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Every Byte Counts: Data Centres and Resource Use
- Data centres use large plots of land, making it important to set aside space for retaining important biodiversity and maintaining pollinator-friendly vegetation
- Climate impacts like heatwaves and water shortages can cause disruptions to operations without effective risk management
With the rapid adoption of cloud services, exponential growth in mobile device usage, and the rising influence of AI, demand for data processing and storage is skyrocketing.
Source: Cushman Wakefield Research, Brightlio
Hosting the largest data center market in the world, Virginia processes close to 70% of the world’s digital information (FT). The extraordinary concentration of data centres is supported by high-speed internet connections and fibre optic cable infrastructure, which attracted Big Tech firms like Amazon, Google, and Microsoft.
There is now about 26 million square feet of data centre space in Virginia, equivalent to 450 football fields, with another 5 million square feet currently under development. By 2035, energy demand will surge to nearly quadruple of 2022 levels in Virginia – enough to power over 8 million homes. This could mean higher tenant turnover or relocation costs down the line as tenants and data centres shift away due to surging energy prices and operational disruptions.
Did you know: one data centre is estimated to require as much water as a city of between 30,000 to 50,000 people. In water-stressed regions, the problem is exacerbated as REITs may face higher operational costs that are passed onto tenants. In addition, investors might view data centres with high exposure to climate impacts (e.g. heatwaves, water shortages) as higher-risk investments if the REIT does not demonstrate effective climate risk management.
Local application
The number of internet users is expected to grow by close to 50% from 5.35 billion users to 7.9 billion users over the next 5 years. Data centre capacity in the Asia-Pacific has been forecasted to double by 2029. To serve the growing connectivity needs of the region, Keppel is building a cable system to connect Singapore, Indonesia, Philippines, and Guam.
There are now over 70 cloud, enterprise, and co-location data centres in Singapore, tapping on its role as a business and digital hub. In May this year, Singapore launched its Green Data Centre Roadmap highlighting plans to boost energy efficiency and use of green energy to maximise space for continued data centre growth.
Priorities of the Green Data Centre Roadmap (IMDA)
Looking forward
With surging populations, prolonged drought, and increasing urbanization, demand for natural resources is on the rise. As TNFD Forum Members, we reinforce nature-positive outcomes and leverage the TNFD “LEAP” (Locate, Evaluate, Assess, and Prepare) approach for the assessment of nature-related issues. We support companies that provide location-specific information about their operations, dependencies, and impacts on nature. Companies need to manage natural resources use to avoid short-term disruptions to business activities as well as a steady supply of these resources in the long term. For instance, in our environmental analysis, we assess the percentage of water from water-stressed regions used by companies. In addition, data centres use large tracts of land. We prioritise avoiding negative impacts such as by setting aside parts of the development plot for conservation. Data centre operators can also minimise negative impacts on biodiversity by leaving vegetation for pollinators to nest.
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