In the movie Matrix, Neo decided to take the red pill and woke up from what was a false reality to realize that everything he knew, including his own existence, was stored data. If Lana Wachowski already predicted something at the end of the 90s, it was that data and its accumulation would become a business in the future. And even if it’s not the same way Wachowski drew it in the film, we are already in this future in which Spain plays an important role in data storage.
Although there are no official figures, some estimates suggest that by 2024 the amount of data could reach 124 zettabytes. Even if we imagine that this data is floating in the cloud, in an indeterminate location that might resemble space, the truth is that this amount of information must be stored in a physical location: called data centers. The energy consumption of these data centers represents approximately 2% of global electricity consumption. Given this huge consumption, data centers are opening up as a new business sector for energy companies that can be very profitable.
“Data center expansion can help increase the asset base of utilities accentuating the need to invest more in the European network, which we plan to almost double until 2030″, they explain in this sense since Bloomberg Intelligence.
In Spain, several electricity companies are already joining this activity and devoting part of their investments to its development and growth. Iberdrola believes it can be one of the main players in data centers in Spain and has a potential operating portfolio of 5 gigawatts (GW), of which It already has 615 MW secured. The Spanish company also announced global investments in data centers worth 10 billion euros. This means that 24% of the investments planned in the Strategic Plan (41 billion until 2026) will go to these installations.
In addition, the company is immersed in a process of searching for partners to create a joint venturein which the electricity company would hold a 20% stake. “Iberdrola will exclude any potential customer (e.g. Amazon) as a partner of the joint venture to avoid conflicts of interest. The partner must have proven experience in building data centers. They aim to announce it at the end of 2024/beginning of 2025 and to obtain a TRI low two digits in the joint venture And greater than the IRR obtained in the development of independent renewable projects”, underlines Barclays. After learning this news, the investment bank increased the target price of Iberdrola by 7%, due to the potential of these data centers.
Solaria is another of utilities The Spanish companies that are betting the most on this new business opportunity. In its latest quarterly results, it announced its intention to generate up to 1 billion euros in liquidity through the development of its activities, among others, in data centers. Thanks to this type of buildings alone, the company hopes to reach 670 million euros, i.e. 67% of cash generation will come from this emerging business. And analysts see these data centers as a catalyst for the renewable business.
From Barclays they point out that just the matter of data centers can offer the company a potential of 35%: “Assuming that the cash flow/ebitda of 50 million euros is recurring and sustainable per year (compared to the 134 million euros/year presented in the plan), using a reasonable multiple of 10 times Ev/ebitda, this implies an upside potential of 500 million euros. This suggests a significant upside potential of 35% on the current market capitalization of 1.4 billion euros, assuming limited net debt. be added.
For its part, Renta 4 already anticipates that in the fourth quarter of the current year the impact of these installations will begin to be felt and hopes that generate a cash inflow of 60 million euros over the quarter. “The first stage includes 40 MW PPA [contratos de compra venta de energía] initial plus construction services plus connection points, which could imply a cash inflow of 60 million euros from the fourth quarter of 2024″, they argue from the investment bank.
Endesa has also committed 3 GW in data centerswhich will bring an annual consumption of 15 terawatts/hour (TWh) and expect an additional 15 TWh by 2030. These figures alone represent 6% of the electricity consumption of all of Spain in 2023 (244.66 TWh) and , compared to the objectives for 2030 (to increase consumption to 358 TWh), Only data centers that plan to connect to the Endesa network will represent 13% of the total planned consumption.
With the exception of Solaria, which fell more than 48% on the stock market, Iberdrola and Endesa accumulated revaluations during the year of around 12% and 5% respectively. For now, these three companies are the subject of a recommendation to retain their sharesalthough if analysts have to go for one, they will for Iberdrola. The one who is the utilities The largest in the Spanish market has reached historic highs on the stock market this year and its potential for the coming months is still 7%. Endesa’s trajectory is still 14% and that of Solaria rises to 46%, which allows it to return almost to the highest levels observed at the start of the year.
