Fossil Fuels, Water, Crashing Data Center Sustainability Goals

Today’s world is highly reliant on data centers and fossil fuels and that dependence is rising by the day.

Given energy’s necessity in this CRE sector – not to mention other natural resources such as water – and given the world’s focus on sustainability – it’s a wonder if the two will be around much longer.

Of course, they will.

JLL recently brought together top data center thought leaders to discuss the main factors affecting the industry at its 2022 Data Center Forum.

JLL’s report from the forum speaks about this topic’s importance and states that the data center industry is what about becoming more sustainable.

“Because the data center industry is astute at being able to continually adapt and improve, it can excel at sustainable operations, and all operational elements within the data center space represent sustainability opportunities.”

It better.

Recently, 96% of 50 of JLL’s clients have defined sustainability goals, but only 19% have publicly committed and funded execution plans.

Data Center Owners Have an Obligation

Key insights gained from the forum include carbon accounting, sustainability, infrastructure challenges in emerging markets and investment appetite.

Brian Kortendick, JLL executive director, global data center strategy, said in prepared remarks, “Sustainability is at the forefront of industry challenges, we all, together, need a concentrated effort to develop new concepts, practices and innovative approaches to achieve sustainability goals.”

With its high reliance on power consumption, the ongoing operational carbon output for data centers is materially higher, JLL said, thus data center owners have an obligation to invest in sustainable ways of doing business.

Public Utility Companies Can’t Meet Demand

Thomas Galli, partner at Duane Morris, tells GlobeSt.com that while sustainability is an increasingly important issue among developers, owners, operators, tenants and other participants in the data center sector, no scalable practical solutions have been identified notwithstanding strong commitments.

Galli said that in recent years, sustainability has been addressed with advances in technology to improve efficiencies in the use of power in data centers.

“However, those improved efficiencies have been relatively modest when considered in light of the massive increase in the demand for power to serve the industry – with no end in sight for that increasing demand,” Galli said.

“As critically important at the issue of sustainability is to the industry, of more critical current import is the availability of power to serve the industry. Public utility companies in a few major markets recently acknowledged they will not be able to meet demand required to serve projects in current pipelines for development.

“This dynamic has had an intriguing impact on the negotiating leverage enjoyed by hyperscalers in lease negotiations for many years.

“In recent months, three private equity clients with large data centers development projects in Northern Virginia declined new opportunities for built-to-suite leases with one of the largest hyperscalers on economic terms and other terms which were customary for that hyperscaler as recently as the first quarter of this year.”

Pushback on Data Center Development Growing

CommercialEdge’s Doug Ressler tells GlobeSt.com that data centers are long-term investments and extremely sensitive to the needs of the communities where they are developed.

“The Southwest is under development pressure as it relates to data centers and water usage,” Ressler said.

“There appears to be growing pushback on data center development, because of the volume of water they use and their energy needs. While some cities like Phoenix, Las Vegas have low natural disaster chances, they are areas where conservation of water is critical.”

Data Center Software Another Energy Suck

Rohit Jayachandran, senior vice president, Mphasis, an applied technology and solutions provider, tells GlobeSt.com, that most sustainability initiatives of data centers are based on using renewable energy for cooling or optimizing cooling systems to reduce power consumption.

“However, the software applications or workloads running in these data centers have a significant impact on the amount of electricity being consumed and resulting emissions within data centers,” he said.

Based on current research, Jayachandran said that training a complex machine-learning (ML) model, such as Meena, consumes the same amount of energy as a passenger vehicle that drove 242,231 miles. Researchers at MIT have also estimated that training a large deep-learning model produces 626,000 pounds of CO2, equal to the lifetime emissions of five cars, he said.

“With enterprises going digital, globally, they are using software for all their digital operations, analysis and decisioning, thus exponentially increasing the carbon footprint of software and impacting their data center sustainability metrics,” Jayachandran said.

“This raises the need for enterprises to be able to conduct complete carbon diagnosis for software – calculating the carbon impact of software across software development lifecycle and operations.

“Technology leadership within enterprises need to take cognizance of this impact and implement solutions to assess, baseline, measure and support action to reduce sustainability impact of software and the technology value chain and help decarbonize their digital footprints across their data centers.”

Land Costs Another Key Factor

Moody’s Analytics’ Senior Economist, Ermengarde Jabir, tells GlobeSt.com that climate concerns are likely soon to begin to affect location choice for data centers due to the high amounts of energy and water required to cool them.

She said that with property prices surging over the last couple of years, the cost of land in traditional data center hubs, such as Northern Virginia, has, in some instances, become prohibitive for developers.

“Increasingly, we are seeing data center clusters expanding in metros such as Columbus where land is comparatively cheaper yet still near major metro areas like Chicago.

“Phoenix, a metro that has done remarkably well in recent years with the heightened demand for traditional warehouse/distributions space, has also benefitted from the boom in data center demand combined with more competitive land prices, with many new data centers coming online in the past couple of years as tech giants, including Google and Microsoft, continue to expand their data center footprint.

“However, the metro is seeing hotter temperatures and water scarcity that are key factors when deciding the operational viability of data centers. As everyday life becomes increasingly more dependent on digital technology, data centers, which power everything from e-commerce transactions to the remote workforce, become more vital than ever.”

Strong Governance, Top-Down Support Needed

Daniel Kirschner, JLL head of growth and business development, work dynamics, said in a prepared statement, “The tradeoff between investments in sustainable objectives and revenue-generating assets for companies will always be a challenge.

“The key is strong governance with top-down support and initiatives that take advantage of both increasing reliability and reducing carbon output concurrently. Both objectives can go hand in hand with a proactive, and predictive, maintenance and replacement approach.”