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It looks like 2023 will be an interesting year for our sector with some old and some new challenges and opportunities.
It seems that despite concerns around recent global events and the subsequent inflationary pressure on power, materials and labour costs, there has been no adverse effect on growth in the data centre sector which continues to remain buoyant. The demand is still growing and shows no sign of stopping – but this brings its own challenges.
Costs will drive Standardisation
With further rising inflationary pressures forecast, it seems inevitable that prices will have to rise to cover costs. This is in part due to adverse developments on the gas market, the risk of shortages and the impact on energy costs, especially in the winter of 2022-23. We are also seeing the need for tight cost management driving standardisation which is ranging from modular components, such as power and cooling modules and skids, to full-fledged prefabricated facilities. I believe that this will become the default approach not just for the enterprise, but also hyperscale and the edge of the network.
The geo-political uncertainty has forced governments across EMEA to acknowledge that they can no longer rely on traditional energy sources so the drive for energy autonomy through renewable/green sources will accelerate as there is no choice if economies are to grow.
Replacements for diesel such as HVO will continue at a pace as will investment in alternatives in back-up systems such as hydrogen cells. The increase in high density computing will necessitate liquid cooling systems on high density racks as it is 3000 times more efficient than air; and the recovery of waste heat for the use of community projects/district heating schemes will increasingly become the norm as the whole field of energy storage develops at a pace including grid scale and flow batteries to make the most of renewable energy sources. We will also see AI and automation will be used in controlling environments to increase efficiencies in power usage.
Self-Regulation or Regulation
There is no doubt that a positive impact of rising costs is the acceleration of the uptake of alternative power sources and ever more efficient design solutions. The average hyperscale facility consumes 20-50MW annually, theoretically enough electricity to power up to 37,000 homes. Something must change but can the industry be ‘trusted’ to do this?
With ambitious targets to be achieved by 2025 and 2030 under the green deal, it begs the question that if our sector doesn’t get ahead of these targets, will the self-regulatory initiative become legislative and regulated? Our sector is at a crossroads with one route being proactive, investing in new technologies, self-generation and looking at innovative storage solutions to reach climate neutral targets. The other route is having legislation and regulation imposed on us and having to react to the imposition of energy, water and emission targets that we have no influence over.
I believe some form of regulation will be inevitable and we are seeing soft regulation on a day-to-day basis through planning, permitting and power availability. The industry will continue to take steps to self-monitor and moderate – including an increasing preference for environmentally-friendly thermal designs, but I fear the year will also see increase in regulatory oversight.