Better partners, better world: four data centre predictions for 2023 

At the forefront of the human need for stronger, faster connections, data centres occupy a crossroads in today’s interconnected world. With the market set for a value of $200 billion by 2032, the prevalence of data centres in the efficient running of our society is likely to expand too – along with the impact they have on the environment.  

From operational resilience in the face of global energy scarcity, to a climate-first culture in the boardroom – below are the top four data centre trends of 2023 that industry players must be cognisant of.  

1.     Sustainable by design: Building resilient data centres  

2022 saw fossil fuel prices rise alongside the frequency of damaging climate episodes, proving the need for investment in carbon free energy for future security. For data centre providers, these events have ensured the need to transition from being a carbon-intensive industry, to a carbon neutral one that is sustainable by design.  

The UN’s Sustainable Development Goals on future construction states that builders of new data centres must be responsible when it comes to extracting natural resources, aiming to power facilities with 100% carbon free energy. Designers must also transition from single-use design to processes that encapsulate recycling, reuse and remanufacture to avoid landfill. 

Energy efficiency is a function of good design and many of the most energy-efficient builds in colocation are committed to the BREEAM green building standards. Signatories, including Iron Mountain, to the Climate Neutral Data Centre Pact, have made clear commitments to achieving low Power Usage Effectiveness (PUE), responsible water usage, and repurposing waste heat. By building sustainability into data centre design, organisations can help ensure long-term resilience when facing volatile supply chains. 

2.     The future of data centre power 

Data centres are some of the biggest energy buyers in infrastructure and so it is critical that the sector works collaboratively to decarbonize international grids. Many data centre providers are already covering 100% of their electricity consumption with renewable purchases, with some, including Iron Mountain Data Centres, committing to 24/7 renewable energy by matching their energy consumption with local renewables each hour of every day by 2040.

Hydrogen will also play a role in our carbon neutral energy future. Yet with 99% of hydrogen still derived from fossil fuels according to the International Energy Agency (IEA) and on-site energy storage remaining a challenge from a capacity perspective, reliance on backup diesel generators still cannot be phased out completely.  

Electrolysis powered by renewables can however provide a clean source of hydrogen generation, providing a path to carbon-free green hydrogen. Regulation also has a role to play in this journey by incentivizing proper tracking and certification of where green hydrogen has been sourced.  

3.     Prepare for regulatory change 

Pushed by increasingly climate-conscious stakeholders, governments are beginning to compel organisations to track their Scope 3 emissions, which Deloitte suggests can account for as much as 70% of a firm’s total carbon footprint. In 2022, the U.S. Securities and Exchange Commission (SEC) proposed new amendments requiring many US companies to submit data on their Scope 3 emissions regularly. In the UK and EU, governments are expanding existing programmes to place stricter demands on companies reporting their emissions data. 

To tackle Scope 3’s carbon impact, reporting will be crucial – you can only manage what you measure. However, reporting has historically been difficult as organisations are not in control of their indirect emissions. As key partners in the supply chain of some of the world’s largest businesses, data centres should work transparently with their partners to accurately report on their carbon output and identify areas where reductions can be made within the supply chain.

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. In recent years, carbon has become a proxy for risk, with businesses now largely unable to stay out of the ESG conversation. 

Consequently, traditional customer demand for data centre security through thousands of on-site diesel generators and scalability with fossil fuel solutions no longer appear viable. Instead, the trajectory towards decarbonisation has led some to look to their colocation providers to offer education on how to install their hardware with efficiency in mind, with a focus on space minimisation, avoiding over-cooling and PUE measurement to track progress. 

Many customers are also recognising the need to identify improvements in their supply chain and seek IT partners that will help them meet their sustainability goals. Providers are well positioned, therefore, to purchase 100% clean energy at scale, in line with GHG reporting protocols, and provide it to clients as they need it.  

As sustainability continues to steer the legislative agenda, it has become clear that for the growing data centre market, adhering to ESG principles is now no longer ‘a nice to have’ but is good for business. Operators and customers alike should look ahead to future-proof their businesses and build collaborative partnerships as the climate conversation continues.