The Reuters news staff had no role in the production of this content. It was created by Reuters Plus, the brand marketing studio of Reuters.
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Disclaimer: The Reuters news staff had no role in the production of this content. It was created by Reuters Plus, the brand marketing studio of Reuters. To work with Reuters Plus, contact us here.
How smart energy strategies are reshaping the future of data centers
With AI and growing demand for digital services putting increasing pressure on data centers, innovative and sustainable solutions are required to meet customer needs.
The relentless march of technology, particularly the explosive growth of artificial intelligence (AI) in recent years, is creating unprecedented demands on data center infrastructure. According to the International Energy Agency, data centers accounted for around 1.5% of the world’s electricity consumption in 2024, or 415 terawatt-hours (TWh) of power. The U.S. accounted for the largest share of this (45%), followed by China (25%) and Europe (15%). Driven by AI and increasing demand for digital services, this consumption is set to double to around 945 TWh by 2030. In the U.S., data centers are expected to account for nearly half of electricity demand growth between now and the end of the decade with more electricity required for data centers than to produce aluminum, steel, cement, chemicals and all other energy-intensive goods combined.
Complete data center solution
To meet this unprecedented demand, Arcadis is working across the entire data center supply chain, from global ‘hyperscalers’ and developers through to vendors and suppliers of key equipment and technology. This work includes selecting the right land parcels, handling planning and permission applications, selecting technologies, optioning telecoms, power, gas, and cooling alternatives, as well as ensuring availability of long lead items to enable final investment decisions (FID). It requires an integrated project development approach to accelerate and de-risk front end planning and move projects into construction. “Traditionally, power used to go where the load is. Now, load goes where the power is,” says Masjood Jafri, National Energy Transition Strategic Advisor at Arcadis. “This is a fundamental shift in the way power is generated and delivered to industrial assets. It’s a unique challenge for the industry, requiring hyper-collaboration to plan, finance, design, build and operate large data centers commercially at scale.”
Masjood Jafri National Energy Transition Strategic Advisor, Arcadis
“Traditionally, power used to go where the load is. Now, load goes where the power is.”
Fortunately, one of the advantages of on-site power generation is that it is possible to convert the heat produced in the generation process into ‘free cooling’ using absorption chillers, “so you don’t necessarily need to be in a cooler climate to facilitate higher power densities,” explains Gyzen. Advances in chip technology are also influencing data center operations. "Chip manufacturers, including Nvidia, AMD and Intel, are building chips that run hotter by relying on liquid cooling to manage the heat," Gyzen explains. Given that liquid is exponentially more efficient than air for heat rejection by a factor of 1,000 to 3,500 times, this enables data center operators to reduce their overall energy consumption and cooling costs, though it does require careful management to ensure the reliability and longevity of IT equipment.
A woman holding a tablet stands in front of numerous data center racks
On-site vs off-site power generation
Inevitably, this increasing demand for power, coupled with limitations in grid supplied power, will drive the adoption of on-site power generation for data centers. As Jeff Gyzen explains: "With utilities unable to provide the increased demand for power in many regions, the only option is to go with on-site power generation." It offers several advantages, providing a reliable and dedicated power source, ensuring business continuity and mitigating the risk of outages. However, it comes with its own challenges of planning, financing, building, and operating power generation assets under unique underwriting conditions. Power generation and delivery strategies vary significantly, influenced by factors such as public policy, location, public perception, environmental impact and availability of energy sources. For example, in the U.S., the country’s vast geography and diversity in energy sources allows developers to explore on-site power generation options, where interconnection with the grid is either difficult or can’t be completed in an accelerated timeframe.
Jeff Gyzen Global Practice Group Director for Mission Critical & Industrial Facilities, Arcadis
“While nuclear power can provide a stable and low-carbon energy source for data centers, public acceptance and regulatory hurdles, especially in the U.S., remain significant obstacles.”
To minimize technology risks and support project financing, mature and cost competitive technologies – such as solar, wind, battery and energy storage systems (BESS) and combined cycle gas turbines (CCGT) – are being prioritized over technologies with lower readiness levels or higher construction costs. Increasingly, data centers are also looking at nuclear power, in the form of small modular reactors (SMRs) though regional differences apply, claims Gyzen. “While nuclear power can provide a stable and low-carbon energy source for data centers, public acceptance and regulatory hurdles, especially in the U.S., remain significant obstacles.” Although the U.S. leads the world with the most extensive pipeline of SMR projects specifically targeted for data centers, nuclear power has more public acceptance in other regions, including parts of Europe (especially France) and China.
Storage tanks in an industrial facility stretch into the distance
Innovative cooling solutions
Another trend we’re seeing is that data centers are moving to hotter regions. “For energy efficiency and cost savings, data centers traditionally preferred cooler areas; however, the pursuit for more energy is pushing the locations to higher temperature regions,” explains Jafri. This further increases cooling demand, meaning more energy and water use and costs. Certainly, the escalating power densities in data centers necessitates more advanced cooling solutions than before. Air-cooling methods are often inadequate to handle the heat generated by high-performance computing equipment. For example, direct-to-chip liquid cooling, which involves delivering liquid coolant directly to the Central or Graphics Processing Unit, offers superior heat dissipation compared to air cooling and is essential for managing the thermal loads of modern processors.
