Mandatory reporting to improve transparency 

At the end of last year, the EU took decisive steps to introduce comprehensive directives targeting data centres. The Energy Efficiency Directive (EED) aims to reduce energy use in Europe by 11.7% by 2030 to help meet the EU Green Deal goal of a 55% cut in carbon emissions by that same date. Under the EED, starting on 15 May 2024, the first step will be mandatory reporting of energy use and emissions from data centres in the bloc, which are larger than 500kW. The requested data should notably encompass floor area, installed power, data volumes, energy consumption, power usage effectiveness (PUE), temperature set points, waste heat utilisation, water usage, and use of renewable energy and cover the period starting from May 2023. 

This reporting mechanism will provide crucial insights into data centre energy performance, enabling policymakers to devise targeted strategies for optimising energy consumption and reducing environmental footprint. 

Simultaneously, the EU is laying the groundwork for establishing a comprehensive scheme aimed at rating the sustainability of data centres. This scheme aims to offer standardised metrics for assessing the environmental impact of data centres and empower consumers and stakeholders to make informed decisions based on sustainability criteria. By holding data centre operators accountable for their energy consumption and efficiency, the EU aims to accelerate innovation towards greener infrastructure, ultimately leading to reduced carbon emissions and mitigating the environmental impact of digital infrastructure. 

In light of the latest Uptime Institute survey, this new regulation could catch a large number of data centre operators off guard. According to their Global Data Center Survey 2023, most colocation operators track established metrics such as power consumption and PUE. Only a minority of colocation providers report water use, carbon emissions, waste disposal schemes or equipment life-cycle data. 

A glimpse into the industry’s energy efficiency progress 

While the industry is accommodating the ever-expanding demands of the digital age, significant advances in data centre performance have been made in recent years. According to the International Energy Agency (IEA), the period between 2015 and 2022 witnessed a staggering increase in internet users by 78%, global internet traffic by 600%, and data-centre workloads by 340%. Despite this exponential growth, the energy consumed by data centres saw a comparatively modest rise of only 20–70%. This remarkable improvement in efficiency can be attributed to a combination of factors. 

One of the driving forces behind the improved energy efficiency within the data centre industry is Koomey’s Law. This empirical observation states that the energy required to perform a fixed amount of computation has been halving approximately every two and a half years. This trend has been instrumental in driving down the energy consumption per unit of computational output, thereby contributing to overall energy savings in data centre operations. 

Moreover, as data centres have expanded in size and capacity to meet growing demand, there has been a shift in the distribution of energy usage within these facilities. Thanks to advancements in hardware efficiency and optimisation techniques, a greater proportion of energy is now allocated to computation. This resource optimisation has led to more efficient energy use within data centres, further bolstering their sustainability credentials.

Furthermore, the industry has embraced a continuous cycle of technology refresh in existing data centre facilities. Operators are investing in the deployment and utilisation of the latest and most efficient technologies, ranging from advanced cooling systems to energy-efficient server architectures. This proactive approach to infrastructure modernisation ensures that data centres remain at the forefront of energy efficiency, adapting to evolving demands and technological innovations. 

A key metric used to measure the energy efficiency of data centres is the PUE rating. This metric represents the ratio of total energy consumed by a data centre to the energy consumed by its IT equipment. Over the years, there has been a notable reduction in PUE ratings across the industry. In Europe, for example, the average PUE has decreased from 1.74 in 2005 to a current average of 1.20. This downward trend underscores the industry’s commitment to optimising energy usage and minimising environmental impact.

The adoption of sustainability initiatives in data centres is frequently motivated by financial considerations. By enhancing energy efficiency within facilities, operating costs are directly reduced, thereby increasing their appeal to tenants and concurrently decreasing carbon emissions. Innovative cooling designs that prioritise efficiency contribute to lower PUE, a factor that not only attracts customers but also contributes to cost savings. Insights from the Uptime Institute’s 2022 data centre survey highlight the growing significance of improved cooling infrastructure and expanded options for renewable energy procurement as primary drivers of sustainability in colocation data centres. 

The significant role of tech giants in renewable energy mass-adoption

In recent years, large data centre operators have significantly embraced renewable energy sources to power their operations. By leveraging solar, wind, hydro, and other renewable resources, these operators are not only reducing their carbon footprint but also ensuring long-term energy resilience. Initiatives such as power purchase agreements (PPAs) with renewable energy providers and investments in on-site renewable infrastructure demonstrate a commitment to environmentally responsible practices while meeting the increasing energy demands of data centres. 

The feasibility of powering data centres with renewable energy largely depends on local grid compositions and the availability of renewable generation infrastructure. Proximity to renewable energy assets and the existence of retail contracts for direct renewable energy consumption play pivotal roles in facilitating this transition. However, challenges arise in procuring sufficient firm renewable energy to fully sustain data centre operations around the clock. To address this limitation, many colocation providers have adopted alternative strategies, such as unbundled renewable energy certificates (RECs), Guarantees of Origin (GOs), or virtual PPAs. These instruments enable businesses to claim a higher percentage of renewable energy and offset their emissions, albeit indirectly. Despite their appeal, these methods do not directly reduce emissions consumed by data centre operations. The Uptime Institute advocates for 24/7 matching PPAs as the most effective approach for directly funding local renewable projects. By engaging in long-term contracts with renewable energy producers, data centre companies not only secure a stable energy supply but also contribute to the expansion of renewable infrastructure. 

