International Data Centre Day 2023: Energy Procurement in the Data Centre Industry (Guest blog by VIRTUS Data Centres)
Energy procurement in the data centre industry is critical to ensure that providers can operate efficiently and sustainably. It involves the process of procuring the required volumes of energy from the various sources available such as renewable energy, natural gas, coal, and nuclear. The goal is to find the most cost-effective and sustainable energy source to power data centres, to benefit data centre customers, operators and plant, whilst being environmentally responsible.
This is an important task for data centre operators because it determines the overall cost and carbon footprint of the facility. In recent years, there has been a growing awareness of the need for sustainable energy, as the world faces the twin challenges of climate change and dwindling resources. This has put pressure on data centres to improve efficiency and in doing so, reducing their energy consumption and carbon footprint.
Energy procurement is also important for commercial reasons. As data centres continue to grow in size and complexity, they are consuming more energy. This has led to facilities’ rising energy expenditure, which can have a significant impact on the provider’s bottom line, and the cost to the customer. By choosing a sustainable energy source, data centres can reduce their energy costs and increase their competitiveness in the marketplace.
Power Purchase Agreements (PPAs) are becoming popular in the industry. These agreements involve data centre companies committing to buy a certain amount of energy over a set period of time, directly from a renewable energy provider. This helps increase the availability of renewable energy on the market and supports the growth of sustainable energy generation.
As data centres consume a significant amount of energy, it is essential for providers to choose an energy supplier that can provide power at a cost that makes commercial sense whilst ensuring energy security to keep data centres operational 24/7. Additionally, with an increasing focus on sustainability, it’s important to consider the environmental impact of the energy source and the supplier's commitment to reducing carbon emissions.
Properly managing energy procurement can help data centre providers to reduce costs, improve the reliability and quality of their energy supply, and reduce their environmental impact. It is also becoming increasingly important as companies aim to meet their own sustainability goals and comply with regulatory requirements. Energy procurement is also an opportunity for data centre providers to support the growth of sustainable energy generation.
Overall, energy procurement is a multi-faceted process that requires careful consideration of both commercial and environmental factors. Following a structured and informed approach can ensure that data centre providers make informed decisions that will benefit their business, customers and the environment.
By understanding energy consumption and location, conducting a thorough evaluation of suppliers, negotiating a contract that works for you, and continuously monitoring and reviewing, data centre operators can ensure that they are procuring energy from the most cost-effective and sustainable sources. This will help them reduce their energy costs, increase their competitiveness in the marketplace, reduce their carbon footprint and support governmental net zero targets.
Join us at our next techUK webinar: What the new Minimum Energy Efficiency Standards (MEES) mean for your commercial properties. For the past few years, energy efficiency is becoming a focal point for businesses and policymakers. This includes the Minimum Energy Efficiency Standards (MEES), which since 2018 has regulated new lettings of commercial properties based on buildings’ Energy Performance Certificate ratings. Join techUK, legal counsel from CMS and CBRE for this one-hour webinar to learn how the changes to MEES might affect you, what are the exemptions, compliance and enforcement of MEES, and what this means for the letting of commercial properties for industries such as data centres. Learn more here.
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Authors
David Watkins
David Watkins is the solutions director at VIRTUS Data Centre, heading up the Solutions Team working with customers to provide customised solutions. He has been at VIRTUS since 2009, where he has previously held the roles of Service Delivery Director and Head of Operations. David has a technical and commercial background and can often be found speaking about sustainability at data centre industry events as well as authoring articles on the topic, which he is passionate and knowledgeable about. Prior to joining VIRTUS, David spent more than 15 years at Unisys. His last role with the company was Head of Data Centres UKMEA.
