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From Gavel to Green: How Regulations are Driving Data Centers towards Sustainability

All these initiatives represent the world's mounting concern over the environmental impact of data centers, and the growing pressure on operators to demonstrate their commitment to sustainable operations. Yet, despite these pressing demands, many data center operators are unprepared to meet these new regulatory requirements, creating an urgent need for them to rethink their strategies and prioritize sustainability.
Judge gavel on background of data center. Digital law concept of duality of Judiciary, Jurisprudence and Justice and data in the modern world.

In an interconnected world that continues to grapple with the reality of climate change, the stakes have never been higher for data center operators. The industry is under increasing scrutiny from regulators, policy makers, customers, and investors who are all demanding more sustainable and energy-efficient operations. As put by the Uptime Institute in their Global Survey of IT and Data Center Managers 2022, “Most operators expect carbon emissions reporting requirements soon — yet many are unprepared.”

Despite their essential role in supporting our connected world, data centers are a significant contributor to global carbon emissions. The U.S. Department of Energy stated, “Data centers are one of the most energy-intensive building types, consuming 10 to 50 times the energy per floor space of a typical commercial office building. Collectively, these spaces account for approximately 2% of the total U.S. electricity use, and server energy use is expected to grow.”

To mitigate the environmental impact of data centers, government regulators worldwide have begun implementing strict standards and regulations. These rules are designed to limit energy use and carbon emissions, encourage the use of renewable energy, and promote efficiency in data center operations.

The EU Energy Efficiency Directive (EED), for example, has set several ambitious targets to reduce energy consumption, aiming to achieve a 32.5% reduction in primary energy consumption by 2030 compared to 2007 levels, with a sub-target of a 30% improvement in energy efficiency in data centers by the same year. It has also outlined measures to enforce these targets, such as mandatory energy audits for large energy users and labeling schemes for energy-consuming products.

California has taken a similar approach with its Title 24 standards, which impose a range of energy-efficiency requirements on all newly constructed and existing buildings. For data centers, these include standards for computer room energy efficiency, Power Usage Effectiveness (PUE) monitoring, and water and lighting efficiency. Furthermore, the latest version of Title 24, in effect from 2023, has tightened the minimum PUE requirement for data centers from 1.2 to 1.1.

The Singaporean Data Centre Energy Efficiency Scheme (DCS) and Australia’s National Built Environment Rating System (NABERS) take a slightly different approach, offering incentives for data centers to adopt energy-efficient technologies and practices. The DCS provides grants for the implementation of energy-efficient technologies and financial aid for energy audits, while NABERS calculates a facility’s rating based on operational data, considering factors such as PUE, cooling system efficiency, water consumption, and waste generation.

In the United States, the SEC is proposing new rules requiring public companies to disclose their climate-related risks, including those related to data centers. The proposed rules would require the disclosure of direct greenhouse gas emissions (Scope 1), indirect emissions from purchased electricity or other forms of energy (Scope 2), and certain types of GHG emissions.

All these initiatives represent the world’s mounting concern over the environmental impact of data centers, and the growing pressure on operators to demonstrate their commitment to sustainable operations. Yet, despite these pressing demands, many data center operators are unprepared to meet these new regulatory requirements, creating an urgent need for them to rethink their strategies and prioritize sustainability.

To achieve compliance, data center operators must focus on a range of metrics such as Average Delta T, Cooling Efficiency, Energy Consumption, PUE, Total CO2, Carbon Usage Effectiveness (CUE), Server Utilization, and Water Usage Effectiveness (WUE). By understanding these metrics, operators can improve their energy efficiency, reduce their environmental impact, and show compliance with regulatory requirements.

Data center operators must realize that these regulatory measures are not punishments, but rather a call to action to future-proof their operations. Transitioning to sustainable operations can be beneficial not just in terms of regulatory compliance, but also from the perspectives of operational efficiency, cost savings, corporate responsibility, and customer trust.

The pressing question for data center operators is not “if” they should adapt to these changes, but “how.” They must focus on designing and managing their data centers in ways that reduce energy use and emissions while still meeting the increasing demand for their services.

One of the ways they can achieve this is by focusing on Power Usage Effectiveness (PUE), a ratio that measures how efficiently a computer data center uses energy. A lower PUE indicates higher operational efficiency. Data center operators can lower their PUE by using energy-efficient servers, implementing advanced cooling techniques, using power management software, and regularly monitoring and optimizing their operations.

Another key metric is the Carbon Usage Effectiveness (CUE), which measures the amount of carbon dioxide emitted per unit of IT energy consumed. It helps operators understand and manage the environmental impact of their data centers beyond just energy use. Operators can reduce their CUE by sourcing energy from renewable sources, implementing energy-efficient technologies, and optimizing their operations.

Water Usage Effectiveness (WUE) is another important metric that measures the amount of water used per unit of IT energy consumed. Given the massive amounts of water needed to cool data centers, reducing WUE can significantly contribute to their sustainability. Techniques to achieve this can include using air-side economizers, implementing water recycling systems, and employing advanced cooling systems that minimize water use.

Finally, data centers can reduce their Server Utilization, which refers to the extent to which the processing power of a server is used. A lower Server Utilization means that the server is not being used to its full capacity, wasting energy. Data center operators can optimize their Server Utilization by using virtualization technologies, employing efficient workload management techniques, and decommissioning unused servers.

The monitoring and optimization of these metrics require the implementation of robust data collection and management systems. Regular audits and assessments are essential to ensure ongoing compliance and to identify areas for further improvement. In this regard, digital solutions and advanced analytics can be invaluable, providing real-time monitoring capabilities and insights to optimize operations.

To successfully transition to sustainable operations, data center operators need to adopt a comprehensive, systematic approach. This includes setting clear sustainability goals, establishing robust governance structures, investing in energy-efficient technologies and practices, and fostering a culture of sustainability within their organizations.

Moreover, collaboration and partnerships can play a significant role in accelerating the transition to sustainable operations. By collaborating with governments, regulators, industry peers, and technology providers, data center operators can leverage collective expertise and resources, share best practices, and drive innovation in energy efficiency and sustainability.


Additional Resources

White Paper: Fundamental Measures of Data Center Sustainability

EU Energy Efficiency Directive (EED): Critical Compliance Regulations Impacting Data Center Operations

Executive Brief: Climate Risk Disclosures in Data Centers – A Review of the Proposed SEC Guidelines

Executive Brief: Singapore’s Data Centre Energy Efficiency Scheme (DCS)

Nlyte Data Center Sustainability Compliance Reporting Solution

Referenced Legislation

The EU Energy Efficiency Directive (EED)

United States SEC Climate Risk Disclosure

California Title 24 in the USA

Singapore’s Data Centre Energy Efficiency Scheme (DCS)

Australia’s National Built Environment Rating System (NABERS)