The involvement of tech giants has significantly accelerated the adoption of renewable energy in data centre operations. Through PPAs, these companies ensure a reliable revenue stream for renewable projects, facilitating their development. According to BloombergNEF, the data centre industry collectively has added or will add 74 gigawatts of capacity through such agreements. Furthermore, tech companies actively participate in purchasing RECs, which financially support the creation of renewable capacity. Despite criticism regarding the discrepancy between claimed carbon neutrality and actual energy sourcing, RECs play a crucial role in incentivising renewable energy production.

In conclusion, by leveraging various financial instruments and strategic partnerships, data centre operators can not only reduce their carbon footprint but also drive the expansion of renewable energy infrastructure on a global scale.

Heat reuse, in the heat of the moment 

The record-breaking heat wave last summer in Europe, with parts of Greece, eastern Spain, Sardinia, Sicily, and southern Italy seeing temperatures above 45°C, put data centres’ IT infrastructures to a test. Operators fought to provide adequate cooling to ensure uninterrupted connectivity. As global temperatures increase, the cooling systems in data centres must work harder to maintain a stable environment. This can result in higher energy consumption, leading to increased operational costs and an overall larger carbon footprint.

Data centres consume substantial energy, with a significant portion converted into heat. Traditionally, this excess heat, deemed waste, is expelled into the atmosphere, often entailing additional energy expenditure and water usage. However, emerging trends spotlight the potential to repurpose this waste heat, transforming it from a liability into a valuable resource. Efforts to recover waste heat from data centres present an attractive proposition, with the potential to supply thermal power for various industrial, commercial, and residential applications. Studies suggest that up to 90% of the energy utilised by data centre IT can be recuperated as heat, offering a substantial resource for global energy needs. 

While the idea of repurposing heat generated by IT operations is attractive, several hurdles hinder its widespread adoption. Firstly, the thermodynamics and economics of waste heat recovery weigh heavily on the business case. Integrating heat reuse systems adds complexity to data centre planning and requires a significant upfront investment for equipment and infrastructure. Additionally, finding suitable applications for the typically low-temperature waste heat produced by data centres can be challenging, particularly in warmer climates where its use may not be feasible. Moreover, ensuring the reliability and resilience of heat reuse schemes poses a significant challenge. 

Factors such as fluctuating customer demand, maintenance requirements, and potential disruptions can impact the dependability of heat recovery systems. While district heating networks offer some resilience, they may not always provide sufficient reliability for mission-critical applications. 

The Nordic region stands out as a pioneer in waste heat recovery, where economic feasibility intersects with sustainability goals for businesses and policymakers alike. Leveraging their established district heating networks, Nordic countries facilitate partnerships between data centres and heat consumers. Such initiatives not only contribute to sustainability goals but also foster economic benefits and enhance public perception. Sweden has emerged as a global frontrunner in the adoption of large-scale waste heat recovery initiatives, particularly from data centres, boasting 30 facilities integrated into its district heating infrastructure. Denmark showcases a significant commitment, with approximately 60% of households already linked to district heating systems, facilitating the straightforward implementation of waste heat reuse projects. Similarly, Finland, among the Nordic nations, features widespread district heating networks, fostering a burgeoning market for waste heat utilisation. 

Governments worldwide are increasingly showing interest in implementing waste heat recovery initiatives. Within Europe, the primary legislative instrument expected to wield significant influence is the recast of the EED. More specifically, article number 24, which mandates that EU members ensure waste heat recovery is incorporated into data centres with an IT capacity of 1 MW and above or demonstrate that such integration is technically or economically unfeasible. Moreover, data centre operators must disclose their efforts in regular reporting using the energy reuse factor (ERF) metric. In addition to the EED, some European states, including Denmark, Germany, the Netherlands, and Norway, have implemented their own measures.

Sustainability hurdles; balancing environmental goals with financial realities 

Improving sustainability performance poses significant challenges for colocation data centre providers. A key obstacle lies in the limited control they have over the servers, the primary consumers of energy within their facilities. Unable to consolidate workloads or deploy power management software, providers are compelled to focus primarily on reducing the environmental impact of facility operations. 

Design decisions hold immense weight, particularly for older sites burdened with outdated cooling infrastructure and high power usage effectiveness (PUE) metrics. Retrofitting these legacy sites is not only expensive and time-consuming but also risks disrupting operations. Moreover, operators in regions with high carbon intensity grids face financial burdens, as they must either invest in renewable energy procurement or purchase RECs to mitigate emissions. 

The greening of the industry demands substantial investment, posing a significant hurdle for providers striving to enhance their sustainability performance. 

_{Read the articles within Spotlight: European Data Centres below.}