AI is hungry for energy: TotalEnergies signs a major data center deal in Spain, but will it be enough for everyone?
TotalEnergies announced a 10-year power purchase agreement with Data4 on Tuesday to supply renewable electricity to the data center developer's sites in Spain, as the French multinational seeks to boost its integrated energy business, a key driver of global electricity demand.
The power purchase agreement (PPA) will begin in January 2026 and will have a term of 10 years and will represent a total volume of 610 gigawatt-hours (GWh).
TotalEnergies will supply Data4 facilities with renewable electricity generated by Spanish wind and solar farms with a capacity equivalent to 30 MW, which are about to enter production.
“Our Clean Firm Power solutions are specifically designed to meet our customers’ needs in terms of cost, consumption profile and environmental commitment,” said Sophie Chevalier, Senior Vice President Flexible Power & Integration at TotalEnergies.
“These solutions build on our integrated energy portfolio, which combines renewable and flexible resources, and contribute to achieving our 12% profitability target in the energy sector.”
TotalEnergies has entered into power purchase agreements with large industrial companies and hyperscalers such as STMicroelectronics, Saint-Gobain, Air Liquide, Amazon, LyondellBasell, Merck, Microsoft, Orange and Sasol.
Unlike other major European companies such as BP and Shell, which have significantlyreduced spending on renewable energy, TotalEnergies has a strategy to achieve a 12% profitability target for its Integrated Power business.
In its 2025 Strategy and Outlook , TotalEnergies has committed to sustaining profitable growth in its Integrated Power division, capturing value from growing global demand driven by the rise of artificial intelligence, air conditioning, and electrification. The supermajor will pursue development in selected markets and aim to exceed 150 TWh by 2035, leveraging renewable energy and gas-to-power solutions.
According to a new report released last week by Rystad Energy, global electricity demand is expected to increase by 30% over the next decade, as data centers, electric vehicles, and the demand for heating and cooling drive increased consumption. Obviously, if this electricity supply isn't available, data centers will compete with citizens for a scarce resource: energy.
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Questions and Answers
- What happens if energy production doesn't keep pace with demand? The risk, highlighted by the Rystad Energy report, is that supply cannot meet demand. In this scenario, large industrial consumers, such as the data centers needed for AI, would find themselves competing directly with household consumers (citizens) for a scarce resource. This would inevitably lead to higher energy prices for everyone, creating a distributional conflict between the needs of digital and everyday life, with a significant inflationary impact.
- Why is TotalEnergies investing in this sector while BP and Shell are holding back? TotalEnergies is adopting a different strategy. It sees its Integrated Power division as a key growth driver, targeting explicit profitability of 12%. It identifies growing electricity demand (driven by AI, electric vehicles, and air conditioning) as a stable, long-term business opportunity. Instead of retreating, it is doubling down, entering into long-term PPAs (power purchase agreements) with hyperscalers and data center operators, securing energy-hungry customers and steady cash flow.
- What exactly is a PPA (Power Purchase Agreement)? A PPA is a long-term contract between an energy producer (in this case, TotalEnergies through its renewable energy plants) and a buyer (Data4). The buyer commits to purchase energy at a predetermined price for a defined number of years (here, 10 years). This model offers price stability to the buyer, protecting it from market volatility, and guarantees a secure revenue stream for the producer, facilitating the financing and construction of new renewable energy plants.
The article "AI is hungry for energy: TotalEnergies signs a major data center deal in Spain, but will it be enough for everyone?" comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/lia-ha-fame-di-energia-totalenergies-firma-un-maxi-accordo-con-i-data-center-in-spagna-ma-bastera-per-tutti/ on Tue, 04 Nov 2025 19:46:31 +0000.