France

In terms of the number of data centres, France ranks sixth worldwide and third in Europe, behind the United Kingdom and Germany. Paris has become the third-largest European hub in terms of installed capacity (683 MW as of the end of 2024), behind Frankfurt (approximately 2,900 MW) and London (1,000 MW). At the Paris AI Action Summit in February 2025, more than €109 billion in private investment was announced for data centres and AI, and in 2025, according to the Trendeo Observatory, data centres alone accounted for approximately €67 billion of the €125 billion in industrial investments announced in France, making the country the world’s leading recipient of foreign investment in data centre construction that year.

The French Government’s ambition is to make France ‘an AI powerhouse’, as outlined in the third phase of the National Strategy for AI launched in February 2025 as part of France 2030. To date, 63 sites have been identified as suitable for data centre development, including five so-called ‘fast-track’ sites with a connection potential exceeding 700 MW within three to four years, and the total power capacity sought by project developers amounts to 28.6 GW, of which 5.8 GW has already been secured. France can rely on major strengths in this respect: 95% carbon-free electricity, record production from a powerful nuclear fleet, a reliable extra-high-voltage grid (99.9995% availability), and attractive prices for energy-intensive users. However, these aspirations are increasingly coming up against difficulties linked to development timelines and issues of local acceptance, with growing concern over environmental issues, particularly those relating to water usage. What follows is a thematic analysis of France’s position according to the four principal dimensions of the comparative framework applied throughout this publication: securing grid access (referred to in this chapter as ‘Securing Network Access’), power procurement (‘Sourcing Power’), national strategy and planning (‘Policy framework, incentives, and consenting’), and environmental obligations.

Key contacts

Gabrielle Reddé
Counsel
[email protected]

Barthélémy Courteault
Partner
[email protected]

Frédéric Salat-Baroux
Partner
[email protected]

Securing Network Access

The unbundling framework and site selection implications

France operates a strict unbundling model. Transmission at high and extra-high voltage is the exclusive responsibility of the French electricity transmission system operator, RTE. Distribution is handled by Enedis and the local distribution companies, all operating under the supervision of the Energy Regulatory Commission (“CRE”), the independent national regulator. All network users benefit from non-discriminatory access rights. As a consequence of the unbundling framework, data centres may not own or operate public network infrastructure. The sole exception, a closed distribution network, is a marginal and rarely used structure in practice.

For sponsors and investors, the principal practical implication is the need to identify and secure a suitable site at a very early stage: specifically, one that is proximate to a RTE or Enedis substation of sufficient capacity for the project’s power requirements. This is particularly important in areas that RTE and the State have already identified as suitable for high-power demand.

Navigating the connection queue

Connection to the network is governed by the French Energy Code, which establishes a right of connection for all users on transparent and non-discriminatory terms. The standard RTE connection procedure comprises the following stages: firstly, a feasibility study (completed within six weeks); secondly, a technical and financial proposal (“PTF”) issued within three months of the feasibility study; thirdly, placement on the connection queue upon acceptance of the PTF, on a first-come, first-served basis; fourth, execution of a connection agreement; and fifth, completion of works and commissioning. Overall delivery timelines vary considerably, depending on the scale of the connection works, the project’s location, and the planning and environmental procedures applicable to the relevant substation and power line infrastructure.

Demand pressure on the queue is very high. Several dozen gigawatts of capacity are already reserved, with the backlog particularly concentrated in Île-de-France. Under the standard procedure, sponsors should plan for connection timelines of seven to ten years. RTE’s fast-track procedure, introduced in 2025, can reduce this to 3 to 4 years for projects above 400 MW, subject to payment of a specific congestion contribution. This is a significant concession that sponsors of large-scale projects should assess carefully against the premium cost.

In principle, the connection application does not require a planning permit to have been obtained at the time of submission. However, the application must contain sufficiently precise and finalised project details to satisfy RTE’s requirements, and any material changes to those details may lead to the applicant losing their position in the queue. The procedure effectively locks in relatively mature projects, so sponsors should not underestimate the degree of design and site certainty required before submitting.

