Digital transformation has had a turbo boost in the last few years as the adoption of AI technologies has become more widespread. The use cases are exponential and with the global artificial intelligence (AI) market size accounting for USD 638.23 billion in 2024 and expected to reach around USD 3,680.47 billion by 2034, this trajectory will only continue.
AI can undoubtedly have a positive impact on many industries, from performance simulation in the motor industry, in financial services for market analytics or credit scoring or for optimizing supply chains and productivity in manufacturing. More recently AI is being used to personalize customer experiences or for virtual shopping in the retail industry – not to mention the recent focus on generative AI which can create new content such as text, videos or music.
Many companies are embracing these technologies to streamline processes and increase efficiency, to garner in depth customer insights and to ensure accurate reporting. These factors undoubtedly contribute to business success.
But at what cost?
Every single digital activity starts a process in a data center, even simple everyday tasks like online banking, sending emails or scrolling social media. With the increased usage of AI technologies, data centers are now required to process enormous data sets and as a result the demand for data center capacity has risen exponentially.
The AI energy crisis
Data centers house the IT infrastructure necessary to process digital activity and so as digitalization continues, the amount of infrastructure needed is growing. For AI technologies in particular the computer equipment needed is vast and the amount of energy required to power and cool this is colossal.
Goldman Sachs Research estimates that data center power demand will grow 160% by 2030. At present, data centers worldwide consume 1-2% of overall power, but this percentage will likely rise to 3-4% by the end of the decade.
This rapid growth in demand is not sustainable. In some parts of the world there simply isn’t enough power available on the national grid to enable the connection of more data centers. Ireland, for example, has placed a moratorium on new data centers being built in Dublin until 2028 and in West London a number of housing projectswere put on hold for potentially a decade due to data centers using the local electricity capacity.
Many hyperscaler businesses such as Oracle, Microsoft and Amazon Web Services (AWS) have announced that nuclear facilities will be used to power some of their data centers – such is the severity of the demand.
Awareness of this power struggle is beginning to become more widespread but there is of course a more obvious factor that enterprise businesses will be aware of – and that is the cost of running these technologies. Whilst electricity prices in the UK have stabilized in the last year, the sheer amount of power needed, elicits a huge financial burden on data intensive industries which has pushed the responsibility from IT departments to senior leadership teams.
Legislative and environmental pressures
At the same time, sustainability measures which had traditionally been an optional activity will now be compulsory for many businesses as a result of more stringent ESG legislation.
The EU’s Corporate Sustainability Reporting Directive (CSRD) requires mandatory carbon footprint disclosures. Similarly, the updated Energy Efficiency Directive in the EU requires data centers to report on the Power Usage Effectiveness (PUE) of their sites.
These figures are published publicly in a similar way to annual corporate accounts which will undoubtedly influence client and investor relations – bringing business sustainability to boardroom level. To remain competitive, businesses will have to carefully consider their carbon usage and specifically their IT footprint as digitalization continues to increase.
There are other environmental concerns too. Google’s plans to build a second data center in Quilicura, Chile required the extraction of 50 liters of water per second from underground wells — more than 1 billion liters per year – as the country faces significant drought.
Both Europe and the United States have regions where water supplies are occasionally limited by rationing measures such as hosepipe or car wash bans and with global temperatures continuing to rise this is a situation that is likely to increase in severity as time goes on.
On a more local level, agriculture industries, communities and environmentalists alike are protesting against the loss of greenbelt land, the belief that a data center will increase local traffic or noise or indeed the general appearance of the data center building themselves.
But what if there was a solution in data centers that addressed the need for increasing high performance infrastructure and significantly benefited the areas in which they are located?
Sustainable Infrastructure
The data center industry is expanding exponentially but with the negative impact of data centers becoming more well known it is not acceptable to continue on this trajectory without trying to mitigate – if not reverse – the effect these sites have on their surroundings.
At atNorth, we are ahead of the curve of this trend having been building sustainable data centers for many years. The Nordic region has an abundance of low cost, renewable energy, excellent connectivity and available land and our sites are responsibly sourced and built using a modular approach out of the most sustainable materials possible – such as the laminated wood product Glulam. Neither do our data centers use water from nearby waterways or generate polluting wastewater that cannot be directed to municipal sewer networks.
