If your local data center seems to be running a bit hotter than usual this month, it may be due to operators processing the data required for compliance with the European Union’s (EU) energy efficiency directive.
As of September 15, 2024, operators within the EU are mandated to provide information regarding energy performance and “water footprint” for sites with a capacity exceeding 500kW. This initiative aims to provide Brussels with insights into the characteristics of a “sustainable” data center, promoting grid decarbonization and improving the reuse of heat generated by these facilities.
Perspectives on these new regulations vary; some view them as a much-needed intervention, while others feel they’re overdue in addressing an ever-increasing energy demand. Data centers—including massive hyperscale facilities, colocation centers, and standard enterprise operations—are significant electricity consumers, yet their overall consumption share has remained stable over the past decades.
However, the International Energy Agency (IEA) forecasts a 4% rise in global electricity demand this year, marking the highest annual growth since 2007. The IEA underscores that data centers significantly contribute to this increase, estimating they currently account for nearly 3% of Europe’s electricity demand, a figure that is expected to grow substantially in both relative and absolute terms.
The emergence of artificial intelligence (AI) has heightened scrutiny on data center electricity consumption, making accurate assessment increasingly vital. The IEA notes that many regions’ historical estimates of energy use in data centers suffer from a lack of reliable data. It cautions, however, that future projections are fraught with uncertainties regarding AI’s deployment pace, its diverse applications, and potential energy efficiency improvements.
John Booth, managing director of consultancy Carbon3IT and a contributor to the European Code of Conduct for Data Centre Energy Efficiency, believes the sector has considerable work ahead. He points out that despite the Code’s existence for 15 years, its recommendations have been largely ignored. He anticipates that hyperscale providers and colocation operators will comply with the EU’s requirements for relevant data submissions.
Dave Smith, director of sustainability and operational risk at Digital Realty, adds that energy efficiency is already a priority for data center operators, and regulatory frameworks help to maintain this focus while driving innovation to achieve targets.
Addressing Challenges for On-Premise Centers
In contrast, organizations managing their own on-premise data centers may face tougher challenges. Smith notes that these organizations often struggle to stay informed and require significant assistance and education. Even major banks and large industrial firms may not be aware of the forthcoming regulations unless they are engaging their supply chains for equipment upgrades, which hinges on whether those suppliers are informed as well.
Booth warns of a broader sustainability issue in the data center sector, beyond just energy use. He highlights the massive quantities of concrete and steel employed in their construction, which contribute significantly to embodied carbon emissions, in addition to the energy consumed by operational equipment.
Moreover, he argues that much of this expenditure may be unnecessary. “We are likely over-engineering our data centers based on outdated American risk profiles from the late 1970s when the power grid was quite unstable,” he explains. This focus on redundancy, supported by backup diesel generators, was also adopted in the UK during the 1980s amid financial industry expansion.
IT managers have come to expect data centers to be excessively cooled and equipped with diesel backup systems. However, Shawn Novak, chief revenue officer at TECfusions, asserts this level of redundancy may not always be needed. At a sustainability session during the Datacloud Global Congress in June, he emphasized his firm’s focus on “adaptive reuse” of existing sites, highlighting that enhancing the efficiency of current facilities is both environmentally sound and offers a practical advantage, as these sites are already connected to power supplies—a significant hurdle in expanding capacity.
Novak also indicated that many of the investors driving the next generation of sustainable data centers come from the cryptocurrency sector, potentially reshaping design and construction practices in the future. “These crypto billionaires have experienced working in basic setups and may alter industry standards significantly,” he added.
Booth contrasts this evolving mindset with today’s conventional, over-engineered industry practices, asserting, “The crypto world has demonstrated resilience. The power grid is stable; such systems aren’t mission-critical. If one data center goes down, operations can transfer seamlessly to another.”
He also suggests reevaluating the very notion of uptime when assessing application stacks and underlying infrastructure. Most businesses find that only a few critical systems, such as electronic point-of-sale and logistics, justify Tier 3 categorization, as many tech leaders mistakenly classify too many applications there. “Could your less-critical applications withstand an outage? Storage issues can often be managed more flexibly,” he says.
Addressing Redundancies and Compliance Needs
Furthermore, organizations may be maintaining redundant or outdated applications or virtual machines, awaiting decisions about newer systems. Booth notes, “People often neglect the final stages of project evaluation, especially ‘lessons learned’ and decommissioning.”
All these elements are set against the backdrop of the EU, and other global regulators, increasing scrutiny of the data center industry. However, it may take time for significant changes to be enacted.
According to Booth, the new reporting requirements will provide the EU with its first accurate and comprehensive data on data center energy use, allowing them to conduct a thorough analysis. “I expect the actual figures will shock them—at the very least twice what they anticipated, possibly even four times. This could lead to serious concern among regulators.”
As the EU and other authorities gain insight, the potential for stricter regulations looms. Smith asserts that the manner of regulatory implementation will be crucial. “If regulations are overly complex or fragmented, they can burden operators, demanding increased staffing and training just to achieve compliance.”
Besides regulatory pressures, data center operators must also consider market dynamics, as the EU anticipates that disclosure of efficiency data will influence user choices regarding colocation and cloud services. In the long run, Booth warns, underperforming data centers could find themselves out of favor with clients, resulting in significant repercussions.