Can Germany Deliver AI Leadership Without Breaking the Grid?

Germany is placing a big bet on the future of AI and cloud infrastructure in the country, hoping to establish ‘digital sovereignty’. Schwarz Group, the retail giant behind Lidl and Kaufland, is building an  €11 billion (£9.6 billion) data centre campus that is said to be a foundational part of Europe’s effort to compete with US and Chinese tech superpowers.

At the groundbreaking ceremony, German Digitalisation Minister Karsten Wildberger declared the Lubbenau site “the backbone of Germany’s digital sovereignty.” 

Rolf Schumann, co-director of Schwarz Digits, the IT arm of Schwarz Group, said that the facility will offer a “secure and independent infrastructure” so that both businesses and citizens “can shape their digital future autonomously.”

The new campus will host up to 100,000 GPUs, making it a potential AI gigafactory, a concept also supported by broader EU ambitions. For example, the European Commission is backing an €20 billion fund to establish similar AI gigafactories across the continent. (source)

What About Sustainability?

On paper, the project carries a sustainability narrative – the site for Lubbenau was previously a coal power plant, and the developers plan to recycle concrete and steel from the legacy infrastructure. But the intent to practice sustainability may fall short in the face of a more complex energy reality.

German data centre operators are increasingly frustrated by the sluggish pace of grid connections. According to a recent report, Cologne-based energy supplier Rheinenergie cites a connection timeline of up to 10 years, while the International Energy Agency estimates seven years.

Thomas Frank, Head of Quality at Siemens Energy, said of the global infrastructure situation, “We are seeing more and more data centres building their own power plants in the immediate vicinity of the facility,” referring to German operators he knows that are planning to build their own gas power plants.

Germany’s Energy Efficiency Act requires data centre operators to source at least 50% of their electricity from non-subsidised renewables, with that number rising to 100% by January 2027. 

The same act sets the PUE target of 1.2 for data centres that begin operations after July 1, 2026. Many projects currently in development may need to revise their designs to comply with the Energy Efficiency Act.

German sustainability regulations for data centres are backed by public sentiment. A recent survey found that two-thirds of Germans (66%) say that data centres should only be built if the additional energy demand they create is met by renewables.

The strategic element of infrastructure investment is clear: Germany would like to reduce its dependence on US-based cloud providers, reclaim control over data flows, and secure a European foothold in the AI race.