Data centres: the challenge of meeting soaring energy demands sustainably  

The digital economy is driving unprecedented growth in the demand for data centres. The term 'data centres' refers to energy-intensive facilities housing computing infrastructure that supports everything from artificial intelligence to communications and e-commerce. Data centres are currently estimated to account for 3-4% of the UK's total electricity usage, but this figure is expected to rise sharply due to the increasing adoption of data-driven technologies and business models. The National Grid's CEO predicted last year that the power consumed by data centres in the UK would increase six-fold by 2035. This surge in demand for data centres brings with it a key challenge: how can the UK meet the energy needs of these facilities in a way that is both reliable and sustainable?

Fossil fuels have traditionally been relied on for the supply of electricity to data centres. However, the climate emergency and the requirement for the UK to achieve Net Zero by 2050 means that a transition to clean energy is now more urgent than ever.

So, what are some of the options for powering data centres sustainably?

• On-site renewable generation: Installing solar panels or wind turbines on-site can reduce dependence on the grid, potentially reducing energy costs (especially at peak demand times when electricity prices are higher). 

• Energy storage solutions: This includes battery energy storage systems that can be integrated with on-site renewable generation technologies to mitigate intermittency issues by storing excess energy for use when renewable energy generation is low. This can significantly reduce, and even avoid, the need for data centres to use fossil-fuel-powered backup generators.

• Power Purchase Agreements (PPAs): Data centre owners can enter long-term contracts with renewable energy generators for the supply of electricity from renewable sources. PPAs can bring the dual benefit of reducing a data centre's carbon emissions as well as bringing price security, without the need for the data centre owner to incur the initial capital expenditure required to invest in on-site generation technologies. We are seeing a trend towards data centre owners increasingly engaging with the PPA market to secure their energy from renewable sources.
  
  
  • Where the data centre is situated near to a generation station, a private wire PPA could be used, whereby the electricity is physically delivered from the generator's site to the data centre. This approach has the advantage of addressing transmission grid congestion concerns.  
    
    
  • Where the data centre is not in proximity to a generating station, a sleeved PPA structure can be adopted. This involves a licensed supplier acting as an intermediary to facilitate the delivery of electricity by 'sleeving' the electricity produced by the renewable generator via the grid. While this is a more complicated structure, it does have the benefit of 'smoothing' out the intermittency of renewable energy generation.
    
    
• Microgrids: This term refers to localised electricity networks that can be connected to the grid or operate independently ("island mode"). Renewable generation technologies can be integrated into a microgrid system together with energy storage solutions. The ability of microgrids to operate independently from the grid improves their reliability, as well as potentially bringing cost savings if expensive external power sources do not need to be relied on. When connected to the grid, microgrids can exchange energy during times of shortage or excess. Optimisation and management software can also be deployed to allow microgrids to align energy production with the data centre's consumption patterns to improve efficiency.

• Small modular nuclear reactors (SMRs): Nuclear power offers a consistent, low-carbon form of energy. SMRs have a shorter construction time than large-scale nuclear plants and have a much lower initial capital cost. Their innovative design, which uses high-temperature gas or molten salt instead of relying on water for neutron moderation and cooling, enhances safety and efficiency. Additionally, they require much less space than large-scale nuclear plants. SMRs could potentially be deployed in clusters, near to clusters of data centres. Tech companies have been exploring SMRs as a solution to power their data centres. For example, Google recently signed a deal with Kairos Power to purchase power produced by six to seven SMRs, the first of which is expected to be deployed by 2030.

• Energy efficiency measures: It is hoped that innovations in cooling technology will significantly reduce the amount of energy needed to cool data centres. Traditionally, air conditioning has been used to cool data centres, but the industry is exploring liquid cooling as well as opportunities to use outside air in cooler climates.

Other technologies that could generate efficiencies include:

• Power management systems, which make adjustments based on real-time demand to optimise energy use.
• Data centre virtualisation, which involves consolidating multiple servers onto fewer machines to maximise utilisation and reduce energy waste.

It is likely that a combination of the above technologies and solutions will be required to sustainably meet the energy demands of data centres.

How can we help?

Our team has significant experience supporting a wide range of contracts for the adoption of clean energy solutions. If you are considering any of the options discussed in this article for sustainably powering data centres, please get in touch with our team who would be happy to discuss your proposed arrangements and support you with the agreements that you require.