Regulating the energy use of data centres looks ‘inevitable’ for 2023

19 Dec 2022

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We look at some of the trends in the data centre sector, along with predictions on how the industry could change next year.

Data centres have been a hot topic this year, with plenty of discussion about their benefits and concerns around their energy use.

According to Central Statistics Office figures, data centres consumed 14pc of Ireland’s electricity in 2021, which was more than rural dwellings.

This growth is expected to continue. Last year, EirGrid predicted that data centres could account for a quarter of Ireland’s electricity usage by 2030 as the country attracts more data centre developments.

Despite energy concerns, the Government confirmed in July that new data centre developments will not be banned as data is an “essential enabler” of our increasingly digital economy and society.

Giordano Albertazzi, the COO of digital infrastructure company Vertiv, said the data centre industry is growing rapidly as more applications require compute and storage.

“The industry has understood that pursuing energy and water efficiency aggressively is key for future success and survival,” he added.

As we look to 2023, here are some predictions for the changes that are coming for data centres, in Ireland and worldwide.

Energy regulation is ‘inevitable’

The rising energy use of data centres has drawn the attention of both governments and organisations. It is estimated that data centres already consume more than 3pc of the total energy generated worldwide.

Albertazzi said increased regulation in this sector is “inevitable”, but could also help push new innovations for data centres.

“The process may not always be easy or linear, but it can be navigated with the help of expert data centre partners and innovative solutions that can anticipate the changes while meeting the always increasing requirements of the data centre applications.”

Increased scrutiny towards data centres has already been seen in Ireland. Earlier this year, South Dublin County Council voted to ban any further data centre developments, claiming there is a lack of capacity in the region.

This decision was challenged in a High Court case by Irish-owned Echelon, which received €855m in financing earlier this year to complete four data centres in Ireland. The Office of the Planning Regulator also ordered a reversal of the ban, saying it did not align with national policy.

The Government confirmed earlier this year that new data centre developments in general will not be banned in Ireland, amid concerns around their environmental impact and the pressure they place on the electricity grid.

Instead, it proposed a set of tighter regulations for new developments as the country works to halve its emissions by the end of the decade.

These regulations include preferring new data centres “associated with strong economic activity and employment” and that make “efficient use of our electricity grid, using available capacity and alleviating constraints”.

There will be a rise in modular design

Vertiv also predicts that the hyperscale data centre sector will turn to modular, prefabricated designs to improve construction speed and efficiency.

Some companies such as Amazon have been using modular infrastructure for years. Huawei currently offers modular installations of various sizes, which it says can boost the speed of construction and help expand existing data centres.

“Standardisation – ranging from modular components, such as power and cooling modules and skids, to full-fledged prefabricated facilities – will become the default approach not just for the enterprise, but also hyperscale and the edge of the network,” Vertiv said.

The company added that this is a newer concept for some leading cloud businesses, which are turning to colocation providers to make standardisation happen. Colocation is when a company rents space at a third-party provider’s data centre for its own services.

Last year, Interxion Ireland MD Séamus Dunne told that colocation can help reduce the complexity of enterprise transformation within businesses, as they can remove most aspects of physical plant operation and improve efficiency.

Data centres will focus on sustainability

In August, Equinix growth and emerging markets VP Judith Gardiner also told that sustainability has become a bigger focus within the data centre industry. This view is also shared by Vertiv EMEA president Karsten Winther.

“In recent years, sustainability has been the greatest focus area for the data centre industry, and that aligns with the 2023 emphasis on increased regulation from governments, as well as interest in alternative energy sources,” Winther said.

Various projects are being undertaken by data centre operators in Ireland looking to reduce their environmental impact.

Microsoft is investigating if backup batteries from its data centre in Dublin could be used to support the growth of renewables on the grid, while Dublin energy agency Codema and data centre provider Equinix are exploring the reuse of waste data centre heat.

But digital expert Gerry McGovern told last year that while companies are becoming more conscious about sustainability, they have to be careful that their actions don’t “border on smugness”.

“It’s like the industry is saying: ‘We may be encouraging a culture of waste and disposability but we’re doing it with renewable energy and look at how much more energy efficient our data centres have become at storing all this crap data we’re producing.’”

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Leigh Mc Gowran is a journalist with Silicon Republic