Jeff Gyzen Global Practice Group Director for Mission Critical & Industrial Facilities, Arcadis
“Chip manufacturers, including Nvidia, AMD and Intel, are building chips that run hotter by relying on liquid cooling to manage the heat.”
“If you look at a typical high density server cabinet, 80% or more of the heat can be cooled with direct-to-chip type liquid cooling solutions,” says Gyzen. “The remaining 20% can then be cooled by other means such as air, either by CRAH (computer room air handlers) on the floor or rear door heat exchangers.” Gyzen favors rear door heat exchangers, which utilize liquid cooling systems, over CRAH units, because they are more direct and can utilize the same liquid cooling systems as the direct-to-chip solutions. However, he acknowledges that while companies such as Vertiv are developing new cooling technologies, rear door heat exchangers can only accommodate cooling densities up to around 50kW per rack, much less than the demands required by the latest high-density cabinets.
Liquid cooling pipes are fed into a processor
Sustainable operations
As the policy and regulatory environment continues to evolve, Arcadis’ Christian Goldsmith notes the importance of sustainability in data center design and operation – both for economic and environmental reasons. "Sustainability is no longer a nice-to-have, it's a must-have," he says. "Our clients are demanding solutions that not only meet their performance requirements but also minimize their environmental impact." Arcadis is working with Terra Ventures on what is believed to be one of the most environmentally-friendly data centers in the world. Located in San Jose, California, it will substantially reduce CO2 emissions; thanks to the elimination of back-up generators and the use of absorption chillers to produce chilled water from the exhaust heat produced by the natural gas fueled fuel-cells. This reduces the data center’s cooling requirement by as much as 70%.
Christian Goldsmith Global Solutions Lead for Data Centers, Arcadis
“By working together, we can create a more sustainable and efficient digital infrastructure that supports the needs of all our society.”
What’s more, the data center will incorporate a greenhouse benefiting from two by-products of natural gas fueled fuel cells, CO2 and H2O, to grow fresh fruit and vegetables which can be harvested and sold locally from an onsite retail store. Unused redundant power will also be pumped back into the utility power grid, supporting the community rather than taking from it. As an added benefit, pumping power back into the grid has the potential to provide an additional revenue stream. The challenges facing the data center industry are undoubtedly complex and multifaceted. However, by embracing innovative energy and cooling strategies and working with experienced partners like Arcadis, data center operators can ensure a sustainable and resilient future. As Goldsmith concludes: "The future of data centers depends on our ability to innovate and collaborate. By working together, we can create a more sustainable and efficient digital infrastructure that supports the needs of all our society."
Politics, profits and purpose
With a more climate-sceptic US administration promising to pull out of the Paris Climate Agreement for a second time and vowing to support widespread drilling for oil, this could drive down the price of fossil fuels. That may undermine the economic case for decarbonization. But it could also increase competition and drive greater innovation in electrification. Financial factors are not the only concerns that businesses must address through decarbonization, says Karrenbeld. Manufacturers need to prove that they are good corporate citizens which operate responsibly. Rapid decarbonization can also contribute to a positive brand reputation with stakeholders. “I expect companies to stick with and even accelerate their net zero ambitions independently of the political landscape,” he says. “We have to act today.”
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Inevitably, in this fast-developing landscape, innovative energy strategies are crucial to ensure that data centers are operated as efficiently and sustainably as possible. According to Jeff Gyzen, Arcadis’ Global Practice Group Director for Mission Critical & Industrial Facilities, Arcadis is at the forefront of addressing these challenges. “Large AI models require a tremendous amount of power from data centers during training," Gyzen explains. "We’ve recently had a conversation with one client who is requesting a design to accommodate 600 kW per cabinet. These are extremely high densities and come with their own set of problems, particularly how you supply that power and how you cool it." Christian Goldsmith, Global Solutions Lead for Data Centers at Arcadis, agrees. "The primary challenge is the energy demands of AI," he says. "Nvidia has its Blackwell GPU chips and is talking about its advanced Rubin GPU chips which will double the amount of power usage inside the rack. How long before we see the first megawatt rack?”
A man stands in front of a rack of server boards holding a testing instrument
Prototype design for one of the world’s most sustainable data centers, for Terra Ventures in San Jose, California
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Disclaimer: The Reuters news staff had no role in the production of this content. It was created by Reuters Plus, the brand marketing studio of Reuters. To work with Reuters Plus, contact us here.
The Reuters news staff had no role in the production of this content. It was created by Reuters Plus, the brand marketing studio of Reuters.
Produced by Reuters Plus for
How smart energy strategies are reshaping the future of data centers
Martijn Karrenbeld
Global Market Sector Director, Industrial Manufacturing, Arcadis
“I expect companies to stick with and even accelerate their net zero ambitions independently of the political landscape”
Christian Goldsmith
Global Solutions Lead for Data Centers, Arcadis
“By working together, we can create a more sustainable and efficient digital infrastructure that supports the needs of all our society.”
Jeff Gyzen
Global Practice Group Director for Mission Critical & Industrial Facilities, Arcadis
“Chip manufacturers, including Nvidia, AMD and Intel, are building chips that run hotter by relying on liquid cooling to manage the heat.”
Christian Goldsmith
Global Solutions Lead for Data Centers, Arcadis
“By working together, we can create a more sustainable and efficient digital infrastructure that supports the needs of all our society.”