On 18 March 2026, the Federal Government adopted the first national Data Centre Strategy. This aims to make Germany one of the leading global hubs for data centres and contains 28 measures across three key areas: energy and sustainability, location and land use, and technology and sovereignty.
Background
The rapid rise in data volumes and increasing use of artificial intelligence (AI) have significantly increased the need for computing capacity. Given fierce international competition, Germany also faces the challenge of remaining an attractive investment destination. With 3 GW of installed IT power and over 2,000 data centres, Germany is still the biggest data centre market in Europe. In global terms, however, the country is in need of major capacity expansion: the US, for example, has around 48 GW of data centre power. At the same time, investment is shifting towards regions with lower energy prices and quicker permit procedures, such as Scandinavia.
This has prompted the Federal Ministry for Digital Transformation and Government Modernisation (Bundesministerium für Digitales und Staatsmodernisierung, “BMDS”) to draw up a national Data Centre Strategy, which the Federal Government has now approved. High-performance computing (HPC) and AI capacity are to be increased by a factor of at least four. The strategy document was released following an online consultation with over 100 responses and an inter-ministerial coordination process. The strategy sets the goal of at least doubling Germany’s data centre capacity by 2030. It has been conceived as a living document, to be updated with new measures annually.
The strategy’s main measures
The Data Centre Strategy covers three key areas with a total of 28 measures.
Energy and sustainability. This key area aims to ensure and accelerate grid connection access, bolster renewable energy deployment and increase the energy efficiency of data centres. At the heart of the measures is a restructuring of award procedures for grid connection capacity on both the transmission and distribution grid levels, aiming to better position data centres when competing with other major consumers. The Federal Government also plans to develop an industry standard for flexible connection agreements (FCAs), which will allow data centres to be connected even if grid capacity has not yet been fully expanded (see also our article from March 2025 on cable pooling: Cable pooling now an option for renewable energy grid connections in Germany | Gleiss Lutz). A dialogue process between data centre operators and the energy sector is also to be set in motion to explore long-term PPA models, ways to link data centres with regional renewable energy sources, and system-friendly self-supply options. To reduce electricity costs, the Federal Government plans to maintain existing subsidies for costs incurred under the Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz) and grid charges and to extend electricity price compensation schemes to data centres. Power usage effectiveness (PUE) targets are to be adapted to better reflect real-world operations, and the rollout of waste heat recovery projects is to be simplified.
Location and land use. The aim for this key area is to identify suitable sites at an early stage and make them attractive for investors and local authorities alike. The Federal Government plans to develop a concept for identifying priority areas for data centres with a strong focus on brownfield sites, i.e. previously used or developed areas like former power stations or industrial facilities. Additionally, a standardised set of criteria is to be developed as a practical guide for local authorities. To boost acceptance at the local authority level, the Federal Government will look into introducing a tailored trade tax allocation method for data centres that would give municipalities hosting these facilities a greater share of the resulting tax revenues. Planning and permit procedures will be reviewed together with operators by way of a “practicality check” to identify ways to speed these up, with best practices being shared between federal and state authorities. Complementary general location measures already adopted – such as the declining-balance depreciation of up to 30% for movable assets and the planned gradual reduction of the corporate tax rate to 10% – also improve the investment environment for data centres.
- Technology and sovereignty. The goal is to expand Europe’s own computing infrastructure and thereby reduce reliance on non-European hyperscalers – global cloud service providers that operate with vast processing and storage capabilities. Germany aims to establish at least one AI gigafactory as part of the European EuroHPC initiative. The Federal Government wants to continue and intensify its participation in pan-European flagship projects such as the IPCEI on cloud, AI and edge technologies. A sovereign cloud platform for AI applications is to be created for public administration. Additionally, a 2026 funding call will support innovative, sustainable data-centre technologies, and research focused on data-centre cybersecurity and resilience will be further scaled up.
Response and outlook
All measures are to be launched and, where feasible, completed within the next twelve months. The BMDS will monitor implementation, with updated plans being released annually. Any measures entailing additional federal budget expenditure remain contingent on available funding.
For data centre operators and investors, the ambitious goals and measures of the Data Centre Strategy send a clear and important political signal: the Federal Government regards data centres as critical infrastructure for the future and is committed to a substantial expansion of capacity. Particularly positive are the announced measures to accelerate grid connection and permit procedures, as well as the proposals aimed at reducing electricity costs. But there is still insufficient coordination with parallel processes currently underway – especially the reform of the grid connection procedure initiated by the transmission system operators (New award procedure for transmission grid connections – “maturity model” to replace first-come, first-served | Gleiss Lutz). It remains to be seen whether and in what timeframe the announced measures will translate into concrete legal changes. As stated in the strategy itself, success will depend on “consistent and sustainable implementation in close cooperation between federal and state authorities, business, academia, and civil society.”
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