Data Centers How Data Centers Impact the Environment

How Data Centers Impact the Environment

Data Centers Environment Impact

Digital infrastructure, and specifically data centers, are growing rapidly, which means that more power is needed to run these data centers, heightening their impact on the environment for greenhouse gas emissions, renewable energy, power sustainability and water sustainability. Indeed, this is why digital infrastructure forms a core part of the United Nations’ Sustainable Development Goals.

United Nations Sustainable Development Goals

Digital infrastructure assets have a central role to play in the transition to a low-carbon economy and sustainable cities. Additionally, environmental goals have gained increasing importance for companies. In particular, the employees, customers, shareholders, and other key stakeholders of these companies are also becoming a driving force.

Data Centers and Energy Consumption

Data centers have a heavy reliance on the electrical grid and comprise a significant portion of electricity usage globally. Indeed, data centers are one of the most energy-intensive building types and have a significant impact on the environment. Specifically, data centers consume 10x to 50x the energy per amount of floor space, compared to a typical commercial office building.

Overall, data centers comprise 1.8% of electricity usage in the United States. Therefore, it is clear that data centers are significant users of electric power. However, data center designs and their ability to have multiple tenants make them a more efficient use of energy than the alternative, which is older, traditional on-premises servers.

Key Areas of Environmental Focus for Data Centers

Data centers prioritize four key environmental factors, as they strive reduce their impact on the environment. Specifically, these focus areas for data centers include greenhouse gas emissions, renewable energy sourcing, power sustainability, and water sustainability.

(1) Greenhouse Gas Emissions

Greenhouse gas emissions for data centers are often measured by carbon intensity. Specifically, carbon intensity is a metric that provides a relative comparison of greenhouse gas emissions characteristics, after factoring in the:

  • Scale of a Business: through energy use or revenue measurements
  • Emission Rate: relative to the primary energy source that generates electricity for the electrical grid. For example, energy sources include hydroelectric, natural gas, coal, and wind power

Overall, greenhouse gas emissions for data centers are broken down in to three types of scope. The following framework leverages guidance from the Environmental Protection Agency (EPA):

  • Scope-1: Natural gas (for heating and fuel cells), diesel (for backup generation), and refrigerants (used in cooling systems)
  • Scope-2: Electricity purchases or consumption
  • Scope-3: Indirect greenhouse gas emissions, including emissions from the IT equipment of customers in the data center

(2) Renewable Energy Sourcing

Data center operators are increasingly sourcing direct energy, where possible, from renewable sources. However, large energy commitments and sophistication is required to enter into renewable energy partnerships. Therefore, direct sourcing of renewable energy is more often done by the cloud service providers, such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud.

Two key factors allow the cloud service providers to more easily procure renewable energy. Firstly, the cloud service providers are typically the only tenant inside their data centers. Secondly, the cloud service providers have the ability to locate their data center sites near renewable energy sources.

In comparison, multi-tenant data center providers, which include companies like Equinix and Digital Realty, have been less active in renewable energy sourcing. This is primarily a result of uncertainties in the:

  • Duration of tenant leases
  • Power usage by tenants of these facilities
  • Preference of tenants for data center locations closer to key data center hubs

(3) Power Sustainability

Data center power sustainability revolves around an efficiency metric known as Power Usage Effectiveness (PUE). Specifically, Power Usage Effectiveness (PUE) is the ratio of the total amount of electricity consumed by a data center to the amount of electricity delivered to its equipment. Power Usage Effectiveness (PUE) is always greater than or equal to 1. Indeed, the closer Power Usage Effectiveness (PUE) is to 1, the more efficient the data center.

According to the latest survey from the Uptime Institute, the average Power Usage Effectiveness (PUE) of a data center currently is 1.59. Overall, this figure has been steadily declining since 2007, when it was 2.5, and 2013, when it was 1.65.

Power Usage Effectiveness PUE Historical
Source: Data center Power Usage Effectiveness (PUE) figures in global Uptime Institute surveys from 2007 to 2020
Server Efficiency

An example of how data center providers strive to improve their Power Usage Effectiveness (PUE), and thus sustainability, is through server efficiency. Indeed, newer severs are able to handle higher workloads with similar or even lower power consumption. In turn this allows data center providers to reduce their impact on the environment.

(4) Water Sustainability

Water sustainability includes data center projects such as i) reduction of potable (i.e., safe to drink) water use, for the purposes of cooling, ii) on-site water treatment, iii) rainwater harvesting, and iv) water restoration, particularly in vulnerable regions with high water stress.

