Emerging Market Opportunities for Green Data Centers

Data is an essential part of our lives, and its use is rapidly increasing (e.g., internet, remote management, data transmission, streaming media services, cryptocurrency mining, etc.), leading to the high demand for data centers (DCs). DCs account for nearly 1% of energy-related greenhouse gas (GHG) emissions, and their contribution to GHGs is expected to increase. Considering the growing demand for data, improving DC efficiency is essential for reducing GHGs. Recently, significant efforts are being made to enable green DC technology that reduces energy consumption and cost.

Continued Technology Innovation for Sustainable Data Centers

Nearly half the power in a data center is consumed by IT equipment such as servers and storage, while the rest is used to cool the facilities and prevent the equipment from overheating. Below are some recent examples of green DC technology innovations related to these energy needs:

• IT servers: NVIDIA, a US multinational semiconductor and electric circuit design company, is testing the Grace CPU for production later in 2023. When applied to DCs, the Grace is expected to roughly double the energy efficient performance of existing x86 CPUs. Several IT companies, including ASUS, HP, and others, are using it to build IT servers with improved energy efficiency.
• Data storage: According to US IT company Pure Storage, the company’s data storage technology increases density and reduces footprint compared with conventional storage, lowering power consumption and cooling costs. Pure Storage claims that its solution can deliver energy savings of up to 85% over competitive data storage systems.
• Cooling: UK startup Deep Green’s 28 kW system next to Exmouth Leisure Centre uses the heat generated by IT servers for cloud computing to heat the center’s swimming pools. Deep Green says heat recovery technology combined with innovative immersion cooling technology reduced the gas used to heat the swimming pools by 62%.

A Wise Market Strategy Can Lead to Business Success

When green DC solutions include technologies such as clean fuel, the range of environmental innovations is much broader. UK DC operator Virtus uses only renewable energy for its DCs, which has shielded the company from energy price fluctuations caused by the Russia-Ukraine war. In 2023, Amazon Web Services in Europe started using hydrotreated vegetable oil (HVO) fuel for backup generators used at DCs to provide backup power in the rare event of a power outage. HVO is a renewable, biodegradable, and nontoxic fuel produced from waste cooking oil or vegetable, plant, and residue oils, and it can reduce GHG emissions by up to 90% over the fuel’s lifecycle compared with diesel.

As these various emerging solutions are being adopted, the future of the green DC market looks bright, and setting a wise market strategy in a company’s areas of strength can lead to business success. For example, NVIDIA, Pure Storage, and Deep Green focus on innovation in their competitive technology areas. South Korean energy company Hanwha Solutions and finance company SKS Private Equity announced a green DC investment partnership in 2023. Financing companies globally are using mergers and acquisitions to serve this growing market.