Demand for data centres is soaring, driven by AI and other data-intensive technologies. While data centres are crucial for the digital economy, they are also major energy consumers.
This poses a dilemma: in a fossil-fuel dominated world, how can operators meet the growing digital demand without compromising on sustainability targets set to address climate change?
The International Energy Agency (IEA) projects that the global electricity demand of data centres will more than double by 2026, from 460 terawatt-hours (TWh) to up to 1,000 TWh.
Much of this increase stems from the energy-intensive nature of AI. For example, a single AI query can consume 2.9 watt-hours (Wh), about 10 times more than a standard Google search.
This surge in energy demand makes it critical for data centres to rely on renewable energy sources, rather than carbon-intensive fuels. The challenge lies in balancing the growing demand with the availability of green energy from power generation providers, ensuring that this doesn’t place undue strain on the energy grid.
Woefully short in tapping renewables
Despite efforts, achieving widespread adoption of renewable energy remains a challenge. Some regions are making strides, while others lag behind, creating disparities that undermine sustainability goals. For instance, the EU’s target to ensure 42.5% of energy comes from renewable sources still falls short of addressing the demands of the digital age.
This gap between political ambition and technological infrastructure is a key hurdle in mitigating climate change.
Data centres are central to this energy dilemma. They are also in a unique position to become proactive players in the energy transition. The real issue isn’t just the power consumption of data centres but the broader need for clean energy expansion to support the design of AI-driven data centres.
Data centres reflect the need for more investment in renewable energy sources.
As data centres grow more integral to the economy, their energy consumption risks overwhelming the grid’s ability to provide sustainable power. Grid stabilisation becomes a critical concern, especially in regions where renewable energy is scarce or where grid infrastructure is outdated.
Countries like Ireland and the Netherlands are already experiencing strains on their grids, leading to moratoriums on new developments. In contrast, Nordic countries such as Iceland, Sweden, and Finland are emerging as sustainable data centre hubs due to their abundant renewable energy and favourable climate conditions.
Green power must come to the fore
This shift, while beneficial, highlights the digital economy’s dependence on stable green power. The pace of renewable energy expansion isn’t keeping up with the demand, posing risks to economic growth.
Despite their high energy consumption, data centres have the potential to support the energy transition. Technologies such as demand response and battery energy storage systems (BESS) enable data centres to help stabilise the grid. Additionally, the industry is increasingly investing in green power through power purchase agreements (PPAs) for renewable energy, helping to decarbonise the grid.
This commitment is vital, as data centres have the power to drive a broader transition to clean energy.
However, the industry’s focus on improving efficiency doesn’t fully address its reliance on non-renewable power sources. Traditional metrics like power usage effectiveness (PUE) are no longer sufficient, as they don’t account for the proportion of green power used.
To truly advance sustainability, the industry must adopt new metrics that consider the entire lifecycle of energy use, emphasising clean energy consumption.
Government action is crucial to overcoming these challenges. Policymakers must create environments that encourage the adoption of green power, modernise the grid, and support on-site sustainable energy generation.
Without such efforts, the transition to clean energy could stall, with severe environmental and economic consequences.
Significant political, regulatory, and economic barriers remain in the way of widespread adoption of green power. Addressing these requires collaboration between governments, industry leaders, and energy providers. Only through coordinated action can data centres operate sustainably without slowing digital growth.
The stakes are high.
Failure to address the energy challenges of data centres could have serious global consequences. It’s vital that all stakeholders work together to ensure data centres are part of the solution. By shifting focus from internal operations to a broader, grid-level perspective, we can build a greener, more sustainable future.
