Energy consumption and green electricity

The Nordic Region is privileged in that we can use green electricity to a great extent given our access to wind and hydropower. However, with the increasing use of technology, more international data centres being located to Sweden, and the introduction of electric vehicles, the need for electricity is increasing at a rate that currently requires us to purchase electricity sources that are less green. How can you reduce your electricity consumption? Can you contribute to the power grid with self-produced electricity? How can you affect the amount of green electricity in the power grids in other countries? That’s what we try to figure out in this section. 

Good questions to ask oneself

  • Do you measure how much energy your IT environments consume?
  • Do you buy green electricity?
  • Do you demand that your suppliers buy green electricity?

The expert's insights into data centers and energy

Datacenters are the factories of the IT industry, where a large amount of information is received, stored, managed, and processed before being distributed to users. The input necessary to power data centers is electrical energy, and it requires significant amounts of it. The electricity consumption in data centers is estimated to approximately 300 TWh per year (A. Andrae), which is slightly more than 1% of the global electricity demand. To put this into perspective, it is equivalent to the electricity generated by 34 nuclear reactors the size of "Forsmark 1" (approximately 1000 MW) operating at full capacity, all year round. 

The digitalization and the resulting exponentially increasing amount of information are driving the need for more data centers, both large and small. In an anticipated scenario, global electricity consumption in data centers is projected to increase by more than 3 times by 2030 (974 TWh/year). The data center industry is thus emerging as one of the largest consumers of electrical energy worldwide. 

Digitalization and the climate issue are two strong megatrends that many boards of directors and executive teams prioritize. Is there a contradiction between these two trends? The answer to that question is both yes and no. Digitalization undoubtedly provides fantastic opportunities to reduce the carbon footprint in various industries. However, it is important to not forget that it also requires resources, such as increased electricity demand in data centers, which can undermine part of the climate effort. 

What can be done to address this contradiction between digitalization and reduced carbon footprint?  

Digitalization is likely something that most of us cannot or do not want to slow down, leaving us with the question of what businesses or users can do to reduce the carbon footprint of data centers. This question is not straightforward, because the carbon footprint depends on various factors, such as where data has been processed for different types of cloud services or how much energy has been used for your specific operations.  

The data center industry is relatively new and therefore, in many respects, still unregulated and non-transparent. Unlike other more established energy-intensive industries, there are no binding regulations for consistent measurement and reporting of energy and environmental performance. Data center operators have the discretion to determine how they measure, calculate, and report their energy and environmental performance. Consequently, there are multiple messages about data centers depending on the source, which can easily create an impression that the industry is either better or worse than it actually is. 

Companies and consumers have an important responsibility as buyers and users of cloud and data center services to demand transparency and reporting on traceability, energy, and climate impact from data centers. This is likely the fastest path to change, where customers begin to demand data center and cloud services from a sustainability perspective.

Presentation of Staffan Stymne

I have had the privilege of dedicating a significant portion of my career to energy issues. I have worked in operations, industry associations, market development, biofuels, production, strategy & development, and served 14 years on corporate management teams. Most notably, my career has been shaped by district heating and cooling, which are remarkable innovations for the environment and climate.

The core business model of district heating is built around a systems approach that aims to capture and utilize energy flows that would otherwise be wasted by distributing surplus energy to those with a deficit. Some examples of how we utilize surplus energy include heat from electricity production, residues from forestry and sawmills, various types of waste, heat from wastewater, and cold from lake bottoms. It is largely thanks to district heating that Sweden possesses an energy system with low dependence on fossil fuels. It is therefore difficult not to appreciate the advantages of district heating.  

Recently, I took the leap to leverage my experience in energy and systems thinking by becoming actively involved in the transition as an entrepreneur. My vision is to transform the data center industry through a circular energy mindset, significantly reducing data centers' carbon footprint. To me, today's data centers can be likened to highly inefficient energy facilities, and I aim to change that through my company, T.Loop. 

Checklist: 5 Initiatives to begin with

 Contact your current or potential data center or cloud service provider and ask questions. Here are a few tips: 

Do not settle for vague information such as:

  • "We exclusively utilize green and environmentally certified electricity for our data centers"  
  • "We have heat recovery from our data centers"

Instead, focus on energy facts, such as: 

  • How much electrical energy do you supply to your data centers? 
  • What percentage of the supplied electrical energy is utilized by the IT equipment, specifically the servers? 
  • How many of your data centers have heat recovery? 
  • How much heat do you recover annually? 
  • What is the actual energy mix in the country or region for your data centers? 
  • How do you approach energy efficiency in your operations? 

Compare the actual energy and climate performance of different suppliers. It is important to note that green or environmentally certified electricity is now a baseline requirement and cannot be solely relied upon for evaluating energy efficiency or the true carbon footprint of the organization. 

Assign an economic value to the energy and climate performance and incorporate it into your business decision-making process. 

Consider incorporating the principle of proximity in your decision-making process. The transfer of information also requires energy. A data center located near you is likely to have a lower carbon footprint than one situated farther away. 

Personal Reflection by Staffan

In recent years, energy companies have become increasingly interested in the so-called prosumer market. This refers to customers who possess surplus energy or production resources that can be made available to the energy system.In the electrical industry, there is often a discussion surrounding customers' solar panel systems that can feed excess electricity back into the grid.  

In my most recent role as Strategy and Development Manager at Norrenergi, a district heating company in northern Stockholm, we enthusiastically embraced the opportunity and challenge at hand. It quickly became apparent that data centers in our market area had the greatest potential to contribute surplus heat to our district heating system. This existing market is expected to experience significant growth. Through our development work in creating a heat recovery concept for data centers, I gained several insights. Data centers hold immense potential for energy efficiency and energy recovery. They are poised to become major players in the energy sector. The demand for computing power, and therefore the amount of electricity consumed and heat produced, is expected to grow significantly in the next decade.   

I also realized that there is low-hanging fruit to be picked here. In my world, I was used to constantly striving to optimize the energy process, often through making minor adjustments in technology or operations. Suddenly, a whole new energy area opened up where a relatively simple technology shift from air to liquid cooling could potentially increase efficiency by about 30% in one go. Additionally, all heat should be recoverable instead of being wasted through ventilation. Furthermore, there are significant untapped energy resources in the form of batteries and backup power. One realization was that I will likely make a greater impact in the data center industry than in the energy industry in bringing about a real change, and I am now convinced that data centers can become a future energy asset for our society instead of a burden, provided we approach it in the right way. 

Articles and reports on energy

Digitalization and energy consumption. Does ICT reduce energy demand?

Vetenskaplig artikel Lange, S., Pohl, J., & Santarius, T. (2020). Digitalization and energy consumption. Does ICT reduce energy demand?. Ecological Economics, 176, 106760. artikel)

New perspectives on internet electricity use in 2030

Andrae, A. S. (2020). New perspectives on internet electricity use in 2030. Engineering and Applied Science Letters, 3(2), 19-31.