Towards Energy Sustainability in Data Centres: A Way Forward

Data centres are highly energy-intensive, yet they lack access to benefits reserved for energy-intensive companies at high risk of relocation. 

The increasing reliance on digital services is driving an unprecedented demand for data processing and storage infrastructure. Data centres, some of the most energy-intensive infrastructures globally, are central to the digital and artificial intelligence revolution. Their energy and water consumption can no longer be overlooked. 

Despite their high energy consumption, data centres remain ineligible for benefits designated for companies at high risk of relocation.

Furthermore, the ATECO code (63.11), assigned to data centres as of 1 January 2025, does not qualify for the benefits available to energy-intensive companies.

The European and National Regulatory Framework

With Regulation (EU) 2024/1774 of 13 March 2024, the European Commission has set up a new data centre sustainability rating system aimed at enabling comparisons between data centres and promoting new or appropriate efficiency measures in new or existing data centres, which may result not only in a considerable reduction of water and energy consumption, but also in a wider use of renewable energies, increased network efficiency or the re-use of waste heat in surrounding facilities and heating networks. 

Notably, the regulation specifies the information and key performance indicators (KPIs) that data centre operators with an installed IT power demand of at least 500 kW must report to the European database. These metrics are essential for establishing a classification system for data centre sustainability and a standardized EU-wide measurement and calculation methodology.

To date, there are no regulations specifically dedicated to data centres in Italy.

The first legislative proposal on this topic, known as “DDL Pastorella,” dates back to 24 June 2024. It grants the government authority over the organization, enhancement, and technological advancement of data processing centres, aiming to

a) provide for a general regulation of data processing centres, in compliance with constitutional principles, European Union law and international law, defining, in this context, simplified authorisation procedures for the construction of new infrastructures and a related ATECO code; 

b) ensure the strengthening of the national electricity grid to guarantee the concrete implementation of infrastructural development;

c) promote technological development and support the digital economy, by encouraging public and private investments in technological innovation for the data processing centre sector;

d) encourage the recognition and growth of the sector, optimising the use of resources and reducing the environmental impact, in compliance with the principles of bureaucratic simplification and the provisions on IT security and data protection; 

e) define the parameters and levels of security, resilience, recovery and energy efficiency of data processing centres, in compliance with the relevant international standards and provisions;

f) facilitating the digital transformation of public administrations and enterprises and the provision of high-performance services to citizens through the development of design, construction and maintenance skills for high-technology infrastructures;

g) adopting initiatives to ensure Italy's competitiveness in European infrastructural and digital strategies and technological sovereignty for data processing centre infrastructures; 

h) promoting training and the development of specific skills in the data processing centre sector, also by envisaging the establishment of specific educational programmes in cooperation with higher education institutions.

Bill no. 1259 of 2025 (“DDL Basso”) largely incorporates the provisions of DDL Pastorella while introducing additional objectives, specifically

a) to facilitate the reuse and redevelopment of sites with the presence of disused or decommissioned coal-fired power plants for the construction of new data processing centres and supporting energy infrastructures, also through financial incentives;

b) to create an inter-ministerial steering committee composed of the Ministry of Business and Made in Italy and the Ministry of the Environment and Energy Security, to coordinate the development of data processing centre infrastructures;

c) consider the acceleration of applications for new data centre projects involving the use of clean energy solutions, innovative experiments in district heating and cooling, and the reduction of water demands;

d) support environmentally friendly energy storage systems to make data centres more sustainable and efficient. 

Both bills do not indicate what type of incentive mechanism should be adopted, nor the types of authorisation procedures to be implemented in the abstract. Neither do they indicate on the basis of which principle the incentive would be compatible with EU state aid rules.

Existing Incentives and PPAs

Currently, no incentive mechanisms are specifically designed for data centres. However, from a regulatory point of view, data centres constitute “consumption units”. As such, they can constitute a configuration of self-consumption (individual or, if the relevant conditions are met, collective), with direct connection or via the public grid to plants producing electricity from RES.

Self-consumption via the public grid is incentivized by Ministerial Decree No. 414 of 7 December 2023 (“DM CACER”). This decree establishes the framework for granting incentives, promoting the development of renewable energy plants integrated into energy communities, self-consumer groups, and remote self-consumption setups. 

In particular, the CACER Ministerial Decree incentivises the share of energy “self-consumed” by the consumption unit and produced by the production unit. The same energy is also subject to a contribution for the valorisation of self-consumed electricity.

Individual self-consumption with direct connection to the production unit, on the other hand, may alternatively configure, at the choice of the parties and according to the greater convenience

• a Simple System of Production and Consumption pursuant to the Integrated Text of Simple Systems of Production and Consumption, which, in a nutshell, benefits from a discount on system charges;

• a remote self-consumption with a direct line pursuant to the Integrated Text of Diffuse Self-Consumption, which benefits only from the contribution for the valorisation of the self-consumed energy.

Obviously, the two latter configurations allow the end customer, in addition to the above-mentioned advantages, a direct saving in the bill equal to the lesser amount of energy not withdrawn from the grid and self-consumed.

Lastly, major tech companies frequently rely on virtual Power Purchase Agreements (PPAs) to secure fixed energy prices from new renewable energy plants. With the implementation of regulations designating GSE as the guarantor of last resort and the anticipated growth in electricity storage capacity, the role of PPAs could expand and diversify further, shifting from volume-based to profile-based contracts.

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This contribution follows others in which environmental authorisations (https://www.advant-nctm.com/news-e-approfondimenti/energia-tra-innovazione-tecnologica-e-impatto-ambientale) and urban planning aspects in the Lombardy Region (https://www.advant-nctm.com/en/news/guidelines-for-the-implementation-of-data-centers) were analysed.