Business Analysis

Optimising data centres: A quest for sustainable and secure infrastructure

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As the world increasingly goes digital, the need for data centres increases (Screenshot via YouTube)

In the digital age, where information and connectivity are paramount, the demand for data storage and processing is surging to unprecedented heights.

As people and businesses increasingly rely on the internet, the need for efficient data centres has become more critical than ever.

One of the negative outcomes of Australia’s lost decade in energy preparation is the potential for a shortage of electricity. This could lead to policies that will force industries to reduce their energy use and this also can lead to electricity companies being unable to provide extra capacity to industries that are expanded or new industry plants that are going to be built.

The Australian Energy Market Operator has been sending out warnings along these lines for several years. Energy-hungry data centres are among those that are set to suffer from an overall lack of energy availability. In Europe, this is already leading to governments forcing data centres to operate only from certain locations.

They are now turning their attention to the strategic placement of data centres. By seeking dedicated sites near renewable energy sources and water-cooling facilities, countries in Europe are aiming to address environmental concerns, enhance security and meet the escalating data demands of modern society.

Several factors have converged to drive this strategic shift:

  • Escalating data demand: The proliferation of digital devices, IoT applications, cloud computing, and AI-driven technologies has led to exponential growth in data generation. As online activities continue to surge, data centres must be equipped to handle the increased workload.
  • Environmental consciousness: Data centres are notorious energy consumers, with their energy consumption often compared to that of small cities. The move towards renewable energy sources aligns with Europe's commitment to reducing carbon emissions and minimising environmental impact.
  • Cybersecurity imperatives: Data centres house vast amounts of sensitive information, making them prime targets for cyberattacks. Placing data centres in secure and strategically defensible locations can help mitigate these risks.

When deciding on the optimal location for these data centres, a range of factors is carefully weighed:

  • Renewable energy accessibility: Countries with abundant renewable energy sources, such as solar and wind power, offer a sustainable solution to the energy-intensive nature of data centres. Finland, for instance, derives 45% of its electricity from hydroelectric power, making it an attractive candidate for data centre establishment.
  • Water-cooling opportunities: The cooling of data centres is essential to prevent overheating. Nations with ample water resources, like Finland and Sweden, can leverage natural water sources for effective cooling.
  • Telecommunications infrastructure: Proximity to robust telecommunications networks ensures efficient data transmission, reducing latency and improving connectivity.
  • Cybersecurity readiness: Data centre security is paramount. Locations with strong cybersecurity measures and a track record of safeguarding digital infrastructure are favoured.
  • Geopolitical stability: The stability of a region's geopolitical environment influences the security and longevity of data centres. This factor becomes especially important in regions prone to political volatility.

Several European nations are proactively seeking dedicated sites for data centres.

With its renewable energy penetration and cold climate, Finland's attributes align with the requirements of data centres. Its hydroelectric power generation and cold temperatures make it an energy-efficient and climate-friendly option.

Another Nordic contender, Sweden, boasts a high reliance on renewable energy and is already home to prominent data centre operators like Bahnhof and Arelion.

As a data traffic hub in Europe, the Netherlands' robust telecommunications infrastructure and established data centre providers, such as Equinix and Interxion, make it a prime candidate.

Ireland's business-friendly environment, low corporate tax rate, strong legal system and advanced telecommunications network have made it a popular choice for data centre establishments.

Like its Nordic counterparts, Denmark is committed to renewable energy and is home to data centre operators like TDC.

The process of allocating dedicated sites for data centres is intricate and multifaceted, involving a delicate balancing act of factors. Some additional considerations include land and construction costs, regulatory frameworks, availability of skilled labour, and the political landscape.

Europe's strategic focus on data centre sites that are proximate to renewable energy and cooling solutions reflects a comprehensive approach to meeting data demands while safeguarding environmental sustainability and digital security. The factors shaping the selection process underscore the complexity of the decision-making process, where technological, environmental and geopolitical factors intersect.

As the digital landscape evolves, Europe's dedication to innovation, sustainability and security positions it at the forefront of optimising data centre infrastructure.

Paul Budde is an Independent Australia columnist and managing director of Paul Budde Consulting, an independent telecommunications research and consultancy organisation. You can follow Paul on Twitter @PaulBudde.

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