Decarbonizing Data Centers: The Energy-Intensive Hubs of the Digital World

Data centers are the heart of the telecommunications value chain. They store, process, and manage the vast amounts of data needed for cloud computing, Internet of Things (IoT) applications, and artificial intelligence (AI). As the industry expands, so does the energy demand of data centers, driving a rise in emissions.

Energy Demands of Cloud, Data and AI

Cloud computing, big data and AI are major drivers of electricity use in the telco industry. As companies expand cloud services to meet demand, they must build and scale data center infrastructure, which requires significant power for computing and cooling.

IoT networks and AI workloads add to this demand. Machine learning, used to optimize performance and customer service, consumes large amounts of processing power. The energy impact of data centers supporting AI is expected to rise quickly.

Today, data centers account for about 1.5% of global energy use, a share that may double by 2026. By then, data centers could consume as much electricity as Japan does today. According to Scientific American, Energy usage from generative AI alone is projected to increase tenfold between 2023 and 2026.

Real Estate and its Carbon Footprint

Real estate choices also affect the carbon profile of data centers. Facilities consume high levels of electricity for equipment, cooling and uptime. If located in regions dependent on fossil fuels, emissions are even higher.

Choosing sites without access to renewable energy increases Scope 1 and Scope 2 emissions. Real estate decisions that do not prioritize energy efficiency or sustainable building materials also add to emissions.

Developers benefited for years from rising demand for co-location space but the market is tightening. Shortages and price pressures are becoming common. A JLL report highlights this growing global demand.

Decarbonization Efforts

Data centers operators face increasing demands for regulatory compliance, sustainability, and investor and consumer confidence. As the industry faces increasing pressure to decarbonize, integrated strategies are critical to reducing a company’s carbon footprint. The right combination of solutions highlights opportunities for a multi-faceted approach to decarbonization, combining energy-efficient technologies, renewable energy procurement, and strategic partnerships to minimize the environmental impact of data center operations.

• Enhancing Energy Efficiency: Data centers, which are highly energy-intensive, can reduce power consumption by implementing AI-driven optimization and smart cooling systems. These technologies can significantly decrease energy demand and improve network performance, helping to minimize operational emissions, especially as AI workloads grow.
• Sourcing Renewable Electricity: Operators can further reduce emissions by sourcing renewable energy through Energy Attribute Certificates (EACs), Power Purchase Agreements (PPAs), or Virtual Power Purchase Agreements (VPPAs). These mechanisms allow the industry to green their electricity consumption and lower their carbon footprint.
• Exploring Renewable Natural Gas Options: Renewable Natural Gas (RNG) presents another opportunity to decarbonize operations where direct renewable energy options are unavailable. Where renewable energy is limited, such as in cities like Singapore, alternative forms of RNG, like BioLNG (liquefied biomethane), are being considered to power data centers.
• Backup Generators and Biofuels: To maintain sustainability during power outages, data centers can use Hydrotreated Vegetable Oil (HVO), biodiesel, and other biofuels for their backup generators, helping to minimize Scope 1 emissions while maintaining reliability.
• Supplier Engagement: For companies that contract third party data centers, it is crucial to address Scope 3 emissions. By encouraging vendors to adopt green energy solutions and set science-based targets, companies can work to decarbonize their entire value chain, contributing to the overall reduction of emissions.
• Compensating Residual Emissions: For unavoidable emissions, such as those from equipment manufacturing or third-party services, data center operators can purchase carbon credits to neutralize residual carbon and achieve net-zero goals.

Balancing uptime and low-carbon goals is challenging but achievable. With targeted strategies, data centers can significantly reduce their footprint.

At STRIVE by STX, we help companies decarbonize with solutions tailored to their needs. Get in touch to explore how we can support your business.

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