2025
Global Data Center Market Report
Regional Market Overviews
Denmark
Denmark is an emerging data center market in Europe with a total installed capacity of 280.0MW, and an additional 108.0MW under construction as of Q1 2024 (Danish Data Center Industry, 2024). The country is benefiting from power and land constraints as well as escalating costs in the FLAP-D markets (Frankfurt, London, Amsterdam, Paris, and Dublin), which is pushing investors to consider alternative locations offering headroom for growth.
Hyperscale facilities accounted for 78.6% of the total installed capacity, mainly due to the self-built campuses constructed by hyperscalers such as atNorth, Microsoft and Prime Data Centers. Advancements in AI and digital infrastructure have driven demand for high-performance computing, which has, in turn, propelled the development of hyperscale data centers.
Denmark provides an attractive setting for data center development due to its abundant renewable energy resources, strong data protection laws, and commitment to sustainability. Although it faces competition from other Nordic countries, Denmark’s strategic benefits, such as government incentives, supportive regulations, and a favourable climate, make it a promising location for hyperscale operators and colocation providers looking to expand their presence in Europe.
GDP (Current Prices) USD (2023) | 407 Bn |
Projected Average GDP Growth (2024-2028) | 1.6% |
10-year Govt Bond Yield (12-month rolling average) | 2.3% |
Country Credit Rating | AAA |
Renewable Energy Share | 88% |
Data Center Capacity (Q1 2024) | 280 MW |
Note: Renewable Energy Share excludes hydro-power
Market Dynamics and Growth Factors
Denmark’s low population density of 141.0 people per km², ranked 92nd globally in 2024, enables it to provide large-scale, low-risk sites for data centers. Furthermore, the country’s stable climate—politically, economically, and meteorologically—positions it as one of the safest places globally, offering ideal conditions for low-energy cooling (Database Earth, 2024) (Danish Data Center Industry, 2024) (Ministry of Foreign Affairs of Denmark, 2024). The current capacity, while still relatively smaller than other FLAP-D markets—representing just 14.3% of Germany’s total capacity—is expected to increase due to the market’s potential for growth (Danish Data Center Industry, 2024) (German Datacenter Association e.V., 2024).
Hyperscale data centers represent a substantially larger portion of total capacity compared to colocation data centers. While colocation facilities are expanding, the hyperscale sector is viewed as more established and stable, attracting substantial investments and larger projects. As a result, major tech companies like Google, Apple, and Facebook are investing heavily in Denmark to build hyperscale data centers. Additionally, Denmark offers optimal conditions for energy efficiency, with 85% free cooling available year-round, significantly reducing operational costs (Businesswire, 2021). This sustainability focus aligns with hyperscalers’ goals, as they increasingly prioritize green energy solutions and carbon neutrality in their operations.
Due to ongoing land and power availability challenges in the primary FLAP-D markets, companies are exploring other countries, such as Denmark, to expand and diversify their operations cost-effectively. However, hyperscale data center deployment in Denmark differs from the FLAP-D markets, with facilities often located outside the main city of Copenhagen. This approach is driven by the availability of sizeable land parcels and a stable power supply, conditions that are expected to remain favourable. As a result, regions with ample land and reliable power are likely to continue attracting investment and experiencing capacity growth (DC Byte and Datacenter Forum, 2023) (Prime Data Centers, 2024).
Denmark’s appeal as a prime location for data center development is driven by its low-latency networks, a highly reliable power grid, and a strong commitment to clean energy—more than 84% of its electricity generation came from low-carbon sources in 2024 (Low Carbon Power, 2025) (Ministry of Foreign Affairs of Denmark, 2024) (Danish Data Center Industry, 2024). Additionally, Denmark boasts excellent connectivity to key regions, including the USA, the UK, Ireland, and central Europe, through its high-speed, low-latency network. With less than 50% of the country’s total fibre grid capacity currently in use, significant opportunities remain for data center expansion (Danish Data Center Industry, 2024) (Ministry of Foreign Affairs of Denmark, 2024).
