Energy efficiency crucial to digital infrastructure growth

Sustainability is the biggest hurdle to digital infrastructure growth, but it is a challenge that can be overcome, experts agreed at Real Asset Media’s ‘Unlocking Opportunities: Digital Infrastructure & Data Centres’ briefing, which took place recently at PwC’s offices in London.

Tom Henwood, Associate Director, ICG Real Estate

“Data centres account for around 3% of global emissions, the same as the aviation industry, and we know that the demand for data will only intensify over time”, said Tom Henwood, Associate Director, ICG Real Estate. “But we can flexible, we have the technology, hydrogen battery storage is available. I see no reason why in a few years’ time data centres could not be powered by renewables.”

Power availability is a major concern for the sector, with data centres already consuming an estimated 1-2% of global electricity generation.

“By 2035, global ECT energy consumption is projected to exceed 6-7% and could reach an astonishing 65% by 2050”, said Thomas Veith, Partner, Global Real Estate Leader, PwC. “So optimizing energy efficiency at the chip level and data centre level is crucial to addressing the growing demand for artificial intelligence. We will see more and more energy efficiency initiatives”.

The use of renewable energy, solar plants or wind farms to power data centres, is one obvious solution that real estate investors are focusing on. However, it must be kept in mind that, however committed the industry is to net zero targets and reducing carbon emissions, “competition for renewable energy will increase as other sectors also seek it”, said Veith.

As necessity is the mother of invention, new solutions are being found. Edge data centres, for example, are one way to reduce energy and water costs, as they are smaller and closer to end users.

New chip technologies, such as heterogeneous integration and smaller node sizes, are being developed to boost computing and power efficiency. Advanced cooling techniques, workload and energy management, and renewable energy usage can help reduce power consumption in data centres.

“There are also plans to recycle the heat generated in the data centres and use it to heat residential and commercial spaces, with the first pilot projects already in place in the UK”, said Veith. “Natural cooling in cold climate locations and waste heat usage are effective strategies for improving energy efficiency”.

As technology advances and new solutions are implemented, developing data centres will become easier and more acceptable. At present, there is resistance and they attract controversy due to the high energy and water consumption, which puts a strain on national climate targets and power grids.

“New data centres for generative AI use 5 to 6 times more power and water”, said Tania Tsoneva, Senior Director, Global Infrastructure research, CBRE Investment Management. “But developers and operators are working very hard on techniques to recycle water and lower water consumption. It’s a big focus and the problem may be easier to solve than the power issue”.

Across Europe countries and cities have introduced stricter environmental conditions. Amsterdam, for example, has a moratorium in place on hyperscale data centres, while in Dublin all new data centres are required to have on-site generation of energy, possibly renewable.

“We’re seeing alignment between progress in technology and sustainability and, as costs escalate, innovative solutions are found”, said Henwood. “The sector gets a bad rep, but  data centres perform a really essential function, delivering something people need”.