Net zero carbon data centres: Expanding capacity amid evolving policy and regulation

Originally published in Data Center Dynamics in October 2023.

As data centers come under increasing public and regulatory scrutiny, how do we expand the sector’s capacity without increasing its carbon footprint?

The development of the digital age is driving the evolution of the data center sector, but the pursuit of net zero carbon presents a more momentous shift and will provide its greatest challenge yet. It requires us all to think differently.

In its reporting, the Intergovernmental Panel on Climate Change (IPCC) has been stark in its conclusions: “Climate change is real and human activities, largely the release of polluting gases from burning fossil fuel (coal, oil, gas), is the main cause.”

As multidisciplinary engineers with a long history in the data center sector, and having environmental sustainability embedded into every aspect of the practice (Cundall, has publicly committed to achieving net zero carbon on all of its projects by 2030), Cundall has a unique focus on these challenges.

Data centers cannot be ignored as we combat climate change. Without them we do not have a digital world; from day-to-day services such as online banking, e-commerce, and working from home, through to more future-focused areas such as artificial intelligence, quantum computing, and driverless cars. The need for data centers and their continued growth cannot be disputed. However, they are also coming under increasing scrutiny, due to their environmental impact.

In this series of articles, we will be discussing the exciting developments and associated challenges we are seeing. This includes the innovations to improve energy, water efficiency, and land use, and to achieve sustainable development with net zero carbon status.

Virtual meetings and mobile devices make it possible for people to work from home and reduce transport emissions, but every byte of data has an emissions footprint of its own. So, while digital tools offer the means to improve our management of water, materials, and to support sustainable economic development – just sending an email adds to the problematic carbon footprint of data, and even this can vary enormously, subject to the location and performance of the data centers that handle the traffic.

We also need to be aware that as global development provides more communities with access to digital services, physical infrastructure, including data centers, will need to expand to support the growth in users, many of whom will be in parts of the world that do not currently have access to renewable energy supplies.

Growing the services while shrinking the carbon footprint

The last decade has seen exponential growth in the use of internet and digital services and thus in the demand for data. In 2022, data centers and data transmission networks were each responsible for approximately 1.-1.5 percent of global electricity use, and 1.0 percent of energy-related greenhouse gases emissions (Data centers & networks - IEA.)

The demand for data is projected to go on growing, as technologies with high data requirements and processing power, such as artificial intelligence, machine learning, blockchain and virtual reality become part of our daily lives.

Fifteen to twenty years ago, before the expansion of social media and other online activities, most people had little understanding of what a data center was except in general terms, such as being aware that financial institutions used them to host their bank accounts. Data centers were fewer, smaller, and more discreet.

However, since 2010, the number of internet users worldwide has more than doubled, and a huge expansion in online activities has seen a 25-fold increase in global internet traffic. This has driven a corresponding increase in global data center capacity.

This expansion has propelled data centers much more into the public gaze, and despite improvements in energy and water efficiency, there is heightened awareness of their environmental impact.

Regulation, policy, initiative

This awareness does not simply confine itself to dinner table conversations regarding the pros and cons of the digital economy, or what should be done to tackle climate change. In recent years, there have been several instances of opposition groups successfully pushing back on planned data center developments on environmental grounds.

For their part, governments and municipalities are cognisant of the environmental impact that data centers can have, but also realize that the sector is key to underpinning society’s digitalization and boosting economic regeneration. They have therefore sought to encourage data center development, but have also introduced legislation aimed at driving improvement in energy efficiency, and reducing carbon emissions.

Local planning policy often sets specific environmental benchmark targets, such as BREEAM Excellent, or LEED Gold, which must be achieved if permitting is to be granted.

In the UK, the GLA’s London Plan policy requires all major new developments – data centers included – to achieve a 35 percent reduction in on-site carbon emissions relative to a Part L Building Regulations compliant reference project.

Any excess emissions must be offset via a financial contribution towards the GLA’s Carbon Offsetting Fund. This is basically a tax on developers to fund carbon reduction measures elsewhere. The carbon offset price has been set at £95/ton CO2 over 30 years. However, the charge must be paid upfront, so the actual cost is £2,850 per ton.

The sting in the tail for data center developers, is that emissions associated with the IT process load are now to be included in the calculation. Given that the annual energy consumption of even a modestly sized facility could run to hundreds of thousands of megawatt hours (MWh), this represents a very substantial cost for developers – unless they can drive their on-site emissions down below the 35 percent threshold.

Outside of London, there is currently no policy for carbon offsetting, but it seems likely that other local authorities will follow London’s lead and introduce similar schemes in the future.

In some regions, particularly the Nordic’s, planning policy has been introduced requiring new data centers to provide waste heat to local district heating infrastructure, or to be ‘heat network ready’ for connection to future schemes.

Whilst a policy of promoting heat reuse may not lead to a direct reduction in data center emissions, it is seen as an important step towards decarbonizing the wider community, by displacing other, more carbon intensive, sources of heat.

At an EU-wide level, there are regulatory and voluntary schemes aimed at improving the energy efficiency of the components used in data centers, such as the EU Eco-Design Regulations for servers and data storage products.

The recast Energy Efficiency Directive (EED) will introduce energy and sustainability reporting requirements for data centers based within the EU from May 2024, while the European Green Deal aims at setting the ICT sector on a path to achieve Carbon Neutrality by 2050.

In other regions, including Ireland and the Netherlands, moratoriums on new data center development have been introduced, to relieve pressure on over-stretched power grids. To overcome these constraints, data center developers have looked at innovative ways of generating their own power supplies via funding of off-site renewables, or the provision of on-site generation.

In APAC, Singapore lifted its own moratorium on new data center construction, replacing this with specific sustainability requirements that new facilities must meet.

China has set specific nation-wide power usage effectiveness (PUE) targets, while big trading centers (Beijing, Shanghai, Shenzhen) are setting their own limits on PUE.

Australia now requires data services providers to offer rack space with a five-star NABERS energy rating or equivalent, to procure 100 percent accredited Greenpower (renewable energy) and have set maximum limits on PUE.

The list goes on, and momentum is building. The industry needs to rapidly adapt to the joint challenge of meeting rising demand for capacity, whilst also moving towards achieving net zero carbon. It’s not going to be easy, but there is no alternative.

In part two of this article, my colleague, Dr. Marianna Chatzopoulou, will discuss defining net zero carbon, and how we might achieve it in a resource stressed environment.