Echelon in joint venture deal with Spain's Iberdrola
Iberdrola sees booming demand for data centres as one of the main drivers of future growth both for its grids and renewable energy businesses.
With developments like artificial intelligence and cloud computing expected to increase demand for data centre capacity, companies like Iberdrola can benefit both from selling them energy and connecting them to the grid.
Echelon will hold an 80% stake in the joint venture, handling permitting, design, marketing and day-to-day management of data centres.
The Spanish firm will have the remaining 20% stake, providing energy and land connected to the grid.
The joint venture already has a project in the pipeline - Madrid South - a 160,000 square meters complex with a data processing capacity of 144 megawatts. It has already secured a 230 MW electricity connection.
Expected to be operational by 2030, its 1 terawatt hour demand will be covered by a planned solar plant and additional green energy supplied by Iberdrola.
Iberdrola already supplies 11 TWh of energy to data centres in countries such as Spain, Britain, the US and Germany. Last year, it created a data centre unit, CPD4Green, and had been seeking a partner.
"The alliance signed with Echelon will allow us to value our portfolio of sites with access to electricity connection and our ability to offer these infrastructures secure, clean and competitive energy 24 hours a day, 365 days a year," said David Mesonero Molina, corporate development director of Iberdrola.
With the deal, Echelon Data Centres - whose major shareholder is private investment firm Starwood Capital Group - achieves its strategic goal to enter the Spanish market, Chief Investment Officer David Smith said.
"Entering the Spanish data centre market has been a strategic goal for Echelon for several years. Spain has material benefits as a market for our customers; a supportive regulatory and policy environment, high quality talent from both a construction and operational perspective and access to some of Europe's lowest price renewable energy, in scale," he said.
"Our partner, Iberdrola, is a world leader in building and operating generation assets and we are delighted to have this opportunity to partner together to deliver critical infrastructure for our customers," he added.
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