Portugal drafts rules requiring renewable power for data centers

Portugal is finalizing legislation that would require every data center in the country to run on renewable power and adopt waterless cooling, Environment Minister Maria da Graca Carvalho told a parliamentary hearing.

The minister said the draft rules impose "stringent requirements on water use" and a "very rigorous" environmental review on new projects.

"We'll require projects to either have a cooling technology that does not require fresh water, because that is already possible, or a water solution that does not conflict with water supplies for the general population and other socio-economic activities," Carvalho said.

The renewable mandate rests on Portugal's existing generation base. Carvalho cited the country's solar, wind and hydropower resources. European Commission data shows more than 80 percent of Portugal's power came from renewable sources in 2025.

How large is Portugal's data center build-out?

The rules land on a market expanding at speed. More than 2.6GW of capacity is currently under development, a sharp increase on installed levels.

• 36 data centers are operational today.
• 10 more are under construction or in planning.
• Lisbon leads with 25MW of operational capacity and almost 1.4GW planned.

That pipeline has drawn pushback from local communities. In 2023, a corruption scandal tied to the Start data center campus brought down the government and forced the resignation of then-Prime Minister António Costa. The Start project, slated for 1.2GW of capacity, is still expected to proceed.

In short: Portugal is attaching conditions to growth that is already politically contentious.

What does the regional context look like?

Portugal follows neighboring Spain in drafting renewable mandates for data centers. In August, the Spanish government proposed that data centers source at least 80 percent of their electricity consumption from new renewable generation, matched on an hourly basis.

In October, Spain revised the rules. It raised the size threshold of facilities covered from 1MW to 10MW, exempting smaller operators.

The two Iberian governments are moving in the same direction: tying approval of energy-intensive computing infrastructure to verified renewable supply and water protection.

Portugal's legislation, once finalized, would apply to a sector whose capacity could multiply severalfold within the decade.