This is the first of a series of HIP Consult blogs on the climate crisis and the ICT industry. As climate change moves into the foreground of international politics and increasingly influences corporate decision-making, players within the ICT industry have begun to grapple with potential ways to “greenify” an industry that is reliant on electricity to keep populations connected and integrated with the digital economy.
The largest culprit in the ICT industry are data centers – carrier hotels, cloud farms, etc. – which house the world’s digitally stored data. As of 2018, the ICT ecosystem contributed over 2% of overall global carbon emissions, while data centers alone contributed around .3%. As the digital economy grows, these contributions will only continue to skyrocket, with some projections associating 8% of projected global electricity demand by 2030 with the energy demand of data centers.
Data centers require electric power to consistently run computers servers and cooling systems to avoid overheating. Traditionally, data centers have been connected to the local electrical grid which may not be run off clean or renewable sources.
The current electricity situation for the data center industry is not sustainable, and it is beginning to crack. The high electricity demand of data centers can overload legacy transmission networks, overtaking supply during peak times and causing load shedding or rolling blackouts. This has been well-reported in Ireland recently, as EirGrid’s forecast that data centers could account for 25% of all electricity demand in Ireland by 2030 influenced a new policy that will have data centers provide their own power at times of high demand. However, this move has been met with trepidation from climate change activists, as on-site facilities would likely utilize petroleum or diesel sources which can be easily turned on and off as needed.
In some parts of the globe, data center providers have leveraged the natural cooling power of their surrounding climate to reduce their electricity demand. There has been a trend for new builds to occur in cooler climates, such as in Sweden and Norway, where outside air can be blown in to prevent overheating. (These Scandinavian markets have the added benefit of sourcing much of their national electricity supply from non-fossil fuel sources, including hydro and nuclear power.) Since it is not possible to reduce the overall electricity demand of data centers this way in all markets, remaining demand must be met by renewable energy wherever possible.
In emerging markets, there has been a surge in plans to build climate friendly data centers, mostly by leveraging ample sunshine where possible. In late 2021, Moro Hub and the Dubai Electricity and Water Authority (DEWA) began construction of the world’s largest solar-powered data center at the Mohammed bin Rashid Al Maktoum Solar Park, United Arab Emirates. In early 2022, French telecom giant Orange teamed up with Engie in Cote d’Ivoire to retrofit their data center in Grand Bassam with photovoltaic solar panels on its roof and carports. While these data centers still require lots of electric power, the use of on-site renewable sources will reduce stress on the grid and ensure renewable energy to meet demand.
Retrofitting data centers with solar panels could also be an effective solution in more mature markets, where there are already sprawling data centers located in areas which have high global horizontal irradiance. This measure of how much of the sun’s radiation reaches the Earth’s surface indicates where solar panels would be the most effective at generating electricity. While they may not generate enough solar power to meet the data center’s total electricity needs, they could reduce strain on the grid by replacing some of that demand with site-specific, climate friendly renewable energy. Data centers in the United States’ West and Southwest (such as the hubs in Phoenix and Silicon Valley), as well as those in Mexico and other parts of Central America, could be prime candidates to add rooftop solar panels.
As the climate crisis becomes more omnipotent, major tech firms have announced plans for carbon neutrality. In 2020, Microsoft announced a plan to become carbon-negative by 2030. Apple, which achieved carbon neutrality in its global corporate operations in 2020, extended its commitment to become carbon neutral across its “entire business, manufacturing supply chain, and product life cycle by 2030” and Meta (formerly Facebook) announced a similar goal in 2021. (Amazon lags behind the curve for U.S. companies, announcing a plan to use 100% renewable electricity by 2030 and achieve net-zero carbon emissions by 2040.) Alibaba’s 2021 announcement of a goal to achieve carbon-neutrality by 2030 in both direct and indirect operations continues the movement towards corporate responsibility and marks the firm’s intention to reduce their reliance on China’s coal-dominated electrical grid to power their data centers and other operations.
The data center industry must devote future investments to even marginally reduce their electricity needs and greenify their energy sources, which in addition to pursuing climate targets may also improve affordability and consistency of service.