Sustainable Data Center Market - Global Outlook & Forecast 2023-2028

Sustainable Data Center Market - Global Outlook & Forecast 2023-2028

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.

KEY HIGHLIGHTS

• 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.

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.

SEGMENTATION INSIGHTS

A large data center with 100 racks and rack power density of 35 kW will have approximately 30.7 million kW/year of energy used over a year. With a 10% reduction that it will generate by using newer components and servers, the data center can save up to 3.1 million kW. The reduction will also help the data center operators reduce the OPEX due to reduced power bills and a significant reduction in GHG emissions.

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.

GEOGRAPHICAL ANALYSIS

Western Europe and the Nordics Lead the Race for Renewable Energy Adoption

• 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.

Segmentation by Geography

• North America
• The U.S.
• Canada
• Latin America
• Brazil
• Chile
• Mexico
• Colombia
• Rest of Latin America
• Western Europe
• UK
• Germany
• France
• Netherlands
• Ireland
• Switzerland
• Other Western European Countries
• Nordics
• Sweden
• Denmark
• Norway
• Finland & Iceland
• Central & Eastern Europe
• Poland
• Other Central & Eastern European Countries
• Middle East
• UAE
• Saudi Arabia
• Other Middle Eastern Countries
• Africa
• South Africa
• Other African Countries
• APAC
• China & Hong Kong
• Australia & New Zealand
• India
• Japan
• South Korea
• Rest of APAC
• Southeast Asia
• Singapore
• Indonesia
• Malaysia
• Other Southeast Asian Countries

VENDOR LANDSCAPE

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 Company Profiles

• Africa Data Centres
• Airtel (Nxtra Data)
• AirTrunk
• Alibaba Cloud
• Aligned Data Centers
• Amazon Web Services (AWS)
• American Tower
• Apple
• AQ Compute
• Atman
• atNorth
• Big Data Exchange (BDx)
• CDC Data Centres
• Chayora
• China Telecom
• Chindata Group
• CloudHQ
• Cologix
• Colt Data Centre Services (COLT DCS)
• Corscale Data Centers
• Compass Datacenters
• CtrlS Datacenters
• CyrusOne
• Cyxtera Technologies
• Data4 Group
• DataBank
• Digital Edge DC
• Digital Realty
• EdgeConneX
• Equinix
• Flexential
• GDS Services
• Global Switch
• Google
• Green Mountain (AZRIELI GROUP)
• GreenSquareDC
• Gulf Data Hub
• HostDime
• Huawei Technologies
• Iron Mountain
• IXAfrica
• Keppel Data Centres
• Khazna Data Centers
• KIO Networks
• Kao Data
• Lumen Technologies (Cirion Technologies)
• Meta
• Microsoft
• Moro Hub
• Nautilus Data Technologies
• Netia
• NEXTDC
• NTT Global Data Centers
• Novva Data Centers
• OneAsia Network
• Oracle
• Orange Business Services
• OVHcloud
• Penta Infra
• Princeton Digital Group
• QTS Realty Trust
• RackBank
• Raxio Group
• Rostelecom Data Centers
• Sabey Data Centers
• Scala Data Centers
• Serverfarm
• Sify Technologies
• SpaceDC
• STACK Infrastructure
• ST Telemedia Global Data Centres
• SUNeVision Holdings
• Switch
• T5 Data Centers
• Telehouse
• Tencent Cloud
• Tenglong Holdings Group
• Vantage Data Centers
• VNET Group
• Yandex
• Yondr
• Yotta Infrastructure

Renewable Energy Providers

• ACCONIA Energia
• Adani Green Energy (AGEL)
• AGL
• Algonquin Power & Utilities Corp.
• AMP Energy
• Apex Clean Energy
• Avaada Energy
• Better Energy
• Bryt Energy
• Conrad Energy
• Datafarm Energy
• DE Shaw Renewable Investments
• Distributed Power Technologies
• Dominion Energy
• EDF Renewables
• Eneco
• Enel Group
• Engie
• ERG
• Faro Energy
• GreenYellow
• HDF Energy
• Iberdrola
• Ilmatar Energy
• Leeward Renewable Energy
• Lightsource bp
• MC Retail Energy
• MP2 Energy
• Neoen
• NextEra Energy
• NTR
• Ørsted
• Pacific Gas and Electric Company
• Pattern Energy
• Renantis
• ReNew Power
• Rocky Mountain Power
• RWE Renewables
• RZK Energia
• ScottishPower
• Shell
• Shizen Energy
• Simply Energy
• Solar Alliance
• Sunseap Group
• The AES Corporation
• Torch Clean Energy
• TotalEnergies

KEY QUESTIONS ANSWERED:

1. How big is the sustainable data center market?

2. What is the growth rate of the global sustainable data center market?

3. What are the key trends in the sustainable data center market?

4. Which region holds the most significant global sustainable data center market share?

5. How many MW of power capacity is expected to reach the sustainable data center market by 2028?