Denmark’s rich green energy resources make it an appealing market for data centers and developers with substantial power requirements. In 2024, solar and wind energy contributed 70.0% of the country’s electricity supply(Low Carbon Power, 2025) (Eurostat, 2024). This strong emphasis on renewable energy is particularly attractive to companies committed to sustainability goals (Verne Global, 2024).
Denmark’s cold climate offers natural advantages to data center operators, as it minimises cooling requirements, thereby reducing operating costs. Denmark has been at the forefront of innovation in cooling technologies. Danfoss is collaborating with Hewlett Packard Enterprise to build energy- efficient data centers that leverage the local climate to reduce cooling energy consumption by more than 50.0% (Danfoss, 2019). In 2023, a data center in Denmark became the first in Europe to implement submerged cooling or liquid immersion cooling, significantly reducing power consumption for cooling by up to 90.0%. This method is up to 1,000 times more efficient than traditional air-cooling systems and is considered a leading solution for the future of data center cooling (Araner, 2024).
The country’s stable power grid is another key growth driver for the data center market, ensuring a secure and uninterrupted power supply essential for data center operations. It has one of the most developed grids globally with 99.99% of uptime and 80.0% of power lines being underground. The country can provide low-risk sites with N-1 contingency and 132/150kV power supply which reinforces the stability of the grid for smooth operations of the data centers (Ministry of Foreign Affairs of Denmark, 2024). High-capacity DC interconnections link Denmark with major European countries like the Netherlands, Norway, Sweden, the UK, and Germany, allowing it to import energy from these countries to compensate for any shortfall in its renewable energy production (DC Byte and Datacenter Forum, 2023).
Denmark hosts several major global companies, such as A.P. Møller-Maersk, Danske Bank, Novo Nordisk, Carlsberg Group, and Vestas, along with significant operations from many Fortune 500 companies. This concentration of corporate activity fuels the growth of data centers to accommodate substantial data processing needs. The hyperscale market in Denmark is led by global cloud service providers like Apple, Microsoft, and Google, while the colocation market features investments from international firms like Digital Realty and Prime Data Centers, Nordic companies such as Bulk Data Centers and atNorth, and European providers like Penta Infra, all aiming to meet the data requirements of these large enterprises (DC Byte and Datacenter Forum, 2023) (Prime Data Centers, 2024).
Policy Regulation
Danish data centers are governed by GDPR and the Danish Data Protection Act, requiring companies to safeguard EU residents’ data and keep it within national borders. These regulations drive demand for data localisation, enhancing the appeal of Danish data centers and encouraging investment in advanced security measures like encryption and access controls. The regulatory environment is also boosting the adoption of cloud services, leading to new data center projects and expanded capacity (DLA Piper, 2024).
After the adoption of the EU-wide revised Energy Efficiency Directive (EED), which set a binding target of reducing overall energy consumption within the region and a scheme to rate the data centers based on certain sustainability criteria, it is expected that innovations and investments in green data center technologies are going to see more traction across the region (EUR-Lex, 2023). Data centers with capacities of 1.0MW or more must incorporate plans to connect to district heating systems before initiating any project. These systems, which provide heat to approximately 64.0% of Danish homes, reinforce the focus on sustainability by enabling data centers to contribute to energy-efficient heating solutions, further aligning with environmental regulations. This may pose challenges for smaller wholesale operators in Denmark, while domestic retail operators are mostly unaffected due to their lower power demands (DC Byte and Datacenter Forum, 2023) (Danish Data Center Industry, 2024).
The Danish Data Center Industry (DDI) and other Nordic data center associations have agreed to comply with the EU’s Energy Efficiency Directive (EED) while proposing modifications to the reporting criteria. They believe colocation providers and enterprise operators without access to data traffic information should be exempt from reporting it, as this could lead to suboptimal ratings and undermine the purpose of the rating system (Danish Data Center Industry, 2024).
