Rosanne Kincaid-Smith, COO at Northern Data Group, explores the environmental impact of data centres, and the sustainability measures that can help mitigate their energy consumption and carbon footprint.

From music streaming to photo storage, Netflix to the NHS, data centres and the services they power have become an irreplaceable component of digital society. But it’s their impact on the real world that’s becoming an increasingly alarming problem.

Data centres require an incredible amount of energy to operate. Today, they account for around 1.5% of global energy consumption, yet their growing importance to AI means this proportion will only increase. According to the International Energy Agency’s Electricity 2024 report, “electricity consumption from data centres, AI and the cryptocurrency sector could double by 2026.” In fact, data centres’ worldwide electricity consumption could reach more than 1,000 TWh in 2026 – the same as Japan, a country with a population of around 125 million.

Even the most innovative companies are struggling to contain their energy usage and carbon footprint. Microsoft’s own 2024 Environmental Sustainability Report details that the company’s total carbon emissions have risen nearly 30% since 2020, primarily due to the construction of data centres. With increasing pressure on organisations to reduce and report emissions data, it’s not only their moral responsibility but also in their best interests to choose sustainable data centre partners. If tech leaders like Microsoft are ignoring sustainability targets, how can other innovators pave the way?

Sustainability means more than just energy

Aside from providing people with physical access to AI, a crucial part of digital equity is ensuring that AI’s operation has a minimal impact on people and our planet. Powering data centres via fossil fuel energy for the benefit of one organisation or country is fundamentally unjust because the pollution generated will negatively affect the rest of the world.  

However, sustainability is not simply a question of emissions and carbon neutrality. In reality, data centres exist within complex energy and logistical ecosystems. So, they should be tailored to meet the needs of those ecosystems. Electricity grid stability, noise pollution (particularly if a centre is close to a local community), energy circularity via excess heat reuse and more all contribute to a holistic view of data centre sustainability.

The concept of green data centres is increasingly feasible, even with the market expansion driven by cloud services and GenAI, thanks to innovations in energy efficiency, cooling technologies and the growing availability of renewable energy.To help ensure AI has a universally positive impact on society, businesses and governments must either build or collaborate with infrastructure that is CO2-neutral. So, let’s explore what you need to look out for when selecting a data centre partner – and why it’s important.

Renewable, carbon-free energy

Using data centres powered by renewables is one of the most impactful ways you can lower your own, and the world’s, carbon emissions. Many facilities now use purely clean energy or offset through renewable energy certificates. As net-zero targets approach, businesses who commit to solely carbon-free energy early will likely emerge as industry leaders in the eyes of consumers, as competitors rush later to catch up.  

According to the International Energy Agency, several major data centre operators have set and/or achieved targets to use 100% clean electricity on an annual matching basis. This transformation will likely involve both public and private investment, with costs potentially shared between governments, utility companies, and data centre operators. The focus will be on upgrading grid capacity, integrating renewable energy sources, and enhancing energy storage solutions. Businesses looking to leverage AI technology can therefore get ahead by choosing 100% carbon-neutral data centre providers today.

High energy-efficiency ratings

With data centre power demands projected to reach 35 GW by 2030, a fundamental change in power infrastructure will be essential. Innovations such as advanced cooling techniques (like liquid cooling and immersion cooling), AI-driven energy management systems and the development of more energy-efficient hardware are key strategies. These technologies aim to reduce energy consumption while allowing data centres to expand services. Additionally, adopting on-site renewable energy generation and energy storage solutions can mitigate the impact of rising energy prices.

Meanwhile, the efficiency of data centres is evaluated by a Power Usage Effectiveness (PUE) ratio, which is determined by the total amount of energy used by a centre to the energy delivered to its computing equipment. The current industry standard is around 1.5, but the ideal is 1, which means a data centre is essentially neutral – so businesses should look for ratios as low as possible.  This way, you can ensure maximum value for your payments and resources, while minimal energy waste means greater sustainability.  

Energy prices will likely affect smaller data centres more severely than hyperscale facilities. Hyperscale data centres can leverage economies of scale to invest in energy-efficient technologies and negotiate better energy rates. Smaller data centres might struggle with the capital investment needed for such technologies, potentially affecting their competitiveness and profitability.

Comprehensive water conservation strategies

Water is our most critical natural resource, but it’s finite and irreplaceable. However, data centres often consume huge amounts of water, mainly to help cool power-intensive equipment. A large data centre can consume as much as 5 million gallons of water a day, the same as a town with a 50,000 population. As natural resources grow increasingly scarce, data centres’ water monopolisation could contribute to droughts, biodiversity losses and social inequality. Organisations must partner with centres that reuse their water, take it from recycled and reclaimed sources like rain or – best of all – use as little water as possible.

Ultimately, this kind of holistic view of sustainability is what we should be moving towards. Companies should be building partnerships with peers who understand the potential benefits of renewable energy and sustainability solutions. They also need to consider the impact of the hardware and infrastructure over its entire lifecycle.

As governments and unions like the EU take the first steps towards establishing data centre sustainability ratings, business customers must make sure their providers are easing, rather than exacerbating, the sustainability challenge. After all, resilient, secure data centre infrastructure is the foundation of AI’s future.