The construction of new data centers in the UK and Europe is being delayed due to insufficient electricity supply. U.S. utilities are also struggling to keep up with demand.
David Sleath, chief executive of developer giant Segro, said he would ideally invest “hundreds of millions and more” in building new data centres, The Times reports. “The single biggest obstacle is access to power,” he told the publication.
Segro, which operates 35 UK data centres, had to wait “several years” for infrastructure upgrades that will increase grip capacity before breaking ground on planned construction.
A National Grid spokesman told The Times it was connecting data center developments to the grid “as quickly as possible”, while a government spokesman said efforts were underway to move stalled projects forward. The spokesman added that National Grid was working with energy regulator Ofgem to update the grid connection process.
Power shortages are a major concern for data center companies around the world, including North America, as they struggle to secure capacity. A report by Bain and Company found that U.S. utilities would need to increase their energy production by as much as 26% above their 2023 total to meet projected demand in 2028.
According to the Electric Power Research Institute, data center energy consumption in the US will more than double by 2030.
Sleath added that the problem is in its infancy in the UK but is gaining importance as the government seeks to make the country technologically competitive with the US and China – a vision of a “UK success story”.
Indeed, there is evidence that the country’s technology sector is currently stagnant. The research revealed that this year the number of tech startups based in the UK suffered the first “significant decline” since 2022. Only 11,368 new technologies were incorporated in the third quarter of 2024, compared to 13,073 in the first quarter — an 11% year-on-year decrease.
SEE: UK government announces £32m for AI projects
The UK sees data centers as critical, piling pressure on the network
Demand for data centers is skyrocketing worldwide to facilitate AI training and the expansion of cloud services that host the models. In September, the government announced that data centers are now considered critical national infrastructure.
The government mentioned that the change was made to help increase the country’s security as they become increasingly important to the smooth running of essential services, as demonstrated by the CrowdStrike outage in July.
However, according to Ishmael Burdeau, the civil servant responsible for the government’s Net Zero strategy, it also means planning restrictions around their development have been relaxed so more can get the green light.
According to the Register, he said the designation allows the government to “overwhelm local opposition to data centers,” which is generally based on their energy and water consumption, noise and environmental destruction.
Shortly afterwards, the government announced that four US technology firms had committed to invest £6.3bn in UK data centres, providing the country with the “necessary infrastructure to train and deploy next-generation AI technologies”.
SEE: Microsoft bets big on UK AI with $3.2 billion investment
Energy demands could defeat Europe’s environmental goals
Failure to meet data center electricity demands could spell doom for the environment. A Morgan Stanley report in September suggested that the device would generate 2.5 billion tons of carbon by the end of the decade, three times more than if the AI generative boom had never happened.
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In July, Google revealed that the expansion of its data centers to support the development of artificial intelligence contributed to the company producing 14.3 million tons of carbon dioxide equivalents in 2023. This represents a 48% increase compared to 2019 and a 13% increase from 2022.
The EU aims to reduce the region’s greenhouse gas emissions by at least 11.7% lower than projected in 2020 by 2030, in addition to becoming climate neutral by 2050. However, these goals may well be thwarted; a report published by McKinsey this week found that demand for barns in Europe will triple by 2030, increasing their share of total energy demand in the region by 3%.
Like the UK, Europe faces challenges when it comes to generating the electricity that data centers need.
“These include limited sources of reliable energy, sustainability concerns, insufficient upstream infrastructure to access power, problems with land availability, a shortage of power equipment used in data centers, and a shortage of skilled electrical professionals to build equipment and infrastructure,” McKinsey analysts wrote. .
Data centers don’t just need electricity to power the servers, but a significant amount of energy also goes into cooling systems to manage the heat generated by the dense hardware. AI chips generate even more heat because they require extreme computing power, so designers are asking equipment suppliers to lower the temperature of the water used for cooling.
Michael Winterson, chairman of the European Data Center Association, told CNBC this week that lowering the water temperature will “fundamentally drive us back to the unsustainable situation we were in 25 years ago.”
Data centers may not be completely transparent when it comes to their energy consumption
There is evidence that data center operators do not account for all the energy they use in their sustainability reports, meaning that the energy consumption and total emissions that analysts calculate may be on the conservative side.
Emissions from data centers owned by Google, Microsoft, Meta and Apple are likely to be 662% higher than officially reported, according to The Guardian. This is largely due to renewable energy certificates and carbon offset schemes, which allow companies to claim they are using renewable energy when they are not. Additionally, a report from the Uptime Institute found this out less than half of data center owners and operators track metrics such as renewable energy consumption and water consumption.
Scott Lane, CEO of ESG intelligence firm Speeki, agrees that hyperscalers could keep the true energy demands of their data centers under wraps. In an email to TechRepublic, he said, “One of the most striking trends I’ve come across is how many companies are unaware of their data center provider’s ESG and sustainability metrics. It’s not just about energy consumption. This applies to all areas of data center operations, from carbon emissions to e-waste.
“If data center operators are not transparent with their clients, then I think it’s possible that publicly available energy reports may not represent the full picture.”
Furthermore, if Europe as a whole falls short of its emissions targets, neither will individual businesses in the region. Lane added: “Without complete visibility into the energy consumption, emissions and environmental impact of data centers, businesses risk compromising their corporate sustainability commitments. For years, large companies have invested in reporting on their physical supply chains to understand their ESG standards; Now they will need to do the same for their IT supply chains as third-party data centers become integrated into the core operations of every business, regardless of their sector.
“We’re right at the starting line of the data center craze, and we don’t know where the finish line is or how costly the journey will be.”