A new European directive on energy efficiency is coming into force. The changes will affect many industries, including the data center sector

Data center service providers will have to report on CO2 emissions, energy, and water consumption and consider the environmental impact of operations in planned investments. These are the obligations imposed on data center operators by the new Energy Efficiency Directive (EED) adopted by the European Parliament and the Council. The new legislation comes into force as early as 10 October this year. EU member states have 2 years to adapt their national laws to the new requirements. The first country working on the new legislation is Germany.

The EED contains several recommendations for many market sectors, including the ICT market, which accounts for 5-9% of global energy consumption and more than 2% of greenhouse gas emissions. Data from the International Energy Agency shows that the data center is responsible for 1-1.5% of total global electricity consumption. However, this is forecast to rise to as much as 8% by 2030. The European Digital Strategy taken note of the need to focus on energy-efficient and sustainable data processing and maintenance, hence the recommendation for transparent operations in the sector.

Data centers will have to report

The new directive suggests that all member states must collect and report data on emissions generated by data centers. But not only that. Newly built facilities must be designed to minimize energy and water consumption, use technologies that support low carbon emissions and consume recycled heat. Based on these recommendations, member states should create detailed regulations to set out individual requirements. They have 2 years to do so.

– The new EU directive aims to reduce energy consumption by 11.7% by 2030. The obligation to report on energy and water consumption and emissions, as well as the implementation of green investments, will be required of all operating data centers with more than 500 kW capacity. Small, edge data centers typically have energy capacities of around 1 MW, while traditional facilities have capacities totaling tens of megawatts (MW). This means that the vast majority of both already-built facilities and those planned will be subject to regulation, points out Wojciech Stramski, CEO of Beyond.pl, which owns and operates data centers with a target capacity of 42 MW and powered entirely by renewable sources. However, national regulations may be even more restrictive, with Germany being the best example. In the principles introduced there, they want to impose a reporting cap on all data centers above 300 kW capacity, adds Wojciech Stramski. 

Energy efficiency as a priority

The new law aims to reduce EU energy consumption by 11.7% by 2030. Each member state will have to estimate its indicative national contribution. In addition, annual energy savings are to increase steadily: from the current 0.8% to 1.3% (in 2024-2025), then 1.5% (2026-2027) and 1.9% from 2028.

The new directive introduces a number of measures to support the acceleration of ‘green’ transformation. This includes adopting the general principle of ‘energy efficiency first’, to be applied to energy policy and general. Recommendations for both public and construction sectors are specified, and green mobility and infrastructure development for electric vehicles are among the solutions promoted. For the ITC and data center sector, the recommendations include, for example, reporting on installed capacity, data processing volumes, energy consumption, PUE (i.e., the energy efficiency index), use of waste heat, water consumption, and use of renewable energy.

– These provisions are very much needed, as they force operators to act in a certain way and introduce the necessary transparency to our industry; conversely, they benefit customers and society in general. Understanding energy parameters of data centers, will allow customers to choose operators that consume less energy, energy which is grean, and hence pay less for colocation services. However, reporting can be challenging for operators, especially those who have not analyzed their environmental indicators to date, says Wojciech Stramski from Beyond.pl.  

Germany adapts the law first

Germany was the first in the EU to commence work on introducing new legislation. The Energy Services Act contains provisions regulating the energy obligations of German data centers with a capacity of more than 300 kW and introduces a fine in case of non-compliance.

According to the draft regulations that are being finalized, from 1 January 2024, data center operators should cover a minimum of 50% of their electricity consumption from renewable sources. Data centers already in operation or those that will commence operations before 1 July 2026 will have to achieve a power consumption efficiency (PUE) of less than or equal to 1.5.  The power consumption efficiency must be less than or equal to 1.3 from 1 July 2030. Anyone who fails to meet this requirement will be subject to a fine of up to EUR 100,000. The power efficiency index ( so-called PUE) is the ratio of the total energy consumed by a data center relative to the energy consumed by the IT equipment installed in the facility.

– If analogous regulations were to come into force in Poland, many facilities would fail to meet these requirements. For example, we built our core data center in Poznan, Poland, with the highest possible energy efficiency. Already in 2016, we achieved a PUE of 1.2. The current average PUE in Poland is 1.4-1.6, and these values are much higher for many companies that hold their IT infrastructure in on-premise data centers. In the coming years, we will witness a costly modernization of already-built facilities or their closure. In turn, customers will abandon their on-premise data centers and move their infrastructure to data centers that meet regulatory requirements, points out Wojciech Stramski, CEO Beyond.pl.