Data centres: Seeking sustainability

Between 2010 and 2020, global internet penetration more than doubled and web traffic grew 12-fold. Soaring data accumulation – spurred by the internet of things, augmented reality, and blockchain – has created unprecedented demand for data centres. Real estate services manager Savills expects the industry to grow 4.5% a year through 2026, reaching USD 251bn in value.

There is an environmental cost to this expansion. Data centres now account for around 4% of global greenhouse gas emissions and the energy they consume doubles every four years. From commodities miners that store information in the cloud to bitcoin miners running servers for digital validation, data centres represent a mounting sustainability concern.

In a recent survey of Asia Pacific data centre managers conducted by JLL, another real estate services manager, 85% of respondents said that sustainability adoption will significantly impact operations and business decision-making. However, only just over one-quarter claimed sufficient visibility of energy utilisation to implement transformative changes.

“A lot of investors see data centres as property assets, but I think they have it very, very wrong,” said Ray Fung, a managing partner at Albamen Capital, which invests in renewable energy and digital infrastructure in China.

“The biggest cost to running a data centre is power. You should think of them like power stations – you get a piece of land, talk to grid operators about connections, build something, and do project management. There is a 70-80% skillset overlap between data centres and renewables.”

Data centres bring together elements of property, power, and telecom. Chris Street, a managing director and head of data centres in Asia Pacific for JLL, describes them as “special purpose facilities that have a unique use case and require a technical approach.” However, energy density and network connectivity are what ultimately set them apart.

Operators must be mindful of how much energy they consume and where it comes from, but the reality of Asia is that access to renewables is limited. “Site locations that could be directly serviced by renewable energy are almost non-existent,” Street added. “Being able to collocate the two would be a boon to both industries, but there are characteristics to data centres that make that difficult.”

A matter of sourcing

This observation resonates with Princeton Digital Group (PDG), which has 20 hyperscale data centres – half of them still under development – with 600 megawatts of secured capacity across 14 cities in China, India, Indonesia, Japan, and Singapore. Founded in 2017, PDG has raised more than USD 1bn from the likes of Mubadala Investment, Warburg Pincus, and Ontario Teachers’ Pension Plan.

The presence of global investors, as well as a customer base featuring market-leading technology companies, meant that climate change was on the agenda from the outset, according to Pritimukta Sarangi, PDG’s head of sustainability. Energy consumption and carbon emissions are both tracked – they came to 154,846-megawatt hours and 92,541 tonnes of carbon dioxide equivalent in 2021.

Energy efficiency is recorded through power usage efficiency (PUE), or the ratio of energy used by IT equipment in a data centre to that used by the entire data centre. The more efficient the facility, the lower the PUE. The company’s 2021 sustainability report gives PUEs for seven data centres, ranging from 1.34 in Shanghai to 1.95 in Indonesia. Upcoming greenfield projects have target PUE of 1.2-1.4.

PDG has committed to powering all its data centres using renewable energy by 2030. Even though the company takes a green-first approach to site selection by prioritising locations with renewable energy sources nearby, this is seldom straightforward.

"Other pieces of the puzzle such as driving operational efficiency through design and operations remain in our hands but being able to procure renewable energy across all markets is the difficult thing right now,” said Sarangi. “It does vary between geographies. In some markets, you could be sourcing on-site or procuring from the grid through a power purchase agreement. In other markets, this may not be possible, and credits may be the option to pursue.”

In Indonesia, for example, PDG finds direct procurement difficult, so it buys renewable energy certificates (RECs) from local green energy projects such as geothermal plants. On the other hand, a 48 MW project due to come online in India by the end of the year will source approximately 40% of its power from renewable sources.

"There is a difference between acquiring assets and greenfield developments,” Sarangi added. “Some of the assets in our portfolio are acquired, so it can be challenging to replace the energy supply. In our new data centre in India, we can procure green power. It is also located in the data centre alley of Mumbai. We didn’t have to compromise in that sense.”

Part of Albamen’s value proposition when it pitches for local government approvals for new data centres is that it will build renewable capacity on-site, making projects net-zero from day one. Fung is a strong advocate of co-location, so data centres can trade power in the local market and reduce the risk of having regulators or local grid operators restrict supply.

“If the grid chooses to curtail you, then you would be in desperate mode, maybe even burning diesel to support your data centres, despite the high cost,” he said. “Having the ability to trade is important as well, but if your renewable assets are in Xinjiang and your data centre is in Beijing, that’s too far. The two markets are unrelated and cannot trade.”

To illustrate the headaches of distance in China, Fung compares energy transportation to trucking. Moving goods from Xinjiang to Beijing means crossing several provinces and travelling on many different toll roads. Beijing might issue regulatory guidance, but each province or region has its own implementation rules and quotas.

Efficiency through technology

Renewable energy is one of four pillars that underpin PDG’s approach to sustainability, alongside certification, energy efficiency, and technology and innovation.

Certification involves securing recognition under Leadership in Energy & Environmental Design (LEED), a US-developed green building rating system, as well as under Singapore’s BCA Green Mark Platinum and India’s IGBC Platinum. The company is also participating in the Open Compute Project, which aims to identify the most efficient designs for sustainable scalable computing.

Energy efficiency and the adoption of technology, meanwhile, largely go together. Sarangi cites an International Energy Agency (EIA) study that found improvements in energy efficiency led to data centre energy consumption only increasing 10% between 2010 and 2020, despite the huge increase in traffic. During this period, the data centre share of global electricity use remained flat at 1%.

This has been achieved in part through the introduction of larger hyperscale data centres, which have a lower energy consumption per square metre. However, various operational levers can be pulled as well, such as reducing the space in between servers to make cooling more efficient and positioning electricity sources closer to data halls to minimise distribution losses.

The JLL survey found that, by the end of next year, 50% of Asia data centre operators plan to implement cooling-control designs that are automated and guided by artificial intelligence (AI). Google is among the leaders in this area with AI-controlled technology that saves up to 40% of a facility cooling system’s total energy use.

“Being able to control and moderate the amount of energy being used in the mechanical systems supporting the cooling of the data centre is the biggest area of concern for most facility operators as this will have the largest impact on your energy efficiency metrics,” said JLL’s Street.

He also highlights the ability to lower the energy consumption of IT equipment – which would contribute to lower PUE – and to auto-regulate system components.

Other technology solutions under consideration by data centre operators include cold plate liquid cooling, hot aisle-cold aisle layouts, close-coupled cooling, rainwater harvesting systems, fuel cells for energy storage, and levelling out peaks in electricity use – a process known as peak shaving – through battery-based uninterrupted power supply (UPS) systems.

PDG is exploring how energy storage can ease pressure on local grids and offer greater stability of supply. It also expects to use more AI-enabled equipment, for example, sensor systems that automatically adjust the speed of fans in accordance with peaks and troughs in data centre activity.

Sarangi notes that it will take time for the sustainability initiatives to be reflected in PUE because data centres require 12-18 months to achieve operational stability. Meanwhile, she is hopeful that more energy sourcing options will materialise: “All these markets in Asia are developing. I think we will see major changes over the next couple of years with more renewables becoming available.”

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