Data centre energy efficiency duties in Germany set to change

Dr. Marc Salevic and Dr. Benedikt Beierle, experts in data centres and digital infrastructure at Pinsent Masons, said the package of reforms that appears to be under consideration by Germany’s coalition government would “move the legislation in a more pragmatic direction”, if it is implemented.

They were commenting after details of a draft bill providing for amendments to the Energy Efficiency Act (Energieeffizienzgesetz, EnEfG) were leaked and published by media outlets. The details reported are relevant to data centre developers, operators and investors, as well as cloud and IT providers, and large industrial heat consumers too, Beierle said.

The EnEfG came into force in 2023 and includes extensive obligations for developers and operators of data centres – both those existing and those that are planned. The legislation has been criticised as overly onerous for data centre operators and changes have been under consideration for some time. The coalition agreement between the Christian Democrats and Social Democrats in Germany, following elections in February 2025, signalled a clear direction towards the abolition of the strict requirements around ‘power usage effectiveness’ (PUE) values and re-use of waste heat.

The reports on the leaked draft suggest that the abolition of those rules will not happen after all, but Beierle said it does appear that the existing rules will be relaxed a little.

PUE value is a measure of the energy efficiency of building technology. The EnEfG sets threshold PUE values that data centres must meet, and those thresholds get stricter over time for existing data centres whose operations start before 1 July 2026.

One of the criticisms of the PUE requirements is that they do not properly account for variations in utilisation, as lower loads can distort PUE values. The reports suggest that not only will the thresholds be relaxed slightly, but that compliance could alternatively be deemed fulfilled if the operator can demonstrate that the data centre was designed and built to meet the PUE requirements when operating at 80% or more of its maximum computing capacity.

Other changes apparently under consideration include to the waste heat provisions in the EnEfG, under which new data centres must provide for re-use of a percentage of their waste heat. The media reports that the exemptions from this requirement are to include greater flexibility going forward.

An important metric relevant to the waste heat provisions in the EnEfG is the energy re-use factor (ERF), which conveys the ratio of the heat from a data centre that is re-used outside of the facility as against the total energy the data centre consumes.

The reports suggest that under the impending new law, the waste heat re-use requirements can also be partially fulfilled by internal re-use within the facility. Furthermore, the already existing catalogue of exemptions for this requirement would be extended with a new exemption according to which the requirements will not apply if, within a radius of five kilometres from the data centre, there is no technically and economically reasonable option to connect to an existing or planned district heating network. Such an assessment would need to be supported by a cost-benefit analysis.

Other amendments trailed in the leaked draft would impact on reporting obligations data centre operators face, which include in relation to waste heat, energy saving plans, and environmental or energy management. The reports suggest that the operators of IT equipment will be expected to cooperate to support data centre operators in meeting the reporting obligations, though protections relating to trade and business secrets will apply.

“Overall, the draft reflects a more pragmatic direction,” Dr. Marc Salevic of Pinsent Masons said. “Businesses will need to assess compliance implications for existing sites, plan for new-build designs, and review commercial/technical feasibility in light of the broadened obligations and exceptions. This work should start by conducting impact assessments now, especially regarding PUE design assumptions, heat utilisation strategies, and upcoming cost-benefit analyses for modernisation. Businesses will also want to closely track the reform process to ensure they can factor upcoming changes into their planning at an early stage.”