Regional inequalities in attracting foreign direct investment to the data centre industry persist - Jonathan Anstey

Data centres are incredibly energy-intensive operations prompting valid environmental concerns from many corners. However, their necessity has been a driving force behind innovations in renewable technology. The world’s escalating data processing requirements, coupled with the global push towards net zero emissions, have made sustainability a non-negotiable aspect of data centre operations.

Initiatives such as heat reuse, liquid immersion cooling, and advancements in Li-ion batteries showcase the industry’s commitment to eco-friendly practices.

Environment-first approaches and partnerships that are both cost-effective and commercially driven will allow for the sustainable growth of data centres, but a lot of work remains. Encouraging and incentivising data centres to run off renewable energy is paramount. Large corporations, including tech giants like Google, are increasingly prioritising environmental credentials. Initiatives like the Corporate Sustainability Reporting Directive (CSRD) intensify scrutiny of supply chains, making data centres central to the broader environmental agenda.

The recent acquisition of land in Essex by Google signifies a strategic move to expand data centre infrastructure in the region. As the demand for data continues to surge, regional growth presents a significant opportunity for the industry. However, it’s crucial to ensure that sustainability is not just an add-on but ingrained in the very fabric of building this infrastructure.

Yet, amidst the growth opportunities, regional inequalities in attracting foreign direct investment (FDI) to the data centre industry persist. It’s imperative to address this disparity to meet the escalating data demand effectively. Governments and industry stakeholders should collaborate to create policies that promote regional inclusivity.

By ensuring that sustainability is at the core of these regional expansions, we not only meet the immediate data needs but also contribute to a more balanced and resilient digital future. Essex’s journey in becoming a data hub sets the stage for other regions to follow suit.

A pivotal strategy for data centres in their journey towards net zero goals is the adoption of long-term Power Purchase Agreements (PPAs) as part of their energy procurement strategy. PPAs provide a robust framework for aligning energy consumption with renewable sources.

In essence, companies form agreements with energy providers to invest in specific renewable projects, ensuring a dedicated and equivalent amount of renewable-generated energy. Tailoring PPAs to project specifics, locations, and local energy market regulations allows data centres to procure renewable energy effectively, making PPAs integral to net zero strategies.

The insatiable demand for data presents immediate challenges for data centres. Meeting the ever-growing data requirements requires strategic foresight and innovative solutions.

Balancing energy procurement during operational ramp-up periods poses a strategic challenge. The delicate task of meeting growing energy demands without under or overcommitting requires expert guidance to ensure efficient and sustainable operations.

Looking ahead to the next 12-18 months, potential issues with capacity loom large. Pressing questions about energy availability and infrastructure resilience demand innovation, exploring energy storage solutions and investments in onsite energy generation.

One avenue of exploration is the continued advancement of energy storage solutions. Improved energy storage capabilities not only enhance the reliability and stability of data centre operations but also contribute to overall grid resilience.

While the commitment of individual businesses to sustainability is crucial, government support plays a vital role in facilitating a green transition. Policies that incentivise renewable energy adoption, promote energy efficiency, and provide financial support for sustainable initiatives can accelerate the industry’s sustainability journey. Collaboration between the public and private sectors is essential to create a conducive environment for sustainable practices.

Jonathan Anstey is head of sustainability at energy procurement specialists True.