Connection costs follow a split allocation regime. The costs of dedicated connection works are borne by the project. Upstream network reinforcement costs are shared through the network usage tariff (“TURPE”), and recovered from all French consumers. Under the standard regime, the costs resulting from a given connection are in principle borne in full by the first applicant requesting that capacity; cost-sharing between multiple projects is not a general entitlement, but is available under a specific scheme introduced in 2023 for major high-voltage works, which sponsors of large-scale or campus-style developments should investigate at an early stage.

Finally, since 2025, RTE has the authority to reduce a project’s reserved connection capacity where actual power drawn falls materially below the subscribed level. This mechanism is designed to address speculative reservations and free up capacity across the queue. For new installations, this operates either as an immediate full-capacity connection subject to reassessment after five years, or a gradual ramp-up over a minimum of ten years with at least three adjustment points. For existing installations, reserved capacity is recalculated on the basis of the maximum power drawn over the preceding five years, uplifted by 25%. Compensation for capacity reduction is available only for agreements signed before 1 August 2025 and is capped at 60% of residual costs. Sponsors negotiating connection agreements after that date should assume no compensation entitlement and structure their power take-up commitments accordingly.

Demand response, tariff optimisation, and load flexibility

Data centres are not subject to any sector-specific flexibility requirements. However, they may participate in demand response, capacity, and interruptibility schemes, as well as in demand response tenders administered by RTE. Participation across the sector remains limited in practice, although growing grid pressure and RTE’s evolving demand-side strategy make greater engagement increasingly likely over the medium term. For operators able to adjust their load profile, these mechanisms offer a potential route to both tariff savings and improved connection terms, a consideration that sponsors should factor into site selection and operational modelling from an early stage.

Connection contracts are also increasingly incorporating power modulation clauses in exchange for tariff concessions, offering a further lever for managing network costs at high-consumption sites. The network usage tariff, TURPE 7, applicable to the French electricity transmission and distribution networks for the 2025–2028 period, reinforces the price signal during peak periods and typically accounts for 30–40% of the electricity bill. Large, stable consumers may qualify for reductions of up to 80%, subject to conditions that include maintaining an appropriate consumption profile and, for the deepest discounts, holding an ISO 50001 energy management certification.

France has simultaneously completed the roll-out of smart meters, and is significantly increasing grid investment at scale, which will result in a gradual rise in transmission tariffs that should be reflected in financial models from the outset.

Sourcing Power

Procurement routes: PPAs, CAPNs, and the post-ARENH landscape

Data centres may source electricity in several ways: firstly, spot market purchases; secondly, renewable PPAs (whether on-site or off-site); thirdly, nuclear production allocation contracts (“CAPNs”), and fourth, in limited cases, self-consumption arrangements or direct supply lines (the latter subject to prefectural authorisation, and still rarely used in practice). One structural feature of the French market warrants early attention: unlike several other European jurisdictions, the vast majority of PPAs executed in France are physical rather than virtual, with consequences for network charging, tax treatment, and hedging structure that sponsors must address at the outset of any procurement process.

The expiry of the regulated nuclear access scheme (“ARENH”) at the end of 2025 and the progressive ramp-up of CAPNs are together expected to increase the relative appeal of long-term renewable PPAs as a price-hedging instrument for large consumers. Hybrid PPAs, combining renewable generation with co-located or co-contracted battery storage, are also gaining traction, particularly among data centre operators seeking a stable, continuous power supply.

The choice of procurement route carries material tax and charging consequences. Off-site physical PPAs attract the full suite of grid-related charges, including TURPE, excise duty on electricity, the territorial contribution on electricity consumption (“CTA”), and VAT. On-site PPAs and self-consumption arrangements significantly reduce this burden by avoiding or limiting exposure to TURPE and certain other charges, and should be carefully evaluated as part of any site-level cost modelling.

Excise duty on electricity is subject to a reduced-rate regime for highly electricity-intensive sites that meet applicable environmental performance criteria. Data centres exceeding the relevant consumption thresholds may qualify, with applicable rates ranging from €0.5 to €7.5 per MWh, scaled according to the site’s electricity intensity and its degree of exposure to international competition. Operators should take early advice on whether their facilities qualify, as well as on the interaction between the reduced rate and the energy management certification requirements that condition access to the deepest TURPE discounts.

