Riding the data centre storm: Balancing growing demand with new ESG regulations

Riding the data centre storm: Balancing growing demand with new ESG regulations

Mark Seymour, Distinguished Engineer at Cadence, explores how data centres can achieve the demands of the new efficiency revolution with Digital Twin technology.

Mark Seymour, Distinguished Engineer, Cadence

The squeeze is on

The growth of data is pushing facilities to their limits. According to CBRE, primary market supply has ballooned by 19.2% year-over-year from 2022 to 2023, driven heavily by AI. Meeting this growth puts an increasing strain on energy consumption. In fact, research from the International Energy Agency says that a combination of data centres, AI and cryptocurrencies accounted for almost 2% of global power demand in 2022 – and this could double by 2026.

These figures are front of mind for regulators across the globe. As such, data centres, with their significant energy consumption, will be under a sustainability microscope as new regulations continue to arise. For instance, the European Union’s Energy Efficiency Directive (EED) and Corporate Sustainability Reporting Directive (CSRD) require large enterprises to disclose their carbon usage – from both a direct and indirect standpoint.

Elsewhere, the Securities and Exchange Commission announced that it will create rules and standardise the process necessitating that organisations make disclosures related to climate change, such as material physical and transition risks. These rules are set to be finalised in Spring 2024. All these regulations, and likely any future ones on the horizon, will require data centres to meticulously track and report their carbon footprint.

A strategic shift towards sustainability

For data centre leaders, carbon emissions have become a corporate issue. However, upcoming regulations shouldn’t be seen as a burden, but as a catalyst for positive change. Previously, companies could shift the burden of their greenhouse gas emissions downstream. Now, these looming regulations mean this is no longer viable. Corporate departments will need to adopt a new mindset. Investing in more thorough energy reporting techniques will be central to this.

One technique to help with reporting and determining a data center’s energy efficiency is Power Usage Effectiveness (PUE). This commonly used ratio calculates the energy used by the facility compared with the energy used by IT. In turn, it enables data centre operators to gain a picture of a facility’s energy efficiency performance. With this insight, facilities can then develop strategies to become more efficient.

However, according to Uptime Institute’s Global Data Center Survey last year, PUE scores have plateaued at around 1.5 for years, while leading facilities have achieved scores as low as 1.1. This translates to a potential fivefold increase in wasted overhead energy for many data centres globally. Considering the percentage of global power consumption facilities account for, this inefficiency represents a significant environmental burden. All of this underscores the urgent need for widespread adoption of Digital Twins to pave the way for a more sustainable future.

Financial savings and environmental gains

These digital models rely on physics-based simulation, AI and High-Performance Computing (HPC) to provide visibility into physical infrastructure, and this can be used to improve data centre energy efficiency by up to 30%. For data centre leaders looking to get ahead of the sustainability requirements and meet regulatory requirements, Digital Twins offer a whole host of benefits.

Firstly, Digital Twins enhance carbon emission reporting. Data centre operators can use this technology to deliver automated and detailed reports tailored to the specific requirements of a project. In turn, they can report this back to their manager showing a deep understanding of potential energy savings and efficiency improvements. For instance, this can help spot issues that are arising from stranded capacity due to inefficient use of computing and cooling resources. Digital Twins can also then help to address these issues by conducting virtual simulations and testing different configurations and upgrades, such as new cooling approaches, before implementing them physically. This allows for data-driven decisions that are based on minimising energy consumption and reducing environmental impact.

While these benefits translate to reduced emissions and improved regulatory compliance, they also equate to reduced costs. For example, in collaboration with Cadence, a leading commercial real estate and services company deployed a Digital Twin for a financial services client. Real-time data monitoring led to optimised maintenance schedules, efficient new deployments and improved capacity planning. Most of all, the transformation created an impressive 81% increase in energy efficiency, translating to both environmental benefits and a significant cost saving of US$1.15 million over two years.

A data centre efficiency revolution

As data centres gear up for the explosive growth of AI, a crucial question emerges: how to meet this demand without jeopardising sustainability goals and regulations? That’s where Digital Twins offer a powerful solution. By enabling optimised design and operations, these virtual replicas empower data centre operators and managers to significantly improve energy reporting and efficiency. By embracing Digital Twins, data centres can not only navigate the coming years with confidence but also lead the charge toward a sustainable AI landscape.

Click below to share this article

Browse our latest issue

Intelligent Data Centres

View Magazine Archive