![Data centre rollout under fire due to growing pressure on electricity grids](https://skynews.icu/wp-content/uploads/2024/02/Data-centre-rollout-under-fire-due-to-growing-pressure-on-electricity-grids.png)
Governments around the world are intensifying scrutiny on the building of data centres over fears that their huge energy usage is putting excessive pressure on national climate targets and electricity grids.
Ireland, Germany, Singapore and China as well as a US county and Amsterdam in the Netherlands have introduced restrictions on new data centres in recent years to comply with more stringent environmental requirements.
The threat to new projects is highest in Ireland, a hotspot for server farms built by cloud computing companies such as Google and Microsoft, because of its low tax rate and easy access to high-capacity subsea cables through which global internet traffic is run.
A decision by the country’s energy and water regulator in 2021 to limit new data connections to the electricity grid is now having a “material impact at the ground level”, said Hiral Patel, head of sustainable and thematic research at Barclays and lead author of a report on data centres.
Data centre operators Vantage, EdgeConneX and Equinix had permits for new projects in Dublin rejected by local authorities last year. Ireland’s data centres are set to account for 32 per cent of national electricity demand in 2026, the International Energy Agency forecast last month.
The environmental impact of data centres — huge facilities that hold the servers that create the online storage for the data of millions — has become a growing issue around the world.
Loudoun County in the US state of Virginia, and Germany have recently introduced curbs that include limiting permits for data centres in residential areas, or requiring them to contribute renewable energy to the grid and reuse waste heat.
![Bar chart of Percentage of metered electricity consumed by data centres showing Data centres make up close to a fifth of Ireland's electricity consumption](https://skynews.icu/wp-content/uploads/2024/02/Data-centre-rollout-under-fire-due-to-growing-pressure-on.png)
Analysts at Barclays warn that governments have yet to take into account the effects of growing Internet use on their electricity grids, with curbs of similar “severity and frequency” expected elsewhere in coming years.
This could put pressure on the $220bn business of data centre and cloud companies, expected to rise to $418bn by the end of the decade as global data demands surge, according to market research group Industry ARC. Market research group Dell’Oro meanwhile estimates global capital expenditure on data centres to exceed $500bn in 2027.
Energy use from data centres is growing rapidly in the US, home to a third of the world’s 8,000 data centres, and in China, which has a tenth, according to the IEA. “We have many grids around the world that cannot handle these AI [driven] workloads,” Barclays’ Patel said. “It’s easier said than done being green.”
In future “data centre operators and tech companies will have to play a more active role in the grid”, she added, for example by generating more renewable energy and working on energy efficiency measures.
Microsoft, Google and Amazon, the so-called hyperscalers behind some of the world’s largest data centre complexes, have been investing in wind and solar energy to meet sustainability targets.
They are also turning to other energy sources. Microsoft said last year it would buy nuclear power to cover up to 35 per cent of the energy needs of one of its Virginia data centres, when wind and solar power is not available. It made a futuristic bet on nuclear fusion power, produced using the same reaction that powers the sun, by signing a power purchase agreement with private US company Helion.
![Column chart of Estimate of data centres' electricity consumption in 2022 and 2026 (TWh) showing Data centres' energy needs are set to rise sharply in key regions](https://skynews.icu/wp-content/uploads/2024/02/1707741637_27_Data-centre-rollout-under-fire-due-to-growing-pressure-on.png)
Displacing the diesel fuels that typically power data centre back-up generators is another challenge. Amazon plans to switch to biofuel made from waste oils for its back-up generators at all its data centres in Europe, starting with sites in Ireland and Sweden.
Globally, electricity consumption from data centres, cryptocurrencies and artificial intelligence could double between 2022 and 2026, the IEA also said last month. Morgan Stanley analysts expect generative AI to drive more than three-quarters of global data centre power demands in 2027, based on 2022 numbers.
Data centre operators are under pressure to show regulators they are tempering energy demand, not just making the supply greener. Christopher Wellise, head of sustainability at the global data centre operator Equinix, said the company engages with governments around the world about managing energy usage. “Anywhere you’ve got huge amounts of expansion and growth, it attracts a certain amount of attention.”
Google has been piloting ways to reduce energy usage from its data centres when electricity grids they rely on face capacity constraints, including during heatwaves and winter storms in Oregon, Nebraska, and the south-east of the US. An example is to delay non-urgent computing tasks such as updating the vocabulary in its Translate tool, or handing them over to data centres in other locations.
In London, a data centre task force has been set up to co-ordinate energy and planning responses across the capital, following signs in 2022 that the growth in data centres near fibre optic cable installations was putting pressure on the availability of electricity for homes.
Continuing to attract data centres will be crucial to the UK capital “remaining and expanding as a global tech hub, and to the adoption of emerging technologies and AI”, said Theo Blackwell, who works for the Mayor of London as the city’s chief digital officer.
Nonetheless, “planners are concerned with urban design issues, how it [the data centre] fits into the locality . . . and externalities such as power consumption.”
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