Guarantees of Origin: structure, additionality and temporal matching

France operates exclusively within the European GOs system, administered through the European Energy Exchange (“EEX”) and the Association of Issuing Bodies (“AIB”) hub. Unlike several other jurisdictions, France does not recognise RECs, REGOs, or I-RECs. GOs are fully interchangeable across the European system, though operators and their counterparties frequently favour French-issued GOs in practice, due to the commercial and reputational demand for geographic anchoring.

GOs are decoupled from the physical sale of electricity, and may be purchased separately on the secondary market. One important exception applies to generation assets that have received public support: in those cases, GOs vest in the State and are made available through public auction, rather than passing to the generator or being available for bilateral purchase.

There is no statutory additionality requirement within the GO framework. However, the voluntary VertVolt label, administered by the French public agency for ecological transition (“ADEME”), introduces more stringent criteria for operators intending to make credible renewable energy claims. These criteria include the joint procurement of electricity and GOs from the same source, a minimum proportion of generation from installations not receiving public support, as well as certain vintage and proximity requirements. Operators pursuing externally verified sustainability commitments, or subject to CSRD disclosure obligations, should assess whether their GO procurement strategy meets VertVolt criteria or an equivalent standard, given the growing scrutiny of unqualified “100% renewable” claims.

Temporal matching in France currently operates on a monthly basis. This is increasingly out of step with the direction of European policy and market practice, which is moving towards hourly matching as the credibility standard for renewable energy claims. Emerging EU guidance and the reporting frameworks of several sustainability rating agencies already reflects this shift. Operators and sponsors should therefore treat monthly-matched GOs as a transitional compliance tool rather than a durable reputational asset, and build into their procurement strategies the flexibility to migrate to hourly matching as market infrastructure and regulatory requirements evolve.

Nuclear baseload: CAPNs and SMRs

EDF offers CAPNs as long-term supply instruments, typically structured over 10 to 15 years, entitling the holder to a defined share of output from EDF’s existing nuclear fleet at a price reflecting the fleet’s operating and capital costs. These contracts succeed the ARENH, and are designed to offer long-term price certainty, currently €65 to €70 per MWh, decoupled from the volatility of short-term wholesale markets. They deliver inherently low-carbon baseload power supply without reliance on the GO framework for emissions accounting purposes. CAPNs may be combined with renewable PPAs to construct a diversified, low-carbon supply portfolio. A number of industrial consumers and at least one leading data centre operator, Data4, have already signed CAPNs, illustrating that the product is commercially available and bankable, rather than a merely prospective option.

SMRs represent a potential long-term option. Co-location of SMRs with large data centre campuses is under active study in France, with the main benefits being controllable, scalable output, and proximity to load. Both are highly valuable to hyperscale operators seeking to manage grid dependency. However, SMRs remain at the pre-commercial stage in France, and the realistic deployment timeframe, taking into account regulatory approvals, site selection, and construction, extends well beyond the current investment horizon for most data centre projects.

Policy framework, incentives, and consenting

France’s AI strategy and the available fiscal levers

France’s National AI Strategy (“SNIA”) makes data centres a pillar of public policy. The strategy explicitly presents France’s highly decarbonised energy mix, strong electricity export capacity, and grid reliability as competitive advantages in attracting computing infrastructure at scale. The scale of private investment already announced validates that proposition in practice: major commitments from hyperscalers and established operators confirm that France is regarded as a Tier 1 destination for large-scale campus development in Europe.

The government’s principal instruments are facilitative, rather than financial. Policy priorities are concentrated on site identification, permitting support, and strategic coordination, notably through the DGE task force and the France 2030 programme, rather than on direct capital subsidies. Direct financial support is available in one principal area: heat recovery, through ADEME’s Heat Fund, and the mandatory recovery obligations applicable since 2025.

The main tax incentives include reduced excise duty and the TURPE allowances (as described in section 6.1.3), both of which can materially reduce the operating cost base for qualifying sites.

The standard corporation tax regime is 25%, with no dedicated data centre economic zone or ring-fenced relief. The most significant tax variables at project level are local in nature: principally property tax and CFE, where the classification of a data centre as industrial rather than commercial premises has a significant impact on the applicable tax base.

