As this week’s back-to-back pair of entity-level deals valued in the 11-figure range make clear, data centers are a growth sector. Driving demand in the sector is “the IT transformation of large companies, government agencies, healthcare, education, and anyone else requiring an online presence,” accelerated by the rise of remote work during the pandemic, Cushman & Wakefield reports. With anywhere from 3 to 4 gigawatts under construction globally at any given time, the growth is fueling concerns about sustainability at the local level.  

“Certain primary data center markets have instituted moratoriums on further large-scale development while renewable energy and/or alternative locations are found for heavy workloads,” writes Cushman & Wakefield’s Kevin Imboden in a new report. Singapore, for example, has been under an unofficial moratorium on development since 2019, only allowing pre-approved projects or small-phase construction to continue as planned.  

“This has created an array of other activities in-market, with industry and university partnerships to develop greener data center technology and further connectivity options to benefit those existing workloads,” the Cushman & Wakefield report says. Similarly, in Amsterdam, the industry is looking at “far-flung exurbs or other cities entirely” for deployment of data center deployment, due to concerns about the impact on Amsterdam’s power grid. 

Meanwhile, Cushman & Wakefield says in a market report on Amsterdam, the city has been serving as a hub for the development of further technical efficiencies in the data center environment, “from the reuse of waste heat to water cooling.” 

Water usage is another concern as the largest data centers can utilize millions of gallons of water for cooling. Desert areas—such as Phoenix and Las Vegas in the U.S. and Queretaro in Mexico—may be limited in their future data center deployments “unless air cooling during the night or liquid cooling directly to the rack can be used instead,” the report says. “Excessive heat can limit server life, so continued optimization of cooling systems is an imperative moving forward.”  

The data center industry is aware of the sustainability issue, and is taking steps to address it. “The largest hyperscale cloud services have formed plans to be carbon neutral, with many aiming to do this by 2030,” Imboden writes.  

In turn, data center occupiers with their own corporate plans for going carbon neutral are pressing operators to source renewable energy and derive operating efficiencies to lower overall power usage. “Operators have responded in kind, and many of the largest now publish public reports explaining their energy mix and efficiency goals.”