Is Belgium facing explosive growth in data centers?

Rapidly growing data volumes, the rise of cloud computing and the Internet of Things are giving the data center market wings. Not coincidentally, this growth is also noticeable in Belgium, backed by the AI revolution.

The expansion of the Belgian data center market has not come out of the blue. Our country has long had the ambition to emerge as one of the most innovative hubs in Europe. AI, data centers and state-of-the-art connectivity are the drivers of this, but at least as important is the role that Belgium can play compared to other European markets. On that front, the future looks pretty bright, we were told at DigitalX, an event of the Belgian Digital Infrastructure Association (BDIA), aimed at companies active in our country around digital infrastructure.

‘Data center capacity is more than ever a precious commodity,’ said Kevin Restivo, director of Data Center Research at CBRE, active in commercial real estate. ‘Never before have so many providers been active, but there remains an imbalance between rapidly growing demand and supply, resulting in sharp price increases.’ The sharp rise on the demand side also translates into the increasing size of data centers. ‘Added to that, there are more and more user requirements, for example in the field of AI.’

Driven by price growth, providers are exploring the horizon beyond the traditional primary locations of Frankfurt, London, Amsterdam, Paris and Dublin – the so-called FLAPD region. That market accounts for 61 percent of total supply. By 2024, each of those locations, with the exception of Amsterdam, will have the additional energy capacity needed to power and cool data centers. But projections also show that available space will be scarcer, resulting in higher prices. That evolution is making players look to secondary markets.

Chasing group

With a power capacity of 1,000 megawatts (MW) or more – energy available specifically for data centers – London and Frankfurt are a category unto themselves. Paris and Amsterdam situate themselves around 500 MW, and Dublin hovers around 350 MW. In the coming year, five sites would cross the 100 MW power threshold that separates primary from secondary data center sites. Milan draws the lead in this, but along with Warsaw, Madrid and Oslo, Brussels is also in the chasing group. ‘Over the last year and a half, the power supply for the Belgian data center market grew in a short period of time to 65 MW and by the end of next year it will reach the 100 MW limit,’ Restivo said.

More and more providers are coming to our regions, including Google, which in April this year started building a second data center in our country, in Farciennes, in the province of Hainaut. ‘The data center market in Belgium represents only a fraction of the European market, but the growth rate is eye-catching and higher than a number of competitors within the secondary category.’ Restivo refers to the available space in and outside Brussels, but also to the favorable regulatory framework in our country.

Due to its central location, Belgium is not only a logical, but also an interesting fallback option for data centers

The Belgian data center market is mainly located in Brussels, but there is a growing need for expansion in other regions. There’s something in between the distributed nature of our country’s energy supply, with potential for data centers in West Flanders, near offshore wind farms, and riverine areas in Wallonia. So Google’s choice of Hainaut is no coincidence. An additional aspect is the hybrid cloud strategy of the Belgian B2B market, whereby critical business applications are hosted on-premise or in local data centers and less sensitive applications come under the wings of hyperscalers. Companies’ desire to keep their data closer to their customers for faster transactions and better service is increasing demand for smaller, local data centers.

Increasing pressure

Despite the more favorable conditions, even data centers on Belgian soil are not escaping the growing demands of the market. ‘The average size of data center facilities is increasing, toward 30 to 35 MW,’ says Restivo. ‘For hyperscalers like AWS, Google and Microsoft, finding space and energy supplies is becoming increasingly difficult.’ AI companies are also adding to the pressure. ‘They are overwhelmed with venture capital and urgently need to find capacity. Driven by AI, data centers will have to be bigger, higher and more compact.’

Growing demand brings us to the main challenge: finding available space and sufficient power. Traditionally, data centers followed the fiber network for their deployment, but the growing demand for renewable energy has shifted the focus to power availability. This follow-the-power approach is forcing data centers to strategically choose locations with stable and renewable power supplies that offer enough security.

A panel discussion at DigitalX also discussed the impact of the AI revolution, specifically the challenge of reconciling exploding capacity demand with sustainable energy consumption. ‘The focus is shifting to high-density servers in racks, with more cooling, including liquid cooling.’ That requires significant data center design changes and greater investment in both environmental and financial sustainability. ‘The choice of high density solutions will increasingly become central to strategy, including hyperscalers.’

More than a fallback option

That presents opportunities for growth markets like Belgium, which are less subject to the limiting effect of past choices. ‘Strategic planning is crucial to prevent secondary markets from making the same mistakes as Amsterdam and Frankfurt, where the energy infrastructure is bumping up against its limits today.’ That is why there is a lot of enthusiasm about our country’s strategic potential. ‘Belgium is at the heart of the FLAPD region and is not only a logical, but also an interesting fallback option. The south of the country offers interesting locations, especially in terms of network connectivity and energy infrastructure. Add to that the attractiveness of Brussels as the headquarters of the EU and NATO, and you arrive at a favorable growth environment.’

“AI requires bigger, taller and more compact data centers.”
Kevin Restivo, director of Data Center Research at CBRE

Regardless, the future of data centers is closely tied to power grid availability and network congestion challenges. With grid scaling and increasing energy efficiency, data centers are increasingly focusing on higher density and improved cooling, and power usage effectiveness (PUE) is systematically declining. The decentralization of the energy landscape away from large power plants to a mix of energy sources dictates that data centers will be part of smart grids and microgrids.

Double-edged sword

The whole story plays out against the backdrop of the explosive growth of cloud computing and AI, leading to an ever-increasing demand for data center capacity. Experts agree that due to the saturation of primary markets, Belgium can expect spillover effects from this evolution. In the United States, the first data centers are now running up against their capacity limits and can barely meet the massive investments in GPUs. This is why more and more people are looking toward modular data centers. These offer customers the option to quickly scale up their capacity without lengthy waiting times. This lowers the threshold for companies to launch their own AI models.

Specifically for Belgium, we see a trend toward small, strategically placed data centers. Concerns about data location and latency, especially for AI applications, underlie this. To respond to these needs, hyperscalers are adapting their strategy by developing both high-density racks and dedicated AI data centers. And that’s necessary: every hundred days, the volume of AI workloads doubles. So building data centers with the right specifications for AI, such as high-density server racks and advanced cooling systems, is crucial.

During the many panel discussions at DigitalX, experts also exposed the paradox that AI brings: there is no doubt that AI can contribute to sustainability, but at the same time the technology is emerging as one of the biggest energy consumers. The efficiency of data centers must therefore be raised to a higher level. This is where AI can play a role, by responding intelligently to demand and contributing to smarter designs.

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