Data centers located in cooler climates like the Nordics can forgo the need for power hungry air conditioning units and can also implement highly energy efficient infrastructure cooling techniques that essentially enable customers to decarbonize their IT workloads. Whilst this is an attractive factor for clients in terms of meeting new carbon reduction targets it also has a significant financial impact. For example, atNorth client Shearwater Geoservicessuccessfully moved a portion of its IT infrastructure equipment to one of our Icelandic sites resulting in a 92% reduction in CO2 output and an 85% reduction in cost.
The region also champions circular economy principles so that data centers fitted with heat reuse technologies like atNorth’s sites that can recycle excess heat from the cooling process in collaboration with local energy providers for use as heating and hot water for thousands of local homes.
The data center ecosystem
These factors go some way to alleviating the environmental concerns around data centers but the data center industry must do more and actively support the community and economy as a whole. atNorth’s vision is “more compute for a better world”, where data centers are pivotal to self-sustaining, thriving economies, where a commitment to environmental sustainability, energy efficiency, and community integration is paramount – in short a data center ecosystem that is at the very heart of society.
Data centers are a long term investment and provide excellent career opportunities for the duration of their lifecycle. From construction workers during the initial build and any subsequent refits, electricians and facilities personnel to mechanical and network engineers. In order for these sites to be truly integrated into local society they need to recruit locally – over 90% of the workforce used for the development of atNorth’s ICE03 site in Iceland were local to the area. atNorth actively supports local education authorities and has recently donated a large amount of mechatronics equipment to the Vocational College of Akureyri to assist in the training of local people for data center related roles. Of course, with any large employer there is a knock on effect on demand for other local amenities such as cafes, restaurants, shops and hotels, businesses that can support the local economy as well as local employees. Whilst there may be some disruption to communities associated with any large scale building projects in terms of construction traffic or noise, we believe that data centers can be designed sympathetically to their surroundings and even include on site reforestation projects to further mitigate their ecological impact.
Power availability, arguably the biggest limiting factor in the data center industry, must also be considered at the data center design phase to enable active support of national grid infrastructure. For example, data centers can support national grids through dynamic load management whereby non critical tasks are carried out at off peak times to help balance the supply. It is also possible to quickly adjust their power consumption or generation in response to fluctuations in grid frequency by way of Fast Frequency Reserve (FFR) options and this helps stabilize the available power supply from the local grid. Also, data centers can store excess energy in their backup battery systems when the grid is abundant and feed it back during high-demand periods. This will be pivotal to maintaining long term power availability as digitalization increases.
atNorth hopes to go even further than this an attract sustainable power production to the vicinity of its new sites such as wind or solar farms to ensure the availability of clean energy long term. It is part of the blueprint of atNorth’s reference data center design as we continue to adapt and innovate to achieve operational excellence.
There are other ways in which data centers can support the area in which they reside. In the Nordics for example, a lot of fresh produce is imported due to an unsuitable climate for growing fruit and vegetables. Our DEN02 campus will support neighboring large scale greenhouses in collaboration with Wa3rm – a leader in the development of circular and bio-based operations for waste streams – to reuse excess heat to grow microgreens, a process that will significantly reduce the carbon footprint of importing them from abroad. Such greenhouses can employ approximately 100 people which further supports the thriving ecosystem that a data center can create. Similarly, as part of the expansion of one of our Icelandic sites, ICE03, we have entered a partnership with AgTech startup Hringvarmi, to recycle excess heat to grow microgreens in collaboration with the food producer Rækta Microfarm.
There is no doubt that increased digitalization can have serious implications for our planet and because the data center industry is at the forefront of this trend it is essential that the natural and regional environment is given proper consideration as the industry continues to grow. There are solutions in place that can not only reduce the ecological impact of digital infrastructure but also significantly benefit local communities and national economies. Businesses seeking to enhance their sustainability credentials, can make an active choice by relocating infrastructure to highly energy-efficient data centers in the Nordics. It is a strategic move that contributes to a greener digital future.
Eyjólfur Magnús Kristinsson
Eyjólfur Magnús Kristinsson is CEO of atNorth. Prior to this, Magnús led Advania for eight years and chaired Iceland Datacenter. A key Nordic data center figure, he champions decarbonising high-density IT workloads.
