Greening Asia’s data centres

The International Energy Agency (IEA) estimates the data centre sector is responsible for 1% of global electricity use, enough to power a country. 

The International Energy Agency (IEA) estimates the data centre sector is responsible for 1% of global electricity use, enough to power a country. This power is required for the servers and more importantly to cool them, which is a particular challenge in warmer Asian climates.

Sam Crispin, sustainability consultant at Savills Asia Pacific, says: “Data centres are essential for the digital economy and demand for them is increasing across the region, which has sparked a lot of interest from real estate investors. However, they are energy-hungry beasts and can be a challenge to investors with a Net Zero commitment.”

Data centre owners can introduce a variety of measures to reduce energy use. For example, evaporative cooling systems can reduce both power and water usage but are less effective in cold or humid climates, while AI and machine learning can optimise use of cooling and reduce energy consumption. However, the end-users will determine how much energy is used by the way they run their capacity. This means a partnership approach between landlord and tenant is essential.

The key metric for data centre energy efficiency of a centre is Power Usage Effectiveness (PUE), the ratio of the total amount of energy used by the facility to the energy delivered to the servers. A perfect PUE would be 1 and the best centres today average around 1.2, however the industry average is close to 1.6.

Asia Pacific centres perform worse than the global average, digital infrastructure advisory organisation Uptime Institute says, 1.69 compared with 1.58. Moreover, Uptime Institute says average PUEs have changed little since 2013, mainly because of the trend towards larger data centres, which are less energy efficient.

However, a lower PUE means lower energy costs and, in some markets, lower regulatory costs. In a recent webinar for the Urban Land Institute, private equity investor Actis explained that regulations in South Korea, where it has developed two data centres, meant reducing an asset’s PUE to 1.4, from 1.8, would save $13m in emissions charges.

Renewable energy is central to attempts to make data centres more sustainable. There is relatively little energy from renewable sources available from the grid in Asia, however some datacentres are using on-site wind or solar power – although these measures would only provide a faction of the centre’s power needs. In Singapore, Microsoft has signed an agreement with clean energy firm Sunseap to power its data centres using rooftop solar panels Sunseap has installed on buildings across the city.

Crispin says: “It can sometimes be hard to justify the upfront costs of energy saving measures in terms of money saved today. However, investors should consider the developing regulatory environment and investor attitudes towards sustainability which will make these measures more valuable over time. As more businesses adopt Net Zero targets, demand for greener data centres will increase.”