OIV status, NIS2 compliance, and ANSSI engagement

Data centres that meet the relevant criteria may be designated as operators of vital importance (“OIVs”) under French law, and will in any event qualify as essential entities within the NIS2 regulation, as transposed into French law, with enhanced cybersecurity and supervisory obligations imposed and enforced by ANSSI, the French national authority. ANSSI imposes robust technical and organisational measures. The current framework reflects an ongoing consolidation of obligations previously spread across the French OIV, NIS1, and NIS2 regimes. Operators must comply with a structured incident reporting regime comprising an initial alert, interim reports, and a final report, with timelines and content requirements specified by ANSSI. Sponsors and operators should take early advice on whether their facilities will attract OIV designation, which carries more demanding obligations than essential entity status alone, and should build ANSSI engagement into their project development and operational governance programmes from the outset.

Cloud service providers serving the French public sector or operating in sensitive sectors should also consider SecNumCloud certification, which has become the de facto standard for certain public procurement contracts. SecNumCloud imposes stringent requirements regarding data localisation within France, governance structures, and shareholder control, all of which may present structural challenges for non-EU headquartered cloud providers and should be assessed at the earliest possible stage of any market entry strategy.

Foreign investment controls and emerging EU coordination

Data centres may constitute sensitive infrastructure for the purposes of France’s foreign investment screening regime. Whether prior authorisation is required for a given transaction currently depends on a combination of factors: firstly, the size of the data centre; secondly, whether the target operates across multiple sites; and thirdly, the sensitivity of the clients served (with exposure to OIV clients being a particularly significant trigger).

The French framework is converging with the proposed European FDI Regulation to increase scrutiny of acquisitions involving critical digital infrastructure and greenfield data centre projects. We anticipate this will involve tighter controls and broader notification obligations for investors.

Data sovereignty: localisation requirements and transfer restrictions

There is no general obligation to localise private data in France. Localisation or quasi-localisation requirements arise principally in: sector-specific regimes (notably for certain health data, defence-classified information, and some police and justice data); the SecNumCloud qualification framework described above and the associated “cloud de confiance” doctrine, which in practice lead French public bodies and certain sensitive operators to use EU and often France-hosted trusted cloud services; and GDPR’s restrictions on transfers of personal data outside the European Economic Area, which require specific conditions to be met for international transfers rather than mandating data storage in any particular country.

The hosting of health data requires both HDS certification and a specific contractual framework with the data controller. Defence-classified data is subject to requirements of a materially higher order, which have direct implications for the physical security architecture, access control design, and choice of technology providers at affected facilities.

Data centre operators that process or transit personal data flows across EEA borders should be aware that the competent authority (the “CNIL”) has the power to suspend international transfers in cases of non-compliance with applicable transfer mechanisms. This power should be reflected in the standard contractual frameworks governing cross-border data flows, and operators should ensure that their transfer impact assessments and supplementary measures remain current in light of the CNIL’s evolving enforcement posture.

Planning classification: the “warehouse” problem and reform prospects

Data centres do not occupy a discrete category in the French urban planning system. They are generally classified under the “warehouse” sub-category, which restricts their location to suitable business parks and may lead to restrictions that are inappropriately calibrated to the operational and spatial requirements of modern data centre facilities. Certain projects, particularly those specifically dedicated to the roll-out of network coverage by electronic communications operators, may be reclassified as “facilities of public interest and public services”; others may benefit from a more permissive interpretation under local planning regimes, depending on the applicable case law in the relevant jurisdiction. Proposed legislative reforms aim to resolve this ambiguity.

All projects must comply with the hierarchy of national and local planning documents: the regional spatial planning scheme (“SRADDET” or “SDRIF”), the territorial coherence scheme (“SCoT”), and the local urban plan (“PLU/PLUi”). Compliance with this hierarchy is a condition of planning permission and must be verified at the outset of any site selection process.

PINM designation and accelerated permitting

Data centres require both planning permission and authorisation under the regime for installations classified for environmental protection (“ICPE”). The ICPE regime is not specific to data centres, but applies to a wide range of industrial and high-impact facilities. Data centres are generally subject to the full authorisation procedure, which is consolidated under the single environmental authorisation (encompassing ICPE, water, Natura 2000, protected species assessments). In addition, data centres are subject to the Zero Net Land Take (“ZAN”) law, which imposes binding quotas on the consumption of undeveloped land. With this, ZAN compliance is an increasingly significant constraint on greenfield site selection and should be addressed during the earliest stages of site identification, before committing substantial development costs. In the Paris region, data centre projects exceeding 5,000 m² of floor area are also subject to the commercial property approval procedure. The overall lead times for a greenfield project remain in the region of five years or more, reflecting the cumulative demands of planning, environmental, and ICPE procedures, although several recent reforms aim to accelerate pathways for strategically significant projects.

