramowicz, managing partner of Baker McKenzie’s Warsaw office, Poland's potential as a data center location is becoming increasingly attractive to institutional investors and corporations. Despite facing procedural challenges, the country’s competitive advantages, particularly with planned investments in nuclear power, are set to strengthen its appeal for long-term, sustainable technology investments.

The Polish Power Grid (PSE), responsible for electricity distribution, is under significant pressure due to the increasing demands from data center operators, who are requesting record-high energy supplies. As the demand for energy grows, the grid's current infrastructure and regulatory frameworks must adapt to support both the burgeoning RES capacities and the energy consumption needs of data centers.

The geographical distribution of data centers in Poland is concentrated in large cities, especially Warsaw, where the majority of commercial server space is located. However, the environmental impact and local zoning regulations play a critical role in determining the feasibility of new developments. Baker McKenzie experts point out that data center investments must incorporate Environmental, Social, and Governance (ESG) considerations, emphasizing the need for sustainable practices in site selection and energy consumption.

Investors are also exploring the potential of brownfield sites—previously developed land that can be repurposed for data centers—offering strategic advantages in terms of location and existing infrastructure. As noted by Weronika Guerquin-Koryzma, head of the Real Estate Practice at Baker McKenzie’s Warsaw office, utilizing brownfield sites can significantly enhance the project's efficiency and reduce the time to market.

In conclusion, Poland's data center sector is at a pivotal juncture, driven by both external pressures from other European nations and internal opportunities presented by its energy landscape. The continued development of renewable energy and nuclear power is likely to play a critical role in shaping the future of data center investments in Poland, making it a focal point for global data infrastructure development in the coming years.