Europe’s battle for power spurs evolution of a new ecosystem for energy-hungry firms
Electric grid is seen in Krakow Poland as Polish government lifts cup in electricity prices what is expected to rise inflation once more – January 18,2025. Poland has one of the highest inflations in Europe. (Photo by Dominika Zarzycka/NurPhoto via Getty Images)
Nurphoto | Nurphoto | Getty Images
The boom in artificial intelligence, a pressing need for more data centers and the energy transition story — particularly in transportation — are all spurring demand for electricity, and the existing power infrastructure is struggling to keep up.
Businesses are facing five to eight-year wait times to connect to Europe’s ageing and strained electricity grids, experts told CNBC, as the emergence of new areas of demand drives an unprecedented rise in permit requests for power. According to the IEA, at least 1,500 gigawatts of global clean energy projects have been stopped or delayed because of a lack of grid connections and about $700 billion of grid investment is needed for countries to meet their green goals.
Data centers, the large facilities that house servers for computing processes and often require huge amounts of power, are the “primary director” of that growing competition to connect to the grid, said Diego Hernandez Diaz, partner at McKinsey.
He told CNBC that clients have quoted wait times of up to eight years to connect to the grid.
“There are certain transmission system operators in Europe, that are already facing two, three or more folks all attempting to interconnect to the same node at the same time. … There is a literal queue within individual connection points to see who gets to connect first,” he explained.
Hernandez, whose work focuses on electro-intensive industries, said that over the last 18 months, nearly all of his work has focused on data centers, a sector that he expects to grow at an annual compound growth rate of 20% over the next six years. Demand for the facilities required to train large language models (LLMs) is expected to continue its exponential increase as tech giants race to dominate in AI.
Energy management firm Schneider Electric warned in a January report that Europe faces a looming power crunch, with three to five-year waiting lists for grid connections in energy-constrained regions.
We’re going from a situation where you have one application or two applications per year, in some countries to 1,000.
Steven Carlini
Chief advocate of AI and data center
“It’s kind of a race,” Steven Carlini, chief advocate of AI and data centers at Schneider Electric, told CNBC. “You have all these companies that are trying to deploy as much capacity as they can. But it’s constrained by the number of GPUs [graphics processing units] and the available power and the permitting.”
“We’re going from a situation where you have one application or two applications [to connect to the grid] per year, in some countries, to 1,000,” Carlini said.
It’s not just the amount of investment needed — but also the speed with which it can be deployed — which will be key to addressing the issue, McKinsey’s Diaz said. He also pointed to the growing complexity of the work of high-voltage grid operators and the example of Germany, which needs to go from building 400 kilometers of power lines a year to 2,000 kilometers.
Diaz sees the competition to connect to the grid “either maintaining or intensifying” in 2025.
Jerome Fournier, director of innovation at subsea cable manufacturer Nexans, said his firm has a “huge” order backlog in the range of seven-to-10 billion euros ($7.28 billion-$10.40 billion). Nexans’ cables are used to transmit electricity generated by wind and solar farms, and to supply power to homes and businesses.
“Everybody’s considering: do we still have some room in our plans to manufacture other projects?” he said.
Fournier told CNBC that firms like Nexans should also keep slots available for smaller projects such as interconnections for offshore wind turbines. “You’ve got to have the right balance between the load of the plans, the profitability and this type of electrification,” he said.
A new power ecosystem
Power constraints are leading data center operators to evolve their own “ecosystem of power backup,” according to Schneider Electric’s Carlini.
In the future, data centers are expected to be at the center of that grid ecosystem, particularly if they are able to generate their own power with small modular reactors — mini nuclear reactors that produce electricity.
Battery storage and strategic charging are also becoming increasingly important, Carlini said. These systems allow for the temporary storage of energy from the power grid to provide extra backup.
The CEO of power solutions provider AVK, Ben Pritchard, said some European countries are facing large, 100-megawatt grid connection requests of a size that they’ve never seen before.
He advocates for transition-linked energy solutions such as the use of microgrids, which are a separate islanded power system.
In Norway, they’re trialing flexible connection agreements where customers limit their connection to the grid based on certain conditions, Beatrice Petrovich, senior energy and climate analyst at think tank Ember, highlighted. This allows them to adjust their energy usage depending on how the grid is faring at certain times.
