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SectorScope Analysis: Data Centres


1. Facts and figures

The UK has approximately 487 data centres, making it the third-largest market in the world, following the USA (around 2,300) and Germany (456). The UK market is relatively mature, yet most observers predict further growth as demand for data handling increases.


New data centre construction involves a considerable investment, but that is not preventing clients from driving forward with new facilities. Some reports predict as much as 36% growth in sq m of data centres between 2021 and 2025.


Data traffic has grown considerably in the past decade and has been boosted by the recent shift to remote working, which requires more (and faster) data transfer than ever. For example, in 2020, 15 new data centres were constructed that added a capacity of over 160MW.


London dominates the UK for data centre location, with Manchester a second sizeable hub. However, as the market becomes tighter in London, experts predict further growth in areas such as Birmingham and Slough.



2. Factors impacting building services specification in the hotel market The data centre market delivers highly complex, cutting-edge IT and communications technologies. However, the buildings that house the tech face two critical future challenges: energy use and sustainability. Both of them impact decisions around building services equipment, particularly cooling.


But with a growing focus on sustainability in the data world, there may be opportunities to re-use the waste products of data crunching (heat and water) using technology such as heat pumps.


Energy use Figures from the European Union estimate that in 2010 data centres accounted for 1% to 1.5% of global energy consumption. Further studies indicate this would grow to between 3% and 13% of global electricity in 2030. The report providing those estimates noted: “The worst-case scenario is exorbitant, however not unrealistic.”


However, the owners and operators of data centres are well aware that these buildings cannot simply continue to swallow energy without limit. As

a result, the sector has a strong drive to achieve high levels of energy efficiency and tap into renewable energy sources as much as possible.


This focus on energy use is significant for building services. CIBSE Journal noted that the cooling systems in data centres use approximately 45% of the total energy of data centres, with IT equipment accounting for 30%. Energy-efficient cooling is, therefore, a critical concern for data centre owners and operators.


Data centre cooling methods of the future will face an increasing challenge; as computing power increases, so does the heat produced in these centres. One market report suggests that the global data centre cooling market could grow (CAGR) by almost 14% between 2023 and 2027 to $21.42 billion.


Another report published at the end of 2022 noted that liquid cooling was becoming more popular with large data centre operators. For some data centres using cutting-edge hardware, water cooling is the only option to deal with increased operating temperatures.


An additional factor in this trend to liquid cooling is that it uses less water than air cooled-systems, and water efficiency is an area of concern for data centre operators. Other perceived benefits are that the cooling systems have a smaller footprint than the air-cooled and provide quieter operation. As a result, Microsoft has stepped up its use of water cooling.


However, not all data centres require or are suitable for water cooling. Swapping out air cooling for water-cooled systems in existing data centres is challenging. What’s more, there is some hesitancy in the data centre sector around systems which rely on water near servers – a leak can spell disaster for data centres.


So, it’s not likely that we will see an instant transfer to water cooling, with air-cooled systems continuing to dominate for some time. But with the speed of development in the IT sector, it is vital to keep an eye on changing requirements in this market.


Sustainability

The global data centre industry has already adopted sustainability goals. Most leading data centre providers, including Amazon, Microsoft and SAP, have signed the Climate Neutral Data Centre Pact. The aim of the pact is: “To ensure data centres are an integral part of the sustainable future of Europe, data centre operators and trade associations agree to make data centres climate neutral by 2030.”


The Pact members use 100% carbon-free energy, achieve and prove energy efficiency, prioritise water consumption and look for ways to recycle heat.


This last point is of interest to building services professionals. Heat is a by-product of these giant data factories and can be harnessed for use elsewhere. In other parts of Europe, several heat networks are already linked to data centres which provide heat to local communities, including an example from Microsoft in Finland.


In Europe, the use of waste heat and water from data centres is being considered as part of the EU Digital Decade strategy. A Data centre and energy systems synergies study was launched in January 2023 to explore how technologies can be harnessed.

Heat pumps are important in these systems, providing the technology to re-apply low-temperature waste heat in homes and other buildings. While the UK is no longer part of the EU, the data centre market is global and driven by client requirements, so we should expect interest in these concepts to reach the UK.


3. The future for data centres in the UK

The demand for data is growing – and the data centre market is under pressure to find space. Property consultants CBRE note that the


London data centre market had a record year in 2022, and that continues. Demand from hyperscalers (the giants of the data world, such as Amazon, Facebook, IBM, Google and Microsoft) is growing around London.


Growth in the UK data centre market is being fuelled by government policies such as the National AI Strategy and UK Digital Strategy which both encourage the development of UK businesses which will rely on powerful data centre support.


Given that London has limited space for the development of new data centres, it is likely that we will see further growth in other regions. For example, Vantage Data Centres is building a new centre in London on a £500 million campus in Acton, London. However, this is in addition to an existing site in Cardiff, Wales which is home to two data centres. In addition, Manchester, Slough, and Birmingham are expected to witness increased investments in coming years.


4. What this means for marketers, sales teams and product develop

Building services marketers, sales teams and product developers targeting the data centre market should undoubtedly focus on energy efficiency and sustainability as leading USPs for products and services.


The ability to deliver reliable cooling (with robust support in case of problems) is critical. The growing interest in using waste heat from data centres seems timely, given the UK government’s promotion of heat networks as part of its heat decarbonisation plans.


Technologies which support these applications will have an advantage as a growing number of hyperscalers and clients of other data centres look to demonstrate their sustainable credentials across their whole supply chain – including in their data handling.


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