In the digital age, we rely on data more than ever before. But the data centres that store that information are incredibly power hungry.
Around four per cent of Australia’s total energy use is spent on data centres, according to the Australian Energy Council.
Emissions from their operational energy use are embodied throughout the economy, including in sectors such as property and finance.
So what are some of the obstacles the sector faces in reducing emissions, improving sustainability, and switching to renewables? And what steps is it taking to overcome these hurdles?
To answer these questions, The Fifth Estate reached out to Simon Guzowski, who is the ESG (environmental, sustainable, governance) and investor relations manager at one of Australia’s leading co-located data centre companies, NextDC.
The company has notched up some impressive sustainability milestones to date.
For example, the firm’s M1 Melbourne data centre became the first of its kind in Australia to secure a 5-star NABERS rating. The massive solar array at the facility has generated close to 2.2 million kWh of electricity since it started operating.
Since 2021, it’s offered its customers 100 per cent carbon neutral offsets through a program called NEXTneutral, which is certified under the federal government’s Climate Active program.
But the firm faces some big challenges, including in its mission to use 100 per cent renewable power by 2030. And, with the need to support server racks that literally weigh a tonne, there’s some heavy engineering to come in the years ahead.
Why are data centres so critical for net zero?
First: why do data centres use so much power?
Imagine, for a moment, you are the chief information officer or the chief data officer for a large enterprise – such as an ASX-200 company, a major government department, or a university.
We’re talking about the biggest organisations in the country here: the big four banks; major telcos such as Telstra and Optus; large government departments such as Australia Post or the Australian Tax Office; large tech companies; or national retailers including Coles and Woolworths.
Your organisation is responsible for storing an immense amount of data. For an organisation such as the ATO, that would include the entire tax records of every person and company in the country.
You also need robust core business software to process and maintain that data in real time.
For one of the big four banks, for example, that means updating that data in real time whenever anyone, anywhere in the country, makes a transaction.
That means every time someone makes a withdrawal at an automatic teller, purchases something online with their credit card, buys something at a shop, pays a bill, runs payroll, transfers funds to another account. And all of these transactions need to be digitally stored in real time.
As you can probably imagine, storing all this data and running these core business software takes an immense amount of computer equipment.
That means racks and racks full of servers, hard disks, and networking equipment.
This IT infrastructure uses an immense amount of power. It also generates a massive amount of heat. (If you’ve ever felt a laptop get warm on your lap, just imagine how hot a thousand servers sitting side-by-side would get!) And this heat takes a lot of power to cool.
What’s a colocation provider and why do they matter?
So where does all that computing and networking equipment typically stored?
For a large enterprise, there’s basically two places you can store all this IT infrastructure.
The first is on your own premises (known as “on-prem” in the IT industry). The second is in a warehouse-sized industrial-scale data centre that’s shared between multiple organisations – a co-location facility.
In Australia, only a handful of companies own and operate these co-located data centres, and one of the largest of these providers is NextDC.
The company has data centres in every mainland capital in Australia, including two each in Brisbane and Perth, three in Melbourne and four in Sydney.
What challenges do colocation providers face on sustainability?
Improving the energy efficiency of existing co-located data centres, and reducing their emissions, poses some unique and often difficult engineering challenges.
First, given that multiple organisations can in some cases share one data hall, co-location providers have to meet the cooling and humidity needs of the strictest customer.
“Say you have just one customer in a data hall that has very strict temperature and humidity requirements. You have to run the whole data hall at that level. That’s something we know all of our peers face as well,” Guzowski says.
Second, the racks of server equipment in data centres are incredibly heavy. In fact, they can weigh up to 1.5 tonne. Each.
“If you think of a residential building or an office building, you’re generally supporting a few laptops, screens, phones and people, it’s not that heavy,” Guzowski says.
“If you have row after row after row of these racks, which could weigh up to 1.5 tonnes each, the structure just needs to be incredibly strong.”
This weight means that data centre buildings need to be specially engineered for the task. While maintaining this existing load, the structure needs to be able to support any additional weight from – for example – solar arrays, batteries or additional cooling systems.
Third, even if a data centre building has been designed to support the extra weight of a large photovoltaic array, there are other important things that also need to go on the rooftop. That includes cooling and communications equipment.
“As a data centre is filling up, we tend to have to add more and more cooling gear onto the rooftop. Sometimes some people need some sort of satellite communications on the roof,” Guzowski says.
“But as soon as the data centre’s filled, we can put solar arrays on the rooftop. So our Melbourne M1 data centre, when that solar facility was installed, was actually the largest private solar installation in the country at that time.”
Finally, data centres are so incredibly power hungry. That means that even a big solar array on the rooftop doesn’t solve the whole problem by itself. The remaining power needs to be purchased off the grid.
While NextDC has set a target to use 100 per cent renewable power by 2030, procuring enough renewables at the moment remains a challenge.
“We’re finding for a lot of renewable energy providers, it’s more profitable to sell into quite a high spot market at the moment that they’re reluctant to sign long term PPAs.
“But we’re quite confident we’ll be able to secure supply in the future in terms of wind, solar and even battery solutions.”
So how are colocation providers solving these engineering challenges?
Given energy use is a major source of emissions – and costs – for the data centre industry, it should come as little surprise that energy efficiency is a big focus for improving sustainability.
“Our engineering team spends a lot of time squeezing every bit of efficiency they can out of our data centres. Our data centres are the most efficient in Australia in terms of electricity usage, so they’ve done an incredible job on that front,” Guzowski says.
For example, in the new M3 data centre the company is building in Melbourne, it is installing multi metre tall extractor fans to reduce its reliance on industrial cooling systems.
“When the temperature conditions in Melbourne are right, we can filter that outside air and push it through the data hall, which is just extremely cost efficient and energy efficient,” Guzowski says.
A cutting-edge technology the company is already offering at its S2 data centre in Sydney is support for more energy efficient liquid immersion cooling.
“Some of these liquid cooling techniques and immersion cooling techniques are extremely efficient, they’re an order of magnitude change in terms of energy efficiency,” Guzowski says.
“We’re tending to see customers who are really interested in very high intensity computing, are now looking at these liquid cooling and immersion cooling technologies. As they become more widespread, I think they’ll make a really substantial difference in terms of energy efficiency.
“We’re making sure our buildings have the flexibility to support liquid immersion cooling in the future. So when clients are comfortable using those technologies and want to adopt them, they can.”
Another strategy the company is using is to encourage its clients to accept less strict temperature and humidity specifications for their equipment.
“Computing gear is getting more robust, and we believe that there’s room to become less stringent on some of the temperature and humidity requirements,” Guzowski says.
And while the company’s 100 per cent renewable power by 2030 target is still very much a work in progress, it is offsetting emissions from its own operations, and offering to do the same for its clients, through a program called NEXTneutral.
The credits are Climate Active certified, and sourced through Qantas Our Future Planet program.
“We’ve 100 per cent carbon offset all of our corporate operations, and now we’ve opened up that capability to our clients.”
Clients can log in and with a click of a button, subscribe to NEXTneutral, which will monitor all of their energy usage, and then match that to the appropriate amount of carbon offsets.
“We often get feedback that the IT gear sitting in a NextDC data centre was the easiest part of their entire process in terms of offsetting carbon emissions.”