Summary

• Portugal is preparing legislation on renewable electricity, water use, and environmental assessments for data centre developments.
• More than 2.6GW of capacity is planned, including the 1.2GW Start Campus project at Sines.
• The new decree has not yet been enacted; its final requirements and application to individual projects remain to be established.

Portugal is preparing new environmental requirements for data centres, with developers expected to demonstrate access to renewable electricity and cooling arrangements that do not place additional pressure on water supplies required by households and other businesses.

Environment and Energy Minister Maria da Graça Carvalho outlined the government’s approach in comments reported domestically on 2 November, ahead of wider international coverage the following day. A decree governing the installation of data centres is being prepared, with requirements expected to cover energy availability, water resources, and environmental approval.

The proposals come as Portugal develops a pipeline of more than 2.6GW of data centre capacity, including the 1.2GW Start Campus project at Sines. Much of that infrastructure remains unbuilt, making the proposed requirements relevant to developers making decisions about site selection, electricity connections, and future investment.

Carvalho said operators would be expected to use renewable electricity but would not necessarily have to generate it themselves. Developers could secure renewable supplies through electricity providers, while arrangements for cooling would need to account for the availability of water and competing local requirements.

Cooling requirements influence development decisions

Data centres generate substantial heat because their computing equipment consumes electricity continuously during operation. That heat must be removed to maintain equipment within its specified operating conditions, requiring cooling systems whose energy and water demands vary according to their design.

Some facilities use air-based cooling arrangements, while others employ liquid cooling and systems that transfer heat through water circuits. Different technologies can reduce particular resource requirements, but their total environmental effects depend on the complete installation and the conditions under which it operates.

The approach described by Portugal’s environment minister would require developers either to use technology that avoids reliance on fresh water or to demonstrate that their water supplies would not compete with the needs of households, businesses, and other activities.

These conditions could alter the economics of proposed facilities. A location with available land and strong international connectivity may still require expensive infrastructure if local water resources are constrained or the selected cooling system cannot operate efficiently under prevailing conditions.

Conversely, projects able to use alternative water sources may face different engineering and environmental questions. The suitability of seawater cooling, for example, depends on location, equipment design, intake and discharge arrangements, and the effects of heat returned to the surrounding environment.

Start Campus has incorporated seawater cooling into its development at Sines, where one of six planned buildings is operating. The project demonstrates one possible approach to reducing demand for fresh water, although its configuration cannot automatically be replicated at every proposed site.

Developers will need to assess both the direct water consumed by their facilities and the operational consequences of their cooling arrangements. Water availability can vary seasonally, while the suitability of different systems may change with temperature, humidity, and equipment density.

Renewable electricity does not remove grid constraints

Portugal has substantial wind, solar, and hydropower resources, contributing to its appeal as a potential location for European computing infrastructure. Access to renewable generation can support long-term electricity purchasing arrangements, but the availability of electricity at a particular data centre site remains a separate technical consideration.

Large facilities require grid connections capable of supplying significant amounts of power. Even where renewable electricity is available within the national system, network capacity may not exist at the location or at the time a developer intends to begin operating.

Transmission infrastructure, connection agreements, and the timing of network upgrades therefore influence project delivery. A developer may need to finance or contribute towards additional electrical infrastructure before its facility can receive the required supply.

The government’s proposed framework is expected to address some of these arrangements, including connection costs and the availability of renewable electricity. The final legislation will determine what evidence developers must provide and how requirements are assessed during the approval process.

Carvalho has also indicated that projects will need a positive environmental impact assessment. That requirement would place environmental review alongside the commercial and technical considerations involved in establishing new computing capacity.

These conditions will be particularly relevant to AI infrastructure, where dense configurations of advanced processors can create substantial electricity and cooling requirements. However, the environmental effect of a development will depend on its actual equipment, utilisation, operating conditions, and supply arrangements rather than its designation as an AI data centre.

A substantial pipeline remains largely unbuilt

The country’s planned capacity exceeds 2.6GW, but that figure describes development projects rather than electricity demand already being imposed on the network. Large facilities are frequently built in phases, with additional capacity commissioned as customer contracts, power arrangements, and financing become available.

Start Campus illustrates that distinction. The project at Sines is designed to reach 1.2GW across several buildings, while only an initial part of the proposed development has entered operation.

Evaluating the complete pipeline as though every project were already consuming its maximum planned power would overstate current demand. Equally, the proposed scale creates substantial questions about how much infrastructure will be required if developments progress over the coming years.

Investors will need to consider the relationship between potential customer demand and the time required to obtain planning permission, secure electricity, and construct specialist equipment. Regulatory uncertainty can affect those decisions, particularly where projects require large amounts of capital before generating revenue.

Clearer environmental standards may improve predictability if the final requirements establish consistent approval criteria. Their effect on development costs and timelines will depend on the technical standards adopted, the treatment of projects already in preparation, and the administrative capacity available to assess applications.

National policy combines investment and sustainability

Portugal has already adopted a National Data Centre Plan through Council of Ministers Resolution 70/2026. The plan establishes 15 initiatives for 2026–2027 across regulation, energy infrastructure, market development, and the relationship between projects and local communities.

The policy seeks to position Portugal as a European location for computing infrastructure while addressing obstacles associated with licensing, electricity connections, and investment conditions. It also recognises the importance of environmental sustainability in managing potential growth.

The forthcoming decree would provide further detail on requirements applying to individual developments. Its legislative status is distinct from the National Data Centre Plan, which has already been approved and is in force.

Other European markets are dealing with similar tensions between expanding computing capacity and protecting electricity networks, water supplies, and local environments. Portugal’s proposed rules would establish conditions for investment at a point when much of the country’s intended capacity remains subject to future development decisions.

The decree has not yet been enacted, and the government has not published a final version establishing every obligation or exemption. Developers can assess the direction of policy, but the binding requirements will depend on the legislation ultimately approved and its application through environmental and infrastructure permitting processes.