The H2Zero Research Unit has published a new outlook on the feasibility of developing large‑scale data center infrastructure, demonstrating that Cyprus can attract 20-100 MW-class facilities that are both economically attractive and aligned with Europe’s goals on digital and green transition.
The study is based on an integrated techno‑economic model that evaluates electricity grid capacity, cooling technologies, computational efficiency and financial performance across configurations ranging from 5 MW to 100 MW of IT load. The modeling confirms that Cyprus’ existing grid infrastructure can host data centers up to about 100 MW of IT load without major reinforcement, with the largest configuration representing just 8.79% of national installed capacity and remaining well below a 20% feasibility threshold.

From an economic perspective, the results are particularly promising. A medium‑sized 20 MW facility reaches a 2.1‑year payback period with a net present value of €35.9 million over 10 years, while a 100 MW extra‑large facility achieves a 1.8‑year payback and a net present value of €142.5 million. Investment returns scale linearly with facility size, and the internal rate of return remains around 25% for medium to extra‑large configurations due to a largely uniform cost structure.

The study also highlights that annual energy use scales linearly with IT load under modern, efficient designs that include cooling, power distribution and auxiliary systems. A 20 MW facility, for example, requires 227.8 GWh per year and 0.35 million m³ of cooling water, while a 100 MW facility requires 1,138.8 GWh per year and 1.74 million m³. A key competitive advantage for Cyprus arises from coastal locations with direct access to seawater, which can reduce cooling energy consumption by roughly 10-15% and improve efficiency compared with inland, air‑cooled sites. This strengthens both energy efficiency and environmental performance, and the study’s location scoring model ranks Larnaca and Paphos coastal areas particularly highly when grid distance, fiber backhaul and cooling conditions are combined into a composite index.

The outlook further shows that data center investments in Cyprus can actively support the country’s renewable energy transition. By providing large, flexible, always-on demand, data centers can absorb surplus solar and wind generation and thereby reduce renewable energy curtailments while sustaining competitive green electricity prices.

Overall, the study concludes that Cyprus’ data center opportunity is technically feasible, economically viable and strategically aligned with European digital economy priorities. Grid infrastructure can accommodate 50-100 MW‑class facilities without major reinforcement; modern cooling systems combined with Mediterranean seawater access deliver efficiency levels comparable to established Northern European hubs; and facilities can achieve around two‑year payback, strong net present values over 10 years and internal rates of return near 25% for medium to extra‑large scenarios.

By combining its geographic position, renewable energy resources and robust fiber connectivity, Cyprus can build a sustainable competitive advantage in the emerging markets for AI, cloud and high‑performance computing services.

Statement by Professor Andreas Poullikkas:
“Our modeling shows that large‑scale data centers in Cyprus are not only technically feasible, but also financially attractive and fully compatible with the country’s clean energy transition. With proper planning, we can host 20-100 MW class facilities that help absorb surplus renewable generation, reduce curtailments and create high‑value digital infrastructure at the same time. Cyprus is uniquely placed to serve as a Mediterranean gateway for AI, cloud and high‑performance computing workloads connecting Europe, the Middle East and Africa. Through our H₂Zero Research Unit we invite policy makers, investors and young scientists to work with us on turning this vision into a concrete roadmap and a pipeline of real projects.”

Read here a brief review of the results with graphics.