The most important of these is PINM status, which is being extended to data centres on the basis of qualitative criteria (sovereignty, ecological transition, power, and investment), rather than a fixed power threshold, making it accessible to a broader range of projects than a purely capacity-based test might allow. PINM designation carries several procedural advantages: firstly, centralisation of building permit processing at prefectural level; secondly, accelerated harmonisation of applicable planning documents; thirdly, facilitation of exemptions for protected species (“RIIPM”); and fourth, priority treatment for RTE connection applications.

Environmental obligations

The ICPE regime and single environmental authorisation

The obligation to carry out an EIA stems mainly from the ICPE regime, with the applicable thresholds determined by reference to the installed power of generators and other equipment. The single environmental permit consolidates the various environmental consents (covering ICPE, water, Natura 2000, and protected species), but does not merge with, or replace, the building permit. The two authorisations proceed on separate tracks, and a project may obtain one before, or independently, of the other. Large-scale projects located in sensitive areas, particularly those raising water management or biodiversity concerns, are subject to stricter requirements.

More generally, recent years have been characterised by a tension between procedural acceleration, reflected in the single environmental authorisation and the PINM fast-track, and tightening substantive environmental requirements, which are likely to become even more stringent in the coming years.

Efficiency disclosure: PUE transparency without mandatory thresholds

France imposes transparency obligations, rather than mandatory regulatory thresholds: data centre operators are required to make annual declarations of efficiency indicators, including PUE (as well as potentially WUE and CUE), on the national platform, but no minimum PUE or equivalent regulatory floor has yet been enacted. This position distinguishes France from jurisdictions that have moved to mandatory efficiency thresholds, and reflects a policy choice, still under review, to drive performance improvement through disclosure and fiscal incentive rather than direct regulation.

Non-compliance with reporting obligations attracts administrative penalties. More significantly, reported efficiency performance determines access to certain tax benefits (notably the reduced excise duty rate) and the implementation of a certified energy system (ISO 50001 certification being the most relevant standard) is a condition of access to the deepest available tariff reductions under TURPE. Energy performance is also taken into account in the context of the cost-benefit analysis required for the waste heat recovery obligation, and influences the outcome of the environmental authorisation process. Sponsors should additionally be aware that energy performance requirements intersect with the RTE fast-track procedure and sustainable building design requirements, including the greening and solarisation of rooftops under applicable construction standards. Managing these intersecting obligations as a coherent operational and compliance programme, rather than addressing each in isolation, will be essential for operators seeking to optimise both their regulatory position and their cost base.

Mandatory heat recovery: the ERF requirement and ADEME support

Since 2025, data centre operators with an installed capacity of 1 MW or above have been subject to a statutory obligation to recover waste heat, with a minimum Energy Reuse Factor (“ERF”) of 0.20, which is set to increase over time. An exemption is available where a cost-benefit analysis, conducted in accordance with the methodology specified by the competent authority, demonstrates that heat recovery is not technically feasible or economically viable in the project’s specific circumstances, for example due to the data centre located at a geographical distance from heat networks, district heating infrastructure, or other facilities capable of utilising the recovered heat. A transitional regime applies to data centres where a planning application was submitted before 1 January 2026. Under this regime, the operator must carry out the cost-benefit analysis and submit it to the competent administrative authority by 1 October 2027.

ADEME’s Heat Fund provides financial support for qualifying heat recovery investments. It is a potential value-creation lever for greenfield projects, where recovered heat can be supplied to adjacent users. It is also an increasingly major point of scrutiny in environmental assessments and relations with local authorities which are acutely aware of both the environmental and economic value of waste heat utilisation.

