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The Sustainability Imperative for Data Centres across Greater China

Summer Chen • 25/05/2021
Summer Chen, Senior Associate Director, Valuation & Advisory Services, Greater China, discusses how the issue of addressing sustainability in data centres is not just a trend for the sector but an imperative as China commits to achieve carbon neutrality by 2060.

The global data centre industry consumes an estimated 200 terawatt hours (TWh) annually – more than the energy consumption of some countries, equivalent of half of the electricity used for transport worldwide, and around 1 per cent of global electricity demand. The rise and rise of the internet and cloud computing, and industry trends such as colocation facilities and ‘the hyperscale shift’, are fueling the growth of the data centre sector, which is projected to consume a fifth of all the world’s energy by 2025.

At the 75th session of the UN General Assembly earlier this year, President Xi Jinping declared that China will ‘aim to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060.’ Even prior to this, Greater China observed stricter policies around energy-saving in major cities such as Beijing, Shanghai and Shenzhen where they have lowered the Power Usage Effectiveness (PUE) for approving new and refitted data centres and rewarded subsidies of up to 40% when achieving even lower PUE than the newly enforced limits.

The need to achieve compliance has set the bar higher for data centre operators and developers, especially newcomers, aiming to get into key areas that are already challenging to enter with scarcity of land and power supplied. They will have to take on a greater range of considerations, especially when making procurement decisions based on the sustainability criteria. For example, renewable energy (wind, solar and even tidal power), liquid vs. air cooling, building resilience and adaptability, and much more. 

There have been key data centre players who have been proactively addressing the sustainability agenda and pushing the sector towards greener operations. For example, Beijing Highlander unveiled China’s first underwater data centre project in Zhuhai in Q1 of 2021 and plans to carry out and build more underwater data centre projects over the next five years across Greater China. Additionally, China Ya'an Big Data Industrial Park, who received two certifications in Q1 of 2021 became the first certified national carbon neutral green data centre in China. 

The ever-increasing demand for sustainable practices by corporations and consumers warrants the need to adopt a sustainable approach to operating data centres. The sustainability imperative will indeed reshape the market dynamic and will lead the future.

For more information around what’s next for data centres across Asia Pacific, visit our data centre update page, which includes a webinar replay where our industry experts share their insights on key industry trends both globally and regionally.

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