The world’s two biggest data centre operators have announced €22.3bn worth of investment into the Spanish region of Aragon since May, causing analysts to back government claims it will become a leading European data centre hub. 

On July 3, Aragon’s president Jorge Azcón stated that Microsoft was investing €6.6bn in its data centre campus under development just outside the region’s capital, Zaragoza. It came six weeks after AWS announced plans to invest €15.7bn over a decade to expand its Spanish cloud region, which is operated from Aragon. 

Aragon can become the ‘Virginia of Europe’, Mr Azcón has stated on social media and in local press, referring to the southeastern US state that harbours the country’s biggest data centre market. 

Jose Guilleuma, data centre director at Colliers, agrees the Virginia comparison is accurate. “Aragon is going to become one of the most relevant markets in Europe,” he says, adding: “I confirm there is more [investment] to come”. 

“New projects are possibly going to be announced in the coming months, and every single operator betting on Aragon is going for large-scale campuses,” he says.

AWS’s investment will expand the three data centre campuses surrounding Zaragoza it has operated since 2022 and account for the state’s current installed capacity of 108 megawatt (MW) IT load, according to Colliers. Microsoft’s future 874,000 square metre campus will be its first data centre operations in the north-eastern state of Aragon. 

Neither AWS nor Microsoft have announced the size of their latest projects, but Colliers forecasts that by 2030 Aragon’s installed capacity will hit 1608 MW IT. Within Europe, it is beaten only by London (1900 MW IT) and Frankfurt (1620 MW IT). 

AI-powered migration

Microsoft and AWS’s megaproject announcements follow Savills’s forecasts that Europe’s data centre market is on the cusp of its biggest growth phase on record. 

Aragon has much of what’s needed to accommodate this build out. This includes large plots of available land, testament to its low-population density and its strong digital connectivity, thanks to its positioning between Bilbao and Barcelona’s subsea cable connections, and the hyper-connected Madrid to its southwest. 

Access to large volumes of cost-competitive renewable power is another drawcard. Three-quarters of the electricity generated in Aragon comes from renewable sources. This promises to grow with BP’s expansion of its solar projects throughout the region, announced in 2023, and Baywa breaking ground in March on its 188MW Rueda Sur wind and solar energy cluster outside of Zaragoza. 

One potential drawback is Spain’s water shortage, which is traditionally needed for data centres’ cooling systems. However, waterless cooling systems are being rolled out, and Mr Guilleuma notes that water management is “in Spain’s DNA”. 

Aragon’s newfound popularity with hyperscalers underscores how a shortage of space and electricity constraints in Europe’s FLAP-D hubs — Frankfurt, London, Amsterdam, Paris and Dublin — are pushing data centre and cloud infrastructure into Tier 2 and 3 markets.  

More on European data centres:

• European data centres on track for "biggest growth yet"
• Is Europe’s data centre boom coming to tier-2 markets?
• UK’s Virtus invests €3bn in AI data campus in Germany

All the work, half the benefit?

Aragon’s government is treating data centres as a strategic industry, easing permitting and administrative hurdles, and describing Microsoft’s campus as a catalyst for innovation, economic growth and job creation.  

AWS expects its Spanish plans to support 17,500 jobs nationally, of which 6800 are in Aragon. Research firm IDC expects Microsoft’s investment to add 2100 tech jobs in Aragon and as many as 69,000 indirect jobs in the technology sector across Spain. 

Mr Guilleuma notes that post-construction, data centres do not create as many long-term, direct jobs as many expect. But he stresses these are highly skilled jobs, and AWS and Microsoft’s presence will spur investment in its surrounding tech ecosystem.

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