The global sustainable data center market by investment was valued at USD 31.25 billion in 2022 and is expected to grow at a CAGR of 9.72% from 2022-2028.
Policy drivers and regulations such as The Paris Agreement, the RE100, and certifications such as Leadership in Energy and Environmental Design (LEED) and ISO50001 drive Latin America's green data center development market. The Climate Neutral Data Centre Pact has played a significant role in increasing the sustainability of European data centers, as all signatories will be relying on renewable energy for their facilities by 2030. APAC data centers seek green certifications like LEED (Leadership in Energy and Environmental Design) and BCA Green Mark to showcase their commitment to sustainability.
North America, Nordic countries, Singapore, Germany, Netherlands, and Switzerland are using over 90% of renewable energy in their operations. APAC countries, other Western European Countries, and the UAE work at 60% - 70% of renewable energy in data centers. African countries, other LATAM countries, other Middle Eastern countries, and Southeast Asian countries, excluding Singapore, utilize 30% -40 % of renewable energy in data centers.
Large-Scale Colocation and Hyperscale Data Center Operators Driving the Sustainable Data Center Market
In North America, colocation vendors such as Equinix, Digital Realty, QTS Realty Trust, Vantage Data Centers, CyrusOne, Compass Datacenters, and hyperscale vendors such as Microsoft, AWS, Google, Apple, Meta, and others are adopting lithium-ion UPS systems, Microgrid systems, Smart-grid systems, and many newer support systems supporting the sustainable data center market growth.
Companies such as Eaton, Vertiv, Schneider Electric, and many others are supplying lithium-ion-based UPS systems, smart-grid solutions, and new switchgears compatible with different sources of power supplies.
KEY MARKET TRENDS
Increased Focus On Renewable Energy Sources and Efficient Cooling
Hyperscale players such as AWS, Google, Facebook (Meta), Microsoft, and Apple are procuring renewable energy for their data centers.
QTS Realty Trust meets 35% of its energy requirements from renewable energy with a target of 100% renewable energy by 2025.
Free cooling chillers will increase to reduce power consumption and carbon emissions by data centers. Also, the shift will increase towards liquid cooling, leading to more sustainable data centers and bringing down PUE to a range of 1.1 to 1.4.
Air and liquid immersion cooling will also be used in most facilities in the sustainable data center market to reduce their impact on the environment and the PUE of data centers.
A tropical test bed is being tested in Singapore to make data centers more efficient in a tropical climate. If successful, this can also positively impact the Latin American market and further reduce the PUE of facilities.
Emerging Trends to Power Data Centers
Hydrotreated Vegetable Oil (HVO) Fuel is among the emerging trends concept in the sustainable data center market; however, in Latin America, data center operators didn't adopt this technology, but there is a development from some of the oil companies that are involved in the development of the HVO fuel stations, wherein it is witnessed that during the forecast period at least some operators will introduce HVO in their facilities.
Microgrids can be adopted by data center operators functioning in regions with an uncertain power supply due to natural disasters and power fluctuations.
Modern UPS systems are being innovated to be modular and occupy less space in facilities. It is expected that with a significant increase in data being generated and stored, low tolerance for downtime, and need for sustainability, lithium-ion adoption will increase significantly.
Government Push Toward Sustainability
The US Department of Energy announced a USD 42 million fund under the Advanced Research Projects Agency-Energy (ARPA-E) project to fund suitable companies working in high-performance energy-efficient cooling solutions for data centers.
Various Latin American governments, including those of Chile, Brazil, and Uruguay, are actively working toward increasing the adoption of renewable energy in the country, which is projected to support sustainable data center market growth.
The European Union is continuously working toward making energy consumption completely green with new laws and regulations. In recent meetings, the European Union decided to increase renewable energy share in the energy mix to more than 40% by 2030.
Carbon neutrality is a priority in the Middle East & Africa as governments invest heavily in renewable energy and climate mitigation programs to achieve it. However, research on carbon neutrality in the region is limited, particularly considering the effects of renewable energy, economic growth, and government efficacy.
The Middle East & Africa is one of the most vulnerable to climate change, with harsh temperatures, deserts, coastal ecosystems, and high levels of air pollution. As a result, the region is expected to take the lead in climate mitigation and adaptation efforts.
Given the growing concern about the APAC region's electronic trash (e-waste), authorities may implement measures encouraging the appropriate disposal and recycling of obsolete data center equipment to reduce environmental impacts.
Deployment of Modular Data Centers and Sustainable Materials Gathering Momentum
In North America and other regions across the globe, modular data centers are small, portable groups of components needed to supply data center capacities such as servers, networking environment, and storage. Modular data centers are great substitutes for traditional data centers. It is highly predictable, efficient, and flexible.
The cost of operating a modular data center costs around 30% less than a traditional data center facility.
The environmental impact of modular data center deployment is also lower since it entails less or no usage of concrete and can be constructed in a phased manner, eliminating the need for additional labor.
Plant-based and other sustainable materials such as wood, hemp, and Mycelium, which can revolutionize the construction process for data centers, are also being adopted by data center operators.
Modular data centers worldwide have shown themselves to be especially well-suited for scenarios prioritizing company flexibility, accelerated market entrance, or fulfilling unique operational objectives.
Electrical Infrastructure
Efficient and sustainable power infrastructure replacing traditional power systems supports sustainable data center market growth.
The increasing demand for efficiency in data centers has fueled the growth of efficient infrastructure such as Lithium-ion UPS systems, fuel cells, HVO, natural gas generators, nuclear energy reactors, and more.
Rolls Royce announced its plan to offer small nuclear reactors for US-based cloud operators such as AWS, Google, and Microsoft.
AWS will use HVO across all of its European data centers. It has already replaced diesel with HVO in Ireland.
Mechanical Infrastructure
Most companies have deployed free and zero-water cooling, leveraging the cold temperature across the regions.
In its Stockholm-based STO01 data center in Sweden, STACK Infrastructure has deployed indirect evaporative cooling for energy efficiency.
Innovative cooling techniques, such as underwater and floating data centers, bring in more efficiency in data center cooling.
Nautilus Data Technologies, which builds sustainable and floating data centers, has signed leases for a new 7.5 MW data center in Marseille, France.
Denv-R announced plans to launch floating data center facilities, which will be cooled by river water to decrease energy consumption and CO2 emissions.
General Construction
Hyperscale operators such as AWS, Microsoft, Apple, and Google are leading in using sustainable materials for data center construction, propelling the sustainable data center market.
Companies introduce technologies such as green concrete, modular data centers, and more in their data center construction.
AWS and American Rock Products collaborated to develop sustainable concrete for a concrete mix for its data centers.
Companies are investing in additional infrastructure like Aquifer Thermal Storage Systems to conserve heat.
District heating is prevalent in Europe, where data center firms transfer heat generated from data centers to nearby offices/residential places/swimming pools, and others.
Nordic countries are leading in developing district heating with data center firms.
Market Opportunities & Trends
Innovative Data Center Power Technologies
Adoption of Advanced Ups Batteries
Software-Defined Data Centers & AI in Power Monitoring
Microgrids
Sustainable Innovations in Data Center Power Technology
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