Furthermore, the association also suggests lowering the eligibility threshold for energy efficiency reporting from 500.0kW to 100.0kW for data centers in Denmark. Lowering this threshold would mean that a greater number of smaller data centers, including colocation facilities and enterprise operators, would be subject to the same reporting requirements, thereby enhancing transparency in energy usage across the sector (Danish Data Center Industry, 2024). This aligns with Denmark’s aim to tighten sustainability regulations to achieve 55.0% renewable energy consumption by 2030 and carbon neutrality by 2050 (IEA, 2023) (Directorate-General for Climate Action, European Commission, 2023).
Outlook
The Danish data center market is on the cusp of a significant transformation, with revenue expected to soar from $2.2 Bn in 2024 to $3.1 Bn by 2029, marking an impressive compound annual growth rate (CAGR) of 6.6%. This growth narrative is primarily fueled by the increasing demand for hyperscale facilities, which have emerged as the market leaders. Denmark’s favourable business climate, reliable power infrastructure, and exceptional connectivity create an ideal backdrop for these expansive data centers to thrive. As highlighted by Arizton Advisory & Intelligence, the country is poised to add approximately 418.0MW of power capacity between 2024 and 2029, a change driven by the rise of the digital economy, escalating cloud service adoption, and advancements in artificial intelligence and machine learning. With extensive land availability and a commitment to green energy, Denmark is set to attract ongoing investments from hyperscale operators, paving the way for a dynamic and sustainable future in the data center landscape (Statista, 2024) (Danish Data Center Industry, 2024) (Danish Data Center Industry, 2024) (Arizton Advisory & intelligence, 2024).
The Danish data center market is likely to witness sustained investments via both the greenfield and the inorganic routes. Nordic colocation provider atNorth, which entered the Danish market in 2023, is investing in two data centers. The first, a 30.0MW facility in Copenhagen, is set to launch in Q2 2025. The second, a 250.0MW data center in Ølgod, is expected to be completed by 2026 (Data Center Dynamics, 2024) (atNorth, 2023). European data center firm Penta Infra has announced its plans to build a 20.0MW data center in Copenhagen, Denmark, its second facility in the country (Data Center Dynamics, 2024). Additionally, US-based hyperscalers are likely to invest in expanding existing campuses in Denmark, as it may be more cost-effective and convenient than building new facilities, although the greenfield option cannot be entirely ruled out (DC Byte and Datacenter Forum, 2023). US firm Prime Data Centers entered the European market in 2023 by announcing plans for a 124.0MW data center campus in Denmark, featuring three hyperscale facilities designed for Fortune 500 companies and international cloud providers (Prime Data Centers, 2023) (Data Center Dynamics, 2023). Prevailing market dynamics might also favour M&A activity in the sector, as evident from CapMan Infra’s acquisition of Fuzion, a Danish colocation company serving SMEs with four data centers (Arizton Advisory & intelligence, 2024) (Data Center Dynamics, 2023) (CapMan Infra, 2023).
Norwegian hydropower is subject to the highest tax levels in the Nordic region, while Denmark has the highest consumption-based taxes. In general, the electricity tax is very high in Denmark, which is part of its broader strategy to promote renewable energy and reduce carbon emissions (Nordic Tax Group, 2023). Meeting the requirements of the EU Energy Efficiency Directive (EED) also compels developers to improve their planning, design, and operational practices. Encouraging the use of district heating systems and fostering partnerships between local authorities and data center operators, such as Microsoft’s initiative to use excess heat from its data center to heat 6,000 homes, could support long-term sustainability goals and create differentiation from the competition (IEA, 2023) (Directorate-General for Climate Action, European Commission, 2023) (Danish Data Center Industry, 2024) (Data Center Dynamics, 2024).
Overall, Denmark has several advantages positioning it as a preferred alternative investment destination to the FLAP-D markets in Europe. However, it will face competition in the short term from neighbouring Nordic markets for similar investments. Nonetheless, favourable market fundamentals coupled with a supportive policy environment will likely sustain continued growth.