Questions like “why does a green data center investment make more sense today?” maybe you will hear it often. The answer is quite simple, namely because the data center is a giant power-sucking monster, which brings concern about the environmental impact.
Climate change, which is increasingly being felt worldwide, has brought awareness of environmental sustainability to a higher level than before. The data center is an industry that contributes 2% of carbon emissions globally.
In this article, we will explain why investing in a green data center makes more sense than investing in a conventional data center.
Why is Green Data Centers Investment More Attractive?
We all know that the cloud is rising, and we’re all experiencing its benefits. We can store data, access files, and transfer information whenever we need to, anywhere in the world. But there’s a hidden cost to this convenience: our energy consumption.
The cloud requires enormous data centers that use much power to keep them running 24/7. When these centers are shut down, they still use energy to cool the equipment inside them. So when you look at the carbon footprint of how much electricity the cloud uses, you don’t just see how much electricity the centers use when they’re up and running — you also see how much power is required for them to run in their “off” state.
That’s why more and more people are investing in green data center solutions — not just as a way to save money — but as a tangible way to reduce our carbon footprint and positively impact our environment.
Investing in a green data center included in the ESG investing category is a matter of morality. Not only for profit but for the sustainability of investment, investors are very interested in ESG investment. In the future, investments in data centers that do not use renewable energy are starting to be forgotten by investors worldwide.
The cost of data center electricity is exceptionally high.
The average cost of electricity in the United States is $0.12 per kilowatt-hour, which may seem reasonable. But that figure doesn’t tell the whole story: the U.S. has some of the cheapest electricity rates in the developed world, and many countries pay much more for electricity.
There will be 2450 data centers in the European region in 2022 (source). Most are in Germany, with 487 data centers. The cost of electricity in Europe has increased seven times since the war between Russia and Ukraine. Currently, the average electricity cost in Europe per 1 MWh is USD 260. In Germany, the average electricity cost is USD 205, which touched a record high in August 2022, namely USD 719.
Fortunately, a country rich in natural gas and geothermal resources, such as Indonesia, has many Green Data Centers. In addition to using energy sources that have reduced carbon emissions by up to 50%, data centers in Indonesia are also leading to using renewable energy.
Data centers in Indonesia are efficient due to the more neutral tropical climate. This condition will make it easier for the data center to increase the cooling system’s efficiency in all data center facilities.
These reasons are why green data centers in Indonesia are increasingly in demand by investors, operators and data center users.
Important things to consider for investors and data center operators
There are at least three things that need to be considered by investors and data center operators when they want to expand their data centers to other countries.
Government Policies and Support
The local government’s support of a data center is essential to consider as an investor or data center operator. The local government’s support can take many forms, and several significant benefits can result from working with the government.
The first benefit is that working with the government can help ensure stable, long-term business conditions for the data center. For example:
- A local government may agree to provide some tax abatement or another financial incentive to encourage the data center to invest in the area. In exchange for this, the operator would agree to maintain a certain number of jobs in the area, which could be especially important if other businesses depend on those jobs.
- A local government may offer added incentives, such as utility rate reductions or property tax abatements, to further incentivize a company to build its new data center in their community.
The second benefit of working with the local government is that it may provide a level of protection against future regulations that might make operating a data center more difficult.
As data centers continue to grow in number and size, there is an increasing need for a more efficient and renewable energy source. There are two options that the data center industry is currently looking into; wind turbines and solar panels. Wind turbines have a lot of positive aspects for the data center industry, but due to their lack of reliability, solar panels are a better option.
Before building a power plant sourced from renewable energy, which takes a long time to develop, you must consider the availability of a supply of electrical energy from natural gas, geothermal and other cleaner energies. It would be too grandiose if you want 100% renewable energy for a data center at this point. Remember, the Net-Zero pact aims to reduce carbon emissions by 50% by 2025 and 100% by 2050.
The IT world is constantly evolving, and you need to be sure that you stay updated with the latest innovations. This goes for both investors who might want to invest in new infrastructure and operators running data centers currently.
One of the main pieces of the IT infrastructure is the network, which connects from one hop to another. The availability of a fiber optic network is critical in setting up a data center.
The rapid growth of the cloud and social media has been accompanied by a parallel explosion in the amount of data generated and transmitted. As these digital technologies become embedded in our daily lives, the information stored on servers will continue to grow exponentially. Consequently, we must increase our investment in green data center technologies.