At the forefront of the digitalisation age and the human need for stronger, faster connections to each other and our communities, data centres occupy a crossroads in today’s interconnected world.
By Chris Pennington, director of energy and sustainability at Iron Mountain Data Centres
With the market set to continue its expansion in 2023, with some predicting growth of 7.5% and an accumulated value of $200 billion by 2032, the prevalence of data centres in the efficient running of our cities and communities is likely to expand too – along with the impact they have on the environment.
As we enter a new year, operators and customers will be focusing their efforts, in light of increasing concern around meeting decarbonisation targets, supply chain instability and the ongoing energy crisis. From operational resilience in the face of global energy scarcity and the anticipation of increasing ESG reporting regulation, to climate-first cultural attitudes seeping into business priorities and community-led big-tech activism – outlined below are the top four data centre trends of 2023 that industry players must be cognisant of.
Sustainable by design: Building resilient data centres
This year has seen the sweeping impact of an energy crisis that has hit individuals and businesses alike. A spate of concerning geo-political events and the scarcity and soaring cost of fossil fuels, alongside the growing frequency of climate events, has unequivocally proven the need for investment in carbon free energy to avoid future energy crises and to mitigate climate change. In terms of what this means for data centre providers, these events have added weight to the need to transition from being carbon-intensive and part of the mass-consumption of natural resources, to carbon neutral and sustainable by design.
In line with the guidance outlined by the UN’s Sustainable Development Goals (UNSDG) on future construction, builders of new data centres must be responsible when it comes to extracting natural resources, both directly and indirectly and aim to power facilities with energy from 100% carbon free sources. Designers must seek ways to better manage waste streams and optimise asset and resource lifecycles by transitioning away from single use designs, towards a model of recycling, reusing, and remanufacturing – thereby eliminating landfill impact and creating a perpetual lifecycle for materials and equipment.
Energy efficiency is a function of good design and many of the newest and most energy-efficient builds in the colocation industry are committed to the BREEAM green building standards. Signatories, including Iron Mountain, to the Climate Neutral Data Centre Pact, for example, have made clear commitments to achieving low Power Usage Effectiveness (PUE), responsible water usage, and repurposing waste heat. Furthermore, many data centres are now designing a modular approach to manage megawatt scale growth with the intention of avoiding overprovisioning. Operators would do well to consider the Total Cost of Ownership (TCO) beyond the business cost per megawatt installed and rethink the status quo. They have an opportunity to carry forward the momentum that global challenges have inspired and take a holistic view of the wider impact of their data centre construction and operations. During a time when the energy supply chain is unreliable, building sustainability into the data centre by design is a shortcut to ensuring long-term resilience.
The future of data centre power
Data centres are some of the biggest energy buyers in infrastructure and following the ongoing disruption of traditional energy supply lines, it is critical that the sector works collaboratively to decarbonise the international grids. Many data centre providers are already well on the way to reducing demand for fossil fuels by covering 100% of their annual electricity consumption with renewable energy purchases and in fact, some, including Iron Mountain Data Centres, have taken decarbonisation even further, by committing to match their energy consumption with local, clean energy each hour of every day by 2040. Meanwhile, investment in research for alternative energy sources to provide backup power in case of outage is expected to increase, with recent testing of hydrogen fuel cell systems taking place with positive results.
Hydrogen will have a role to play in our carbon neutral energy future, but with around 99% of hydrogen still derived from fossil fuels according to the International Energy Agency (IEA) and on-site energy storage remaining a challenge from a capacity perspective, there is still work to be done to develop clean hydrogen alternatives, to a point where the reliance on backup diesel generators can be phased out completely.
Luckily, hydrogen can be produced from various clean energy sources like electrolysis powered by wind and solar, so if the will remains to develop green hydrogen as a carbon-free alternative, the industry must surely find itself inevitably moving towards that goal. Crucially, regulation can accelerate this journey by incentivising proper tracking and certification of where green hydrogen has been sourced from.
Prepare for regulatory change
As awareness grows around the impact of carbon emissions and pressure builds from regulators, investors and increasingly, climate-conscious customers, governments are preparing the ground to make progress on compelling organisations to track their Scope 3 emissions, with additional ESG reporting requirements anticipated to be on the legislative agenda.
According to Deloitte, Scope 3 emissions can account for as much as 70% of an organisation’s carbon footprint, meaning that they – and the world – can only reach net-zero by taking huge strides to reduce their indirect emissions. This can be done firstly by accurately measuring and reporting on them, and then following this up by taking swift action to mitigate them.
Reporting is crucial, as you can only manage what you measure. However, reporting has historically been difficult and inconsistent because organisations are not in control of their indirect emissions and the relevant data is not always identifiable, measurable, or accessible. Moving forward, therefore, increasing reporting standards will aid businesses to work collaboratively with their data centre partners to accurately report on their carbon output and use that opportunity to spot areas where reductions can be made within the supply chain. Transparency and accountability will be key, with data centre operators poised to lead the charge.
Empowering customers to evolve
According to the IEA, data centres and data transmission networks are responsible for nearly 1% of all energy-related greenhouse gas (GHG) emissions globally. In recent years, carbon has become a proxy for risk, with GHG reports expected to come under greater scrutiny due to increasing governmental focus. It will soon become untenable for businesses to stay out of the ESG conversation.
Traditionally, customers have been anchored in their expectations of their data centre provision, but the world can simply no longer support requests for thousands of additional on-site diesel generators and scalability with fossil fuel solutions is no longer viable. Some customers, however, are becoming aware of the trajectory towards decarbonisation and looking to their colocation providers to offer guidance and support, as well as education on how to install their hardware with efficiency in mind, by only running the space they require, avoiding over-cooling and measuring their own PUE to track their progress.
In relation to their Scope 3 emissions, many customers are also now recognising the need to identify improvements in their supply chain and seeking partners with less carbon intensive solutions to help them meet their goals, having recognised the power their IT equipment consumes as part of their own energy footprint. Providers are well positioned, therefore, to purchase 100% clean energy at scale, in line with GHG reporting protocols, and provide it to clients as they need it – from a single rack to an entire data hall.
Prompted by the increasing human demand for more and better digitalisation, the anticipated growth in the data centre market will continue to spark conversations around the role of big tech in our societies. As sustainability and responsible technology usage continues to steer the agenda, it has become clear that we are now operating in a business landscape where adhering to ESG principles makes good business sense, as shifting cultural attitudes pave the way for regulatory change. Operators and customers alike should therefore look to the next year as an opportunity to future-proof their businesses and build strong, collaborative partnerships as the climate conversation continues.