Governments restrict data centers due to electricity – 02/14/2024 – Tech

Governments around the world are stepping up oversight over the construction of data centers due to fears that their huge energy consumption is putting excessive pressure on national climate goals and power grids.

Ireland, Germany, Singapore and China, as well as a US county and Amsterdam in the Netherlands, have introduced restrictions on new data centers in recent years to meet stricter environmental requirements.

The threat to new projects is greatest in Ireland, a hotspot for server farms built by cloud computing companies such as Google and Microsoft, due to its low tax rate and easy access to high-capacity submarine cables through which traffic global internet is broadcast.

A decision by the country’s energy and water regulator in 2021 to limit new data connections to the power grid is now having a “material impact at ground level”, said Hiral Patel, head of sustainable and thematic research at Barclays and lead author of a report on data centers.

Data center operators Vantage, EdgeConneX and Equinix had permissions for new projects in Dublin rejected by local authorities last year. Ireland’s data centers are expected to account for 32% of national electricity demand by 2026, the International Energy Agency predicted last month.

The environmental impact of data centers — huge facilities that house the servers that create the online storage of millions of people’s data — has become a growing issue around the world.

Loudoun County in the US state of Virginia and Germany recently imposed restrictions that include limiting permits for data centers in residential areas or requiring them to contribute renewable energy to the grid and reuse waste heat.

Analysts at Barclays warn that governments have not yet taken into account the effects of increased internet use on their power grids, with restrictions of similar “severity and frequency” expected elsewhere in the coming years.

This could put pressure on the US$220 billion (R$1.1 trillion) business of data center and cloud computing companies, which are expected to reach US$418 billion (R$2.1 trillion) by the end of the year. decade as global demand for data increases, according to market research group Industry ARC. Meanwhile, market research group Dell’Oro estimates that global capital spending on data centers will exceed US$500 billion by 2027.

Data center energy consumption is growing rapidly in the U.S., home to a third of the world’s 8,000 data centers, and in China, which has a tenth, according to the International Energy Agency. “We have a lot of power grids around the world that can’t handle these AI workloads,” Barclays’ Patel said. “It’s easier to talk about being green than actually being green.”

In the future, “data center operators and technology companies will have to play a more active role in the grid,” she added, for example by generating more renewable energy and working on energy efficiency measures.

Microsoft, Google and Amazon, the so-called hyperscalers behind some of the world’s largest data center complexes, have invested in wind and solar energy to achieve sustainability goals.

They are also turning to other energy sources. Microsoft said last year it would buy nuclear power to cover up to 35% of the energy needs of one of its data centers in Virginia when wind and solar power are not available. It has made a futuristic bet on nuclear fusion energy, produced using the same reaction that powers the sun, by signing a power purchase agreement with private US company Helion.

Replacing the diesel that typically powers data center backup generators is another challenge. Amazon plans to switch to biofuel made from waste oils for its backup generators at all of its data centers in Europe, starting with those located in Ireland and Sweden.

Globally, electricity consumption from data centers, cryptocurrencies and artificial intelligence could double between 2022 and 2026, the IEA said last month. Analysts at Morgan Stanley expect generative AI to drive more than three-quarters of global data center energy demand by 2027, based on 2022 numbers.

Data center operators are under pressure to show regulators that they are controlling energy demand, not just greening the supply. Christopher Wellise, head of sustainability at global data center operator Equinix, said the company engages with governments around the world to manage energy use. “Wherever you have large amounts of expansion and growth, that attracts a certain amount of attention.”

Google has been testing ways to reduce the power consumption of its data centers when the power grids they rely on face capacity constraints, including during heat waves and winter storms in Oregon, Nebraska and the southeastern US. One example is delaying non-urgent computing tasks, such as updating vocabulary in your translation tool or moving them to data centers in other locations.

In London, a data center working group was created to coordinate energy responses and planning across the capital, following signs in 2022 that the growth of data centers close to fiber optic cable installations was putting pressure on availability of electricity for homes.

Continuing to attract data centers will be crucial for the UK capital “to remain and expand as a global technology hub and for the adoption of emerging technologies and AI”, said Theo Blackwell, who works for London City Council as chief digital officer.

However, “planners are concerned with questions of urban design; for example, how does it [o centro de dados] fits the locality and externalities, such as energy consumption”.