Data centre growth is rocketing as the demand exponentially increases to address the economy’s digitisation. According to Cushman & Wakefield, the capacity of data centres online in 63 cities worldwide will increase from 4.9 GW in 2022 to 7.4 GW in 2023, marking a 51% increase. This is creating a challenge for the data centre owners and operators as they need to grow whilst addressing environmental concerns.
And for that, they need to address 5 top challenges:
1. Net zero legislation
The EU has set a target for data centres to be carbon neutral by 2030 by focusing on increasing energy efficiency, waste heat reuse and renewable energy solutions. To reach this goal, the EU plans to facilitate the transition through new and existing initiatives in the form of policy and funding.
Policy instruments that also include data centres in the Netzero scheme are:
- The Ecodesign Regulation
- The Code of Conduct for Energy Efficiency in Data Centres
- The EU Green Public Procurement (GPP) Criteria.
Moreover, the Taxonomy Regulation and its Delegated Act are also being proposed to regulate and incentivize investments in sustainable projects. Funding initiatives are also set to give funding access to solution providers involved in energy-efficient data centres such as Horizon Europe, Connecting Europe Facility 2, Digital Europe programme, InvestEU and the Recovery and Resilience Facility.
Cities have also started to set up their local regulations to make data centres more sustainable. The city of Amsterdam has set a limit on data centres’ annual Power Usage Effectiveness (PUE) to 1.2 for new builds. In Greater London, all new buildings including data centres need to reach a minimum of 35% of on-site carbon reduction. This means new data centres need to re-imagine their design by tapping into a set of innovative solutions ranging from on-site energy, green building, green cooling technologies, and heat reuse.
2. A growing strain on power grids
The development of digital technology has increased the demand for electricity, and the electricity infrastructure is having trouble keeping up. Whilst renewable sources of energy are growing rapidly, they are often not located near data centres. Moreover, the ageing grid struggles with the surge of electricity demand and transport triggered by the acceleration of the data centre footprint. This means data centres need to rethink how they can generate more power onsite (solar PVs, Wind, Hydrogen). They also need to think about how they can become part of the solution (and not only the problem) by leveraging the energy storage on-site to give back to the grid at peak times and monetise this flexibility.
An example of how data centres can address this challenge comes from EcoDataCentre. They positioned their Arctic facility close to several of Sweden’s hydropower plants that power 100% of its electricity consumption. To read more about the electricity consumption of data centres, read our previous article “From Power to Empower: Looking at Data Centres through the Renewable Energy Lens”.
3. Water demand challenge
To operate data centres, water is a vital resource for cooling systems and its consumption is significant. For instance, a 15 MW data centre needs as much water as three average-size hospitals. In locations where water scarcity is a problem, this demand for water may impose a strain on the region’s water supplies. This has raised questions regarding the viability of data centre operations as well as their effect on regional water supplies. Some data centres have started to try to find solutions to their water consumption problems by using recycled water and increasing water usage efficiency.
To address this issue, Microsoft has planned to replenish more water than it uses by investing in wetland restoration and impermeable surface removal so the water would be absorbed back into the water basins. They are also implementing on-site water collection and recycling in 3 of their facilities in the US, Israel and India.
Another example comes from Switch, which planned to complete a pipeline that brings recycled water from Truckee Meadows Water Reclamation Facility by Q1 2023. The water will be used to supply all water requirements from its Citadel data centre campus.
4. Cooling AI infrastructure
The development of new semiconductors for processing artificial intelligence (AI) consumes more energy and generates more heat and associated emissions. This makes cooling data centres more challenging. Conventionally, data centres are cooled by air cooling systems. However, air cooling ceases to be an efficient system to cool the high-density racks used for AI and high-performing computers (HPC).
According to Data Centre Magazine, dielectric cooling fluid can reach an efficiency of 1,500 times more than conventional HVAC cooling. Adopting more efficient and environmentally friendly cooling systems like liquid cooling is one of the solutions to keep up with the cooling demand for AI facilities without compromising environmental sustainability.
5. Increasing demand for lower latency
New data centre technologies are being developed in response to consumer demand for faster processing rates and lower latency. Edge computing and distributed computing are examples of technology that bring computing resources closer to the end user. According to a MarketsandMarkets analysis, the demand for increased processing speed and decreased latency will drive the worldwide edge computing market’s growth from $44.7 billion in 2022 to $101.3 billion by 2027. Data centre operators and owners must prepare for the shift towards edge computing to avoid the risk of falling behind in the rapidly changing market. The growing edge computing market opens new opportunities for data centres to diversify their revenue streams.
Planning and resource management is crucial when building a new data centre. This entails figuring out the facility’s demand, picking the proper energy source, ensuring that digital connections are available, and controlling water supplies. Data centre operators must take into account each of these elements when developing and constructing new facilities, which can be a complicated planning process. This demonstrates the difficulties faced by operators of data centres when constructing new facilities, particularly in areas that are undergoing rapid change.
At NovAzure, we work closely with our clients and ecosystem in the data centre markets to drive decarbonisation strategy and solution implementation. We also help think about how Netzero is an opportunity to create new business models to increase market share. If you would like to discuss with us your Netzero agenda in data centres, please reach out to Philip Cholerton, Partner (p.cholerton@novazure.com) or Jean-Jacques Jouanna, Managing Director (jjouanna@novazure.com). We would be happy to have an initial conversation to discuss market trends and solutions, and discuss how relevant they could be for you to achieve your goals.
