Data Centers & the Rise of Cryptocurrency
In 2016, data centers used 38.7% more electricity than all of Britain. That same year, data centers contributed to 3% of global electricity consumption and 2% of global greenhouse gas emissions – an overall environmental impact that RIVALS the carbon footprint of the aviation industry.
These figures seem stark – and they are. It goes without saying that these impacts have worsened in the last 5 years, as the number of data centers grows exponentially due to expanding internet bandwidth, access, and 5G service. From 2012 to mid-2019, MORE THAN 7 MILLION data centers were constructed and/or newly in operation. However, at present, only half of the world’s population is connected to the internet, which implies that we are far from the industry reaching its peak. In fact, global internet traffic is EXPECTED TO INCREASE TWO-FOLD from 20201 to 2022.
Over the next 4 years, the global data center construction market will experience a COMPOUND ANNUAL GROWTH RATE of 11.2%. By 2025, energy consumption in data centers will contribute 3.2% of total global carbon emissions and will require no less than 20% of total electricity consumption. In 2040, data centers are projected to make up ~14% of global GHG emissions—the same proportion that the U.S. contributed in 2019. Based on these rates, the amount of energy used by data centers is set to double every four years, and will continue to have the FASTEST-GROWING CARBON FOOTPRINT of any area within the IT sector.
In addition to carbon-related impacts and harmful emissions, data centers also consume a considerable amount of water through their daily operations (in the U.S., more than 174 BILLION GALLONS OF WATER in 2020)—specifically in keeping IT equipment running at optimal temperatures. It is estimated that about 35% OF POWER CONSUMPTION in data centers goes to HVAC systems that can utilize either open or closed loop water-chilled cooling systems. Most data centers run at 21-24 degrees Celsius in order to MAINTAIN RELIABILITY AND PERFORMANCE of the energy-intensive computers. However, recent server advancements, coupled with optimized thermal design in data centers, have ushered in the feasibility of free-air-cooled systems with ambient operating temperatures of UP TO 40 DEGREES CELSIUS. As data center demand increases, these types of smart and efficient design solutions will become integral to offsetting what otherwise could mean significant environmental impacts.
*Worth noting that global internet traffic 2020 was largely skewed by indirect effects of coronavirus. Between February and mid-April, arguably the peak of worldwide quarantine and containment measures, global internet traffic INCREASED BY 40% as a result of video streaming, video-conferencing, social networking, and online gaming
One of the most powerful drivers of data center expansion is the increasing interest in (and popularity of) cryptocurrency. Much like other information on the internet, this currency requires computer networks for distribution. The cryptocurrency Bitcoin, for example, is brought into circulation (or ‘mined’) with the help of specialized computers that are estimated to consume enough energy TO POWER ALL OF IRELAND.
As in many other industries, Bitcoin miners seek low-cost power to drive down their operational costs. Low-cost power often comes in the form off dirty, carbon-intensive sources such as coal. At present, CHINA LEADS THE WORLD in Bitcoin mining, which is in part a product of its cheap coal stock. Unsurprisingly, China also leads the world in greenhouse gas emissions.
There is some good news. Sustainable data centers—and specifically, sustainable cryptocurrency-mining operations—are possible. Initiatives like the CRYPTO CLIMATE ACCORD are working to fully decarbonize the crypto sector by achieving net-zero emissions from electricity consumption in crypto-related operations by 2030. A recent study by Cambridge University discovered that 39% of the Bitcoin network is supplied power from renewable sources. (HBR) The second-leading cryptocurrency, Ethereum, has also begun its transition to less-energy-intensive technologies.
Longevity Partners is currently helping one organization to construct a data center in the U.S. in a more sustainable way. Through our work in energy efficiency and new construction advising, our team has the expertise needed to drive the necessary changes in the industry.
Despite a 60% increase in service demand, global data center energy demand can remain NEARLY FLAT THROUGH 2022 if current trends in data center infrastructure and hardware efficiency are maintained through global, industry-wide efforts. However, these efforts must begin as soon as possible.