Data center water sustainability revolves around an efficiency metric known as Water Usage Effectiveness (WUE). Specifically, Water Usage Effectiveness (WUE) measures the water a data center uses to cool its equipment. Water Usage Effectiveness (WUE) is the ratio of annual water usage, divided by the energy consumption of the IT computing equipment in kilowatt hours (Kwh).

Data Center Providers – Impact on the Environment

Below we detail the environmental metrics for the six largest, publicly-traded data center operators in the United States. Specifically, these metrics include each data center providers’ energy consumption, renewable energy use, power sustainability and water sustainability. Additionally, these environmental metrics are outlined based on each operator’s i) current achievements and ii) targets for the future, if they have any.

Equinix

Equinix consumed a total of 5,740 gigawatt hours of energy, over the past year, which is comprised of electricity and chilled water. Of this total, 5,250 gigawatt hours, or 92% came from renewable energy sources.

Regarding power sustainability, Equinix reports a Power Usage Effectiveness (PUE) ratio of 1.54. Indeed, its current data center build standards target a Power Usage Effectiveness (PUE) ratio of 1.45. For water sustainability, Equinix does not report Water Usage Effectiveness (WUE) information for its data centers.

Data Centers Environmental Metrics Equinix
Carbon Reduction Target – Equinix

Equinix intends to reduce its global carbon footprint across direct and indirect energy consumption. Additionally, the company will increase its focus on indirect value chain emissions. Specifically, direct energy includes electricity, natural gas, and diesel. Whereas indirect energy represents the energy consumption from Equinix’s tenants in the company’s data centers.

Renewable Energy Target – Equinix

Equinix has a long-term target of using 100% clean energy. Notably, all of Equinix’s data centers in the United States and Europe achieved 100% renewable energy use in 2019.

Water Usage Target – Equinix

Equinix has the long-term water usage target of reducing its overall water consumption.

Additional Highlights – Equinix

Equinix is the only data center provider that breaks out its energy consumption by type of renewable energy used (see below). Indeed, this data helps to further quantify the impact of Equinix’s data centers to the environment. Specifically, Equinix’s 5,250 gigawatt hours of renewable energy sources is split into four categories:

Equinix Renewable Energy By Type
  1. Green Power from its suppliers
  2. Renewable Energy Credits (RECs)
  3. Virtual (Financial) PPAs (Power Purchase Agreements)
  4. Grid-mix remainder (i.e., non-renewable energy)

Digital Realty

Digital Realty consumed a total of 6,904 gigawatt hours of energy, over the past year. Of this total, 1,966 gigawatt hours, or 30% came from renewable energy sources.

Regarding power sustainability, Digital Realty does not report Power Usage Effectiveness (PUE) information. However, the company targets a Power Usage Effectiveness (PUE) ratio of 1.5, as a baseline. For water sustainability, Digital Realty reports a Water Usage Effectiveness (WUE) ratio of 1.58 for its data centers.

Data Centers Environmental Metrics Digital Realty
Carbon Reduction Target – Digital Realty

Digital Realty intends to bring carbon emissions in-line with a 1.5-degree climate change scenario by 2030. Specifically, this goal follows the Science-Based Targets initiative (SBTi) calls to action.

Renewable Energy Target – Digital Realty

Digital Realty’s long-term goal is to use 100% renewable power. Additionally, the company has set further specific targets. Firstly, Digital Realty wants to use 100% wind power for its United States colocation business. Secondly, the company intends to use 100% renewable energy for all of its Europe, Middle East, and Africa properties.

Water Usage Target – Digital Realty

Digital Realty targets expanding water conservation and efficiency efforts through reduction, reuse, and recycle projects. Specifically, these projects relate to cooling technologies.

CyrusOne

CyrusOne consumed a total of 2,506 gigawatt hours of energy, over the past year. Of this total, 456 gigawatt hours, or 18% came from renewable energy sources.

Regarding power sustainability, CyrusOne reports a Power Usage Effectiveness (PUE) ratio of 1.6. For water sustainability, CyrusOne reports a Water Usage Effectiveness (WUE) ratio of 0.37. Indeed, CyrusOne’s Water Usage Effectiveness (WUE) ratio is best-in-class for the six data center operators covered in this article.

Data Centers Environmental Metrics CyrusOne
Carbon Reduction Target – CyrusOne

CyrusOne intends to reach net zero carbon emissions, meaning carbon neutral, by 2040.