Ember also called for the implementation of rules on what it calls “anticipatory” grid investments. These would allow electricity grid operators to plan in a forward-looking way, taking into account the market trends of key technologies, such as growth in renewables and battery storage, Petrovich explained.
Countries that move forward with improving legislation on enabling firms to have a fully decarbonized energy stack will be the “winner of the race,” putting forward a more “friendly ecosystem” around data centers, AVK’s Pritchard said.
Ultimately, a bottleneck in the grid “encourages people to think differently, and when people are encouraged to think differently, they’re more open to different solutions. That, I think, is teeing up for the market to shift quite significantly,” said Pritchard.
Modest EU growth
Despite a growing need for power from some new and developing industries, Europe is still lagging behind the rest of the world when it comes to growth in power demand. High electricity prices and operational costs are hampering overall demand in the region, leading to a more fragmented market.
The International Energy Agency (IEA) this month hailed the rise of a “new Age of electricity,” as it upped its forecasts for global demand, predicting growth of 3.9% for 2025-2027 — the fastest pace of growth in recent years.
The forecasts for Europe are more modest, however. Following two years of sharp declines in power demand, the region saw an increase of just 1% in 2024, according to a January report from energy think tank Ember.
“2024 marks a turning point for electricity demand,” said Ember’s Petrovich, one of the authors of their report. “What we saw is the first rebound — even if it was a small rebound after many years of decline — it was widespread across the block.”
McKinsey’s Diaz explained that since the energy crisis sparked by Russia’s invasion of Ukraine and the subsequent sanctions, electricity prices have settled around 60 to 80 euros per megawatt hour. This is still 50-100% more expensive than prices seen in the previous two decades, however.
As a result, costs for consumers have soared, leading to signs of a deceleration in demand for heat pumps and electric vehicles, he said.
Diaz added that for manufacturers in Europe, the energy requirements “tower above those of any other geography in the world, it’s not only potentially more expensive, but even potentially more challenging,” Hernandez said.
The “unprecedented” growth in data centers is “helping the overall curve ever so slightly, but everything else is fighting against it,” Hernandez said.
Tesla gets more than 20% of its parts from Mexico, as well as some from Canada on top of it. So, yes, Tesla will be negatively affected by the tariffs.
However, there’s another one-month delay.
I didn’t think I would have to write this article, but I have seen plenty of “Tesla influencers” claim that Tesla would not be affected by President Trump’s current trade war:
This is false. Tesla gets a significant percentage of its car parts from Mexico and Canada.
NHTSA releases data about the sourcing of parts for all vehicles in the US. Unfortunately, it doesn’t account for the US and Canada together, but it also lists the country of origin for the next largest source of parts.
For Tesla, that’s Mexico for all car models:
| Models | US/Canada | Mexico |
| Model 3 LR AWD/RWD | 75% | 20% |
| Model 3 Performance | 70% | 20% |
| Model Y LR AWD/RWD | 70% | 25% |
| Model Y Performance | 70% | 20% |
| Cybertruck | 65% | 25% |
| Model S | 65% | 20% |
| Model X | 60% | 25% |
This means that Tesla gets more than 20% of its parts from Mexico in addition to what it gets from Canada.
It’s also noteworthy that Tesla’s most popular car, Model Y, gets 25% of its parts from Mexico.
Despite free trade agreements with Canada and Mexico, Trump has implemented 25% blanket tariffs on the countries.
The tariffs were delayed last month, but they went into effect on Tuesday.
However, today, the White House confirmed that they were delayed again just for the automotive industry. Trump reportedly had a call with the big three this morning, Ford, GM, and Chrysler, and he agreed to another one-month delay.
If you needed more proof that Tesla is going to be affected by the tariffs, ever they go into effect, Tesla’s stock was up 2% on the news that Trump agreed to delay the tariffs.
Electrek’s Take
Tesla fans are delusional. They think that because Elon is involved with Trump and he is not fighting the tariffs, it means that it wouldn’t negatively affect Tesla.
That’s a false assumption. Elon is not fighting because he is either completely delusional about Tesla himself or just doesn’t care.
If the tariffs are ever implemented, they will negatively affect Tesla. They will increase the cost of all Tesla vehicles. Some automakers will be more affected, but Tesla will be hurt, too.
The tariffs are a complete mess. They are on one day and delayed the next. I doubt they will ever be in place for any significant length of time.
Their only real impact is making Canadian and Mexican buyers and businesses think twice about doing business with the US. This impact will likely last longer than the tariffs and Trump’s administration.
