Skip to content Skip to footer

Four data centre predictions for 2023

Image: Adobe Stock / Treecha

At the forefront of the digitalisation age and the human need for stronger, faster connections to each other and our communities, data centres occupy a crossroads in today’s interconnected world.

With the market set to continue its expansion in 2023, with growth of 7.5% predicted and an accumulated value of $200 billion by 2032, the prevalence of data centres in the efficient running of our cities and communities will only expand – along with their impact on the environment.

In 2023, operators and customers will be focusing their efforts, considering decarbonisation targets, supply chain instability and the energy crisis. From operational resilience in the face of global energy scarcity and the anticipation of increased ESG regulations, to climate-conscious attitudes leading business priorities and community-led big-tech activism – these are the top four data centre trends of 2023.

1. Sustainable by design: building resilient data centres

This year has witnessed the impact of an energy crisis that has hit individuals and businesses alike. Concerning geo-political events and the scarcity and soaring cost of fossil fuels, alongside the increase of climate events, has proven the need for investment in carbon free energy to avoid future energy crises and mitigate climate change. For data centre providers, these events have added weight to the need to transition from being carbon-intensive and part of the mass-consumption of natural resources, to carbon neutral and sustainable by design.

According to guidance outlined by the UN’s Sustainable Development Goals (UNSDG) on future construction, the builders of new data centres must be responsible when it comes to extracting natural resources, both directly and indirectly and aim to power facilities with energy from 100% carbon free sources. Designers must seek ways to better manage waste streams and optimise asset and resource lifecycles by transitioning away from single use designs, towards a model of recycling, reusing, and remanufacturing – thereby eliminating landfill impact and creating a perpetual lifecycle for materials and equipment.

Energy efficiency reflects  good design and many of the newest and most energy-efficient builds in the colocation industry are committed to the BREEAM green building standards. Signatories to the Climate Neutral Data Centre Pact, for example, have made clear commitments to achieving low Power Usage Effectiveness (PUE), responsible water usage, and repurposing waste heat.

Furthermore, many data centres are now designing a modular approach to manage megawatt scale growth with the intention of avoiding over-provisioning. Operators should  consider the Total Cost of Ownership (TCO) beyond the business cost per megawatt installed and rethink the status quo. They have an opportunity to carry forward the momentum that global challenges have inspired and take a holistic view of the wider impact of their data centre construction and operations. When the energy supply chain is unreliable, building sustainability into the data centre by design is a shortcut to ensuring long-term resilience.

2. The future of data centre power

Data centres are some of the biggest energy buyers in infrastructure and following the ongoing disruption of traditional energy supply lines, it is critical that the sector works collaboratively to decarbonise the international grids. Many data centre providers are well on the way to reducing demand for fossil fuels by covering 100% of their annual electricity consumption with renewable energy purchases. Some, including Iron Mountain Data Centres, have taken decarbonisation even further, by committing to match their energy consumption with local, clean energy every day by 2040. Meanwhile, investment in research for alternative energy sources to provide backup power in case of outage will increase, with recent testing of hydrogen fuel cell systems achieving positive results.

Hydrogen will play a role in our carbon neutral energy future, but with around 99% of hydrogen still derived from fossil fuels according to the International Energy Agency (IEA) and the capacity of on-site energy storage a challenge, work must be done to develop clean hydrogen alternatives, so that reliance on backup diesel generators can be phased out completely.

Luckily, hydrogen can be produced from various clean energy sources like electrolysis powered by wind and solar, so if the will remains to develop green hydrogen as a carbon-free alternative, the industry must find itself inevitably moving towards that goal. Crucially, regulation can accelerate this journey by incentivising proper tracking and certification of where green hydrogen has been sourced from.

3. Prepare for regulatory change

As awareness around decarbonisation grows and pressure builds from regulators, investors and customers, governments prepare to compel organisations to track their Scope 3 emissions, with additional ESG reporting requirements anticipated to be on the legislative agenda. The US Securities and Exchange Commission (SEC) proposed new amendments requiring businesses to submit data on their Scope 3 emissions regularly. In the UK and EU, governments are expanding existing programmes, placing stricter demands on companies required to report their emissions data.

According to Deloitte, Scope 3 emissions can account for as much as 70% of an organisation’s carbon footprint, meaning that net-zero can only be achieved by significantly reducing indirect emissions, using accurate measuring and reporting to track progress. Reporting is crucial, as you can only manage what you measure. However, reporting has historically been difficult and inconsistent because organisations lack control over their indirect emissions and relevant data is not always identifiable, measurable, or accessible. Therefore, increasing reporting standards will aid businesses to work collaboratively with their data centre partners to accurately report on their carbon output and make reductions within the supply chain. Transparency and accountability will be key, with data centre operators poised to lead.

4. Empowering customers to evolve

According to the IEA, data centres and data transmission networks are responsible for nearly 1% of all energy-related greenhouse gas (GHG) emissions globally. Recently, carbon has become a proxy for risk, with GHG reports expected to be significantly scrutinised due to increasing governmental focus. Soon, staying out the ESG conversation will be untenable for businesses.

Traditionally, customers have had unwavering expectations of their data centre provision, but the world can no longer support requests for additional on-site diesel generators and scalability with fossil fuel solutions is unfeasible. Some customers, however, are becoming aware of the trajectory towards decarbonisation and looking to their colocation providers for guidance, as well as education on how to efficiently install their hardware by only running the required space, avoiding over-cooling and measuring their own PUE to track progress.

Many customers are recognising the need to identify improvements in their supply chain to cut Scope 3s and seeking partners with less carbon intensive solutions to achieve their goals, having recognised the power their IT equipment consumes as part of their own energy footprint. Providers are well positioned, therefore, to purchase 100% clean energy at scale, in line with GHG reporting protocols, and provide it to clients as necessary – from a single rack to an entire data hall.

Prompted by the increasing human demand for digitalisation, the growth of the data centre market will spark conversations around big tech’s role in our societies. As sustainability and responsible technology usage steers the agenda, we are now operating in a business landscape where adhering to ESG principles makes good business sense, as shifting cultural attitudes pave the way for regulatory change. Operators and customers alike should look to the opportunities 2023 brings, to future-proof their businesses and build strong, collaborative partnerships as the climate conversation continues.

Chris Pennington
Chris Pennington
Director of Energy and Sustainability at Iron Mountain

You may also like

Stay In The Know

Get the Data Centre Review Newsletter direct to your inbox.