The rapid adoption of AI (artificial intelligence) technologies is expected to drive demand for data centres globally but the “availability and reliability of energy” to power them remains a key obstacle.
These were the main findings of a survey of data centre investors and operators conducted on behalf of legal firm DLA Piper.
While 70 per cent of respondents predicted increased investment in data centres over the next two years driven by AI, an overwhelming 98 per cent said they had concerns about the availability of power when they made decisions about data centre projects, with half of respondents identifying the issue as a principal barrier to investment.
The global data centre market is expected to be valued at around $300 billion in 2024, growing to $483 billion by 2029, according to TMT Finance, which carried out the research for DLA Piper.
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However, the high energy requirements associated with these centres has made the roll-out of further projects problematic and in many cases at odds with Government climate targets.
Earlier this month Ireland’s Climate Change Performance Index called for a moratorium on data centres, which it forecast could account for 30 per cent of energy use here by 2030.
In its report, DLA Piper highlighted that utility companies in the US were being flooded with power delivery requests for sites earmarked for data centres that they will not be able to satisfy until well into the 2030s.
“In response, utility companies are now requiring large upfront non-refundable payments from investors in land and a committed off-taker of that power,” it said.
The company’s survey also found that operators and investors were expecting sustainability concerns around data centre energy and water usage to continue to grow, with 70 per cent of respondents saying they expected scrutiny and due diligence to increase over the next two years.
While European growth remains slower than the US, with Germany and the UK currently the leading markets for data centre investments, the survey indicated Frankfurt, London, Amsterdam, Paris and Dublin face increased competition from secondary markets like Milan and Madrid.
“Data centre capacity is central to the AI revolution and thus the global economy in the coming decades. It will take significant investment across the industry, and co-ordination between policymakers, investors and grid operators, to ensure that power supplies can meet the demand from industry and investors,” William Marshall, energy partner in DLA Piper Ireland, said.
“In Ireland, large scale new investment in data centres have led to concerns and policy responses and although Ireland is far from alone in security of supply and decarbonisation concerns, digital infrastructure and tech are substantial high value sectors for the Irish economy,” he said.
“Consequently, it is hoped that following the current Commission for Regulation of Utilities (CRU) policy review, a clear and achievable path for connection of new data centres will be available,” he said.
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