Chinese tech giant Alibaba has initiated preliminary discussions with Spain’s solar energy provider Solaria to supply renewable power for a planned data centre south of Madrid, aligning with Spain’s draft rules demanding EU-based operation and data residency.
- Spain proposes data centres must be EU-based with all stored data inside Europe
- Operators need to source 80% renewable energy hourly for sites over 1MW
- Alibaba already operates EU data centres and seeks new renewable partnerships
What happened
Alibaba has engaged in early-stage talks with Solaria, a Spanish solar energy producer, about supplying power for a new data centre planned at Puertollano, approximately 240 kilometers south of Madrid. These discussions aim to secure renewable energy sources to power the facility, which is still in the planning phases.
Spain is currently drafting regulatory requirements that would impact data centre operations, mandating that operators be legally established within the European Union and that all data and metadata remain inside European borders. Alongside these requirements, large data centres will need to source 80% or more of their electricity from renewable sources to maintain grid connections.
Why it matters
This development highlights how cloud and data centre operators like Alibaba are adapting to evolving EU and national policies emphasizing digital sovereignty and sustainability. Spain’s draft decree goes beyond existing EU standards by requiring EU establishment of operators and strict data residency, aiming to protect sensitive information and encourage clean energy adoption.
Alibaba’s talks with Solaria, a company with a large renewable portfolio and significant upcoming solar projects, demonstrate an effort to align business strategies with stringent new rules. This partnership could provide Alibaba with a reliable source of clean power and enable compliance with Spain’s tight regulatory framework, which could become a blueprint for other EU states.
What to watch next
The final version of Spain’s data centre regulations will be pivotal. How the law defines ‘established in the EU’—particularly whether an EU subsidiary of a Chinese parent company like Alibaba qualifies—remains uncertain and will influence Alibaba’s capacity to operate fully in Spain under the new rules.
Additionally, the growth of Spain’s data centre market, expected to increase substantially through 2030, and Alibaba’s broader expansion plans for new cloud regions in Europe could drive further partnerships with renewable energy firms such as Solaria. Market participants will be watching closely how this balance of sovereignty, regulation, and sustainability plays out on the ground.