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The Silverado EV just got the ZR2 treatment. With its first off-road electric truck arriving this summer, the Silverado EV Trail Boss, Chevy is hyping up the more capable variant with the 1,100 horsepower Silverado ZR2 race truck concept.
Chevy unveils Silverado EV ZR2 and Trail Boss models
Chevy unveiled the Silverado EV ZR2 off-road truck concept at The Mint 400 on Wednesday, dubbed America’s oldest and most prestigious off-road race.
Like the Colorado and Silverado ZR2 models, the electric truck features a lifted suspension fine-tuned for off-road performance, Multimatic damper technology, locking differentials, and underbody skid protection. Chevy said Multimatic Adaptive Spool Valve is the “cornerstone” of its off-road performance.
After only five months of development, Chevy launched the Silverado EV ZR2 concept, which features around 98% GM production parts.
Powered by three electric motors, the race truck delivers a whopping 1,100 horsepower and 11,500 lb-ft of torque, earning it the ZR2 badge. The off-road EV truck comes after Chevy unveiled the 1,300 horsepower Blazer EV.R last month, also with a tri-motor powertrain.
Chevy revealed the ZR2 concept ahead of the highly anticipated Silverado EV Trail Boss edition. The first off-road Silverado EV variant will arrive this summer with factory-installed 18-inch wheels, 35-inch all-terrain tires, red tow hooks, and more. It will also feature a new “Terrain Mode,” enabling it to maneuver in tight spots.
The Silverado EV ZR2 will hit the track to compete in the Open Production EV class on Saturday, March 8th, driven by Chad Hall.
Chevy will reveal more details on the Trail Boss model, including pricing and full specs, closer to launch. Currently, there are two Silverado EV trims (not including the Work Truck) to choose from: LT or RST. The LT starts at $73,100 and has an EPA-estimated range of 408 miles.
| 2025 Chevrolet Silverado EV Trim | Battery Pack | Range | Starting MSRP (Including $2,095 DFC) |
| LT | Extended Range | 408 miles (EPA-estimated) | $75,195 |
| Extended Range with LT Premium Package | 390 miles (EPA-estimated) | $81,995 | |
| RST | Extended Range | 390 miles (EPA-estimated) | $89,395 |
| Max Range | 460 miles (GM-estimated) | $97,895 |
Starting at just under $90,000, the RST gains a Multi-Flex Midgate, a panoramic sunroof, 24″ wheels, GM’s Super Cruise driver assistance, and more. The range-topping Extended Range RST model delivers up to 460 miles range, but it will run you around $98,000.
Ready to test drive Chevy’s electric truck to try it out for yourself? You can use our link to find Chevy Silverado EV models near you today.
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Polestar’s March incentives have an interesting twist – the 2025 Polestar 3 has the same lease price as the Polestar 2, even though there’s an $8,600 gap in their sticker prices.
The Polestar 3 starts at $74,800, while the Polestar 2 comes in at $66,200. But when it comes to leasing, as CarsDirect flagged, both EVs are being offered at $599 per month for 27 months, with $5,599 due at signing and a 10,000-mile annual limit, until March 31.
The 2025 Polestar 3 lease deal applies to the LR Single Motor Plus trim, while the 2025 Polestar 2 offer is for the LR Dual Motor Performance. That helps explain why both EVs are available with the same lease terms, despite their price difference.
The LR Single Motor trim is the most budget-friendly version of the Polestar 3, packing 299 horsepower and 361 lb-ft of torque. It can hit 60 mph in 7.5 seconds and offers up to 350 miles of range. Meanwhile, the Polestar 2 only comes in the LR Dual Motor Performance trim, which cranks out 476 hp and 546 lb-ft of torque. It’s much quicker off the line, reaching 60 mph in just 4 seconds, but it tops out at 254 miles of range.
The main reason the Polestar 2 and Polestar 3 share the same lease deal comes down to incentives. The Polestar 3 qualifies for a $15,000 Clean Vehicle Incentive – only available for leases – which is double the $7,500 incentive that applies to the Polestar 2. And if you drive a leased or owned Tesla, Polestar is also offering an additional $5,000 Conquest Bonus for your car on Polestar 3 leases until March 31. But if you’re looking to buy the Polestar 2 or 3, there’s no standard rebate on the table.
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Read more: Polestar 3 first drive: This all-electric SUV is masterfully tuned and sneaky fast
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