Renewable Energy Target – CyrusOne

Currently, 100% of CyrusOne’s facilities have the ability to offer customers some form of renewable power, as an upgrade through the power provider. However, CyrusOne has no long-term renewable energy target set.

Water Usage Target – CyrusOne

CyrusOne wants to avoid dependence on water for cooling. Therefore, the company is building all new data centers with water-free cooling. Additionally, most of CyrusOne’s older facilities use water-free cooling.

CyrusOne also wants to restore water in high-risk regions. Indeed, the company intends to have 7 net positive water facilities in high stress regions, as compared to only 1 currently. Furthermore, the company wants to be Net Water Positive, by acquiring Water Restoration Certificates (WRCs). In turn, this will allow CyrusOne to restore water to local ecosystems, making its presence a net benefit to the watersheds where it operates.

CoreSite

CoreSite consumed a total of 908 gigawatt hours of energy, over the past year. Of this total, 381 gigawatt hours, or 42% came from renewable energy sources.

Regarding power sustainability, CoreSite reports a Power Usage Effectiveness (PUE) ratio of 1.4. For water sustainability, CoreSite does not report Water Usage Effectiveness (WUE) information.

Data Centers Environmental Metrics CoreSite

Overall, CoreSite has rather disappointing commitments to carbon reduction, renewable energy, and water usage (as seen below).

Carbon Reduction Target – CoreSite

CoreSite has not set any carbon reduction target.

Renewable Energy Target – CoreSite

CoreSite has not set any renewable energy target.

Water Usage Target – CoreSite

CoreSite intends to reduce the use of potable (i.e., safe to drink) water, for the purposes of cooling. Additionally, the company wants to minimize its freshwater footprint, by utilizing rainwater for cooling, when possible. Presently, CoreSite primarily uses water for cooling at its data centers.

QTS Realty Trust

QTS Realty Trust consumed a total of 1,186 gigawatt hours of energy, over the past year. Of this total, 380 gigawatt hours, or 32% came from renewable energy sources.

Regarding power sustainability, QTS does not report Power Usage Effectiveness (PUE) information. However, Dgtl Infra’s analysis shows that QTS’ Power Usage Effectiveness (PUE) ratio is greater than 1.50. For water sustainability, QTS reports a Water Usage Effectiveness (WUE) ratio of 1.63 for its data centers.

Data Centers Environmental Metrics QTS
Carbon Reduction Target – QTS

QTS has not set any carbon reduction target.

Renewable Energy Target – QTS

For renewable energy targets, QTS has set both medium- and long-term goals. Firstly, QTS has a medium-term goal of achieving 50% of power from renewable energy sources by 2022. Secondly, in the long-term, QTS intends to procure 100% of power from renewable energy sources by 2025.

Water Usage Target – QTS

QTS targets conserving at least 15 million gallons of water per year. Indeed, QTS has already achieved its prior goal to conserve at least 10 million gallons of water per year.

Switch Inc

Switch consumed a total of 690 gigawatt hours of energy, over the past year. Of this total, 690 gigawatt hours, or 100% came from renewable energy sources.

Regarding power sustainability, Switch reports a Power Usage Effectiveness (PUE) ratio of 1.23. For water sustainability, Switch does not report Water Usage Effectiveness (WUE) information for its data centers.

Overall, Switch’s renewable energy use and Power Usage Effectiveness (PUE) ratio are both best-in-class for the six data center operators covered in this article. Indeed, this demonstrates how Switch strives to be the data center operator with the lowest impact on the environment.

Data Centers Environmental Metrics Switch
Carbon Reduction Target – Switch

Switch already operates with zero greenhouse gas emissions for equipment inside its data centers, by using renewable energy.

Renewable Energy Target – Switch

Since January 2016, Switch has powered all of its U.S. data centers with 100% clean and renewable energy. Indeed, Switch is the largest data center operator in the United States to be 100% renewably powered.

Water Usage Target – Switch

Switch has not set any water usage target.

Additional Highlights – Switch

Overall, Switch is one of the most environmentally conscious technology firms in the world. Switch is the only company that Greenpeace recognizes, in its Clicking Clean report, as having a 100% clean energy index. The company’s energy index was higher than every other technology company identified in the report, including Apple, Facebook, Google, Microsoft, and Salesforce. Additionally, Switch was the only company in the report to receive an “A” grade in all five categories measured by Greenpeace.

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