Explore how Portugal’s innovation, renewable energy, and connectivity create a compelling environment for data centres and AI development.
In the ever-evolving landscape of technology, Portugal emerges as a beacon of opportunity, particularly in the realms of data centres and artificial intelligence (AI). The country’s unique confluence of innovation, renewable energy, and robust connectivity positions it as an attractive destination for data infrastructure. As generative AI and the digital economy burgeon, the demand for new data centre locations in Portugal has surged, reflecting a global trend towards increased data processing and storage capabilities.
Currently, Portugal boasts approximately 30 data centre infrastructures, with notable mention of Altice’s facility in Covilhã. Spanning an impressive 75,500 square meters, this centre accommodates 50,000 servers and has earned a Tier 3 classification from the Uptime Institute, a testament to its reliability and operational excellence. The expansion of AI technologies has catalyzed an intensive demand for large-scale projects, necessitating power capacities ranging from 300 MW to 500 MW.
While Lisbon and Porto collectively house two-thirds of the nation’s data centres, Portugal’s favorable conditions extend beyond these urban centers. The country is a leader in renewable energy production, with two-thirds of its electricity generated from hydro, wind, and solar sources. Furthermore, ongoing research into alternative energy sources, such as tidal power, ensures competitive pricing in the energy market. Complementing this is Portugal’s extensive fibre optic network, which facilitates connectivity through critical submarine cables that traverse the Atlantic, notably in Carcavelos and Sesimbra, both located in Greater Lisbon.
The burgeoning demand for data centres is intrinsically linked to the foundational requirements of AI, which relies heavily on the collection and storage of vast amounts of data. This, in turn, necessitates enhanced processing and storage capacities, coupled with energy efficiency and advanced cooling systems. According to data from JLL, the dominant players in Portugal’s data centre market include Altice and Claranet, each commanding a 15% market share, while NOS and REN Telecom hold 12% each. Other operators, such as AR TELECOM, PTISP, FCT-FCCN, Equinix, and ONI Telecom, contribute smaller shares to this dynamic market.
Among the noteworthy projects currently under construction is the Start Campus data centre in Sines, which will boast a staggering 495 MW capacity, powered entirely by renewable energy. This facility is poised to become the largest hyperscale data centre in Portugal. Additionally, Atlas Edge is developing a data centre in Carnaxide, Lisbon, with an initial capacity of 20 MW, exclusively utilizing renewable energy and implementing water conservation measures. Merlin Properties has also secured a license for a 24 MW infrastructure in Vila Franca de Xira, with potential expansion up to 100 MW.
Portugal’s strategic positioning as an emerging market in the international data centre landscape is underscored by JLL’s assessment, which anticipates the country transitioning to a secondary market status as it garners increased attention from investors and developers. The potential for hyper-scale projects, ranging from 100 MW to 600 MW, further enhances Portugal’s appeal.
Connectivity remains a critical factor in attracting investment, and Portugal possesses the requisite characteristics to emerge as a preferred market. Submarine cables, which account for approximately 95% of global internet traffic, serve as vital conduits for digital information. Portugal is strategically located along important intercontinental submarine cables, with the recent launch of the “2Africa” cable from Carcavelos, extending 45,000 km and linking Europe to 33 countries across Africa and Asia. Additionally, the “EllaLink” cable, connecting Portugal and Brazil, further solidifies the nation’s role in global connectivity.
The classification of data centres into tiered levels, as established by the Uptime Institute, reflects their reliability, redundancy, and uninterrupted availability. With classifications ranging from Tier 1 to Tier 4, the evaluation process begins with network availability and escalates to encompass sophisticated power solutions and optimal cooling systems.
Portugal’s renewable energy generation capabilities are noteworthy, with 61% of electricity consumption in 2023 derived from sustainable sources. Wind energy leads the charge, contributing 25% of the energy mix, followed by hydroelectric power at 23%, photovoltaic sources at 7%, and biomass at 6%. Since 2016, Portugal has maintained its status as an energy exporter, enhancing its attractiveness for sustainable energy solutions, particularly for data centres.
As the European Commission projects a 60% increase in energy needs by 2030, Portugal’s strengths in establishing large data centres are evident. The nation serves as a gateway between Europe, Africa, and the Americas, with a strong IT sector and engineering expertise. Existing facilities are designed to withstand flooding and earthquakes, while the coastal climate provides natural cooling advantages. Furthermore, the widespread availability of optical fibre connectivity and 5G coverage in densely populated areas facilitates rapid data transmission.
Portugal’s robust capacity for renewable energy production, coupled with its strategic geographical positioning and favorable regulatory environment, positions it as a burgeoning hub for data centres and AI. However, challenges such as regulatory complexities and tax requirements must be navigated to fully realize this potential. As the global demand for data infrastructure continues to escalate, Portugal stands poised to play a pivotal role in the digital economy of the future.