ESG disclosure, extended producer responsibility, and greenwashing risk

Beyond the European rules on CSRD and taxonomy, data centre operators must publish detailed annual energy performance information on the national platform described above. These transparency obligations, combined with ‘green’ tax criteria, local authorities’ expectations, and lender ESG requirements all focus on the performance trajectory over time (not just the initial PUE) as central to the project’s acceptability and bankability.

The French Extended Producer Responsibility (“EPR”) regime under Article L. 541-10 of the French Environmental Code, requires ‘producers’ of electrical and electronic equipment (defined broadly as any person who manufactures or has manufactured under their brand, sells under their brand, imports, places on the market, or sells at a distance in France) to contribute to the prevention and management of waste from these types of equipment. However, this framework is not intended to apply to operators of data centres, who do not qualify as ‘producers’ for these activities.

As of July 2026, no enforcement action had been taken against a data centre operator in France specifically for greenwashing. However, the Competition Authority’s study of December 2025 identified material risks of biased data and non-disclosure in the sector’s environmental communications, whilst the CRE’s March 2025 report on PPAs calls for greater transparency regarding the additionality of both CAPNs and PPAs.

Real estate and site structuring

Site identification: land policy and the ZAN policy

France has launched a national land strategy for data centres, combining the identification of ‘ready-to-use’ sites, which are already connected or have a mechanism of pre-reservation of electricity capacity, prioritising the use of brownfield sites, and the establishment of regulated allocation procedures for strategic public land. Site choice is the project’s primary determining factor. It must take into account the urban context of the site. Under current legislation, premises housing data centres are, in principle, classified under the ‘warehouse’ sub-category, which may affect their eligibility in certain areas of the local authority’s local urban development plan PLU or inter-municipal plan PLUi” and lead to restrictions that are not always suited to the specific characteristics of these facilities.

Added to this is the authorisation process, as noted above. Data centre projects require planning permits and frequently fall under the regime for classified facilities for environmental protection. In Île-de-France, projects exceeding 5,000 m² of floor area are subject to a commercial property approval procedure, which underscores the importance of the initial site selection. From an operational perspective, brownfield sites or former industrial sites can offer real advantages as they may already be located in areas compatible with intensive use. They are often situated in areas already designated for economic activities, are less exposed to the risk of land-use conflicts, and may benefit from prior assessments or studies that facilitate the processing of permits. They are part of the zero net land take (“ZAN”) policy, which encourages the re-use of already developed land and brownfield sites rather than the consumption of natural, agricultural or forest land. This policy requires that data centres must be accounted for within local or regional land take quotas.

Grid proximity as a site selection criterion: RTE and Enedis Connectivity

Electricity connection is also a major real estate consideration. In France, a site’s suitability depends on its proximity to a suitable substation operated by the transmission system operator (“RTE”) or distribution operator (“Enedis”), the available capacity in the area in question, and the possibility of securing a connection schedule compatible with the project. The ‘connectability’ or 'easily connected' nature of the land is a property selection factor, on an equal footing with the buildability or availability of the plot.

The French government has begun to develop a proactive approach to electricity capacity for sites considered to be strategic. A capacity pre-reservation procedure for certain sites was introduced in 2025 by the French Energy Regulatory Commission (“CRE”), combined with fast-track connection mechanisms for sites identified as priorities, with a target timeframe of 3 or 4 years (instead of 6–9 years) for high-power sites (up to 400 MW).

Fibre access, routing rights, and securing network easements

A data centre must have access to a reliable connection to electronic communications networks. This involves checking not only the proximity of fiber networks, interconnection points and data transport infrastructure, but also the feasibility of routing the necessary wires and other equipment to the site and then within the site. Where a site is detached from a larger property complex, or where a campus is developed in successive stages, care must be taken to ensure that deeds of sale, leases or partition agreements expressly provide for the rights of way and use for electricity networks, fibre, internal roads, water and other utilities.

Industrial classification and the property tax consequences

The French Council of State has ruled that data centres cannot be classified as storage premises within the meaning of the provisions applicable to the tax on the creation of offices, commercial premises or storage premises in the Île-de-France region. This exclusion means that, depending on the scale and predominant role of technical installations, the data centre may be considered an industrial establishment for the purpose of assessing its property rental value. Consequently, the property structuring of a data centre project must incorporate, from the outset, an analysis of the potential implications regarding property tax, the CFE (business property tax) and, more generally, rental value.