Investing in Data Centers: current challenges and future perspectives amid new authorization procedures and investment attraction mechanisms

As of today, Italy hosts approximately 160 Data Centers (“DCs”), with an energy demand of around 30 GW, over 70% of which is concentrated in Lombardia and Piemonte. However, demand is rapidly increasing in other regions, including Lazio and Puglia.

The main reference is to Edge DCs (ranging from 400 to 1,800 sqm with energy consumption under 5MW), which differ from Medium DCs (2,000 to 9,000 sqm with consumption over 5MW) and Hyperscale DCs (over 9,000 sqm with consumption exceeding 100MW).

In this context, recent weeks have seen significant developments that may impact the future deployment of DCs across the country. In particular:

• the introduction of a “new” single authorization procedure for the construction of DCs, as laid out in the draft of the so-called "Energy Decree", circulated on 24 July and expected to enter into force by the end of August;

• the release of a strategic plan for attracting foreign industrial investments in DCs by the Ministry of Enterprises and Made in Italy (MIMIT) on 16 July, currently under public consultation until 16 August (the “Strategy”).

The Single Authorization Procedure for DCs

To expedite the administrative processes required to obtain authorizations for operating DCs, Article 3 of the Energy Decree introduces a single permitting procedure.

Following the example of recent simplification measures for renewable energy plants, a similar “single authorization” or PAUR is now envisaged for DCs, aimed at streamlining and accelerating the acquisition of all permits and approvals necessary for construction and operation.

Specifically, Article 3 provides that:

• authorization for the construction or expansion of DCs (corporate, co-located, co-hosted, or campus-based) and their connected user networks (regardless of voltage) will be granted through a single permitting process by the authority responsible for issuing the Integrated Environmental Authorization. For projects up to 300 MW, this authority is the relevant Region or delegated Province; for projects exceeding that threshold, it is the Ministry of the Environment and Energy Security (MASE);

• in accordance with the principle of subsidiarity, the role of competent authority at the regional or provincial level cannot be delegated to sub-provincial bodies;

• the application for the single authorization must include all documentation and technical project materials required under applicable sector legislation, including – where necessary – authorizations for environmental impact assessments, landscape or cultural heritage clearance, water use permits, and air emissions;

• the authorization must be granted following a formal conference of services, and the process must be completed within 10 months from verification of complete documentation. Extensions are allowed only under exceptional circumstances and for no more than three months;

• if the project is subject to EIA screening and a full EIA is required, the related application must be submitted within 90 days, after which the request is deemed withdrawn;

• for DCs deemed of national strategic interest by the Council of Ministers, a special government commissioner will issue the authorization in accordance with the provisions of Decree Law 104/2023;

• for DCs that, as of the decree’s entry into force, have already obtained the necessary permits (including environmental approvals) but not the authorization for grid connection works, such authorization must be issued by the competent Region. This applies only to grid works above 220 kV, excluding lower-voltage infrastructure.

Mechanisms for Attracting New Investments

With its Strategy, MIMIT has launched a sectoral analysis to identify Italy’s strengths and weaknesses and implement all necessary measures to attract foreign investment, accelerate installation procedures, and create an attractive ecosystem for potential stakeholders.

The main areas of action include:

• defining the industrial classification of DCs, beginning with the introduction of a specific ATECO code (63.10.10) from 1 January 2025, under the broader category for “IT infrastructure, data processing, hosting and related activities”, with a dedicated ATECO code expected in 2027;

• introducing a specific land-use designation for DCs;

• simplifying the authorization processes (presumably through the Energy Decree);

• identifying the most suitable development areas, leveraging the National Federated Infrastructure Information System (SINFI) through multi-layer georeferencing of submarine landings, power grids, industrial brownfields, cabling, and renewable sources.

The Strategy is currently under public consultation, and all interested parties may submit proposals or comments by 16 August.

In parallel, it is essential to promote and incentivize the development of energy networks and renewable energy sources, in line with the expected growth in energy demand. Consideration should be given to a formal classification of DCs as energy-intensive consumers, subject to green conditionalities but also eligible for system charge reductions and lower energy costs.

This article is written by Piero Viganò, Giovanni Battista De Luca, Lorenzo Piscitelli, Ernesto Rossi Scarpa Gregorj and Paola Putignano. 

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