Sustainable data centers: How real estate adapts to energy-intensive tech

The meteoric growth of cloud computing and artificial intelligence has turned global data centers into core infrastructure. Without them, the online ecosystems we have grown to rely on would cease to function, causing untold chaos in society that would have been unimaginable a generation ago. 

More than 181 zettabytes of data are now stored in server centers worldwide – equivalent to 90 quadrillion books. The sheer volume of digital content stored today is nothing short of breathtaking, and it is only set to increase as AI, cloud services, and Internet of Things (IoT) technology become more ubiquitous in our lives. 

The computing cost of this data must be considered, as well as the resource-intensive nature of keeping large server stations online 24/7. According to the International Energy Agency, 1-1.5% of global electricity is used for data centers.

In addition, a data center using 1 MW of power can use up to 25.5 million liters of water per year, equivalent to the consumption of 300,000 people. AI only exacerbates this challenge, with the booming industry predicted to use as much as 6.6 billion m3 of water—equivalent to half of the UK’s annual consumption.

As custodians of these thirsty data centers, commercial real estate (CRE) has a role in shaping the future of sustainable storage, creating low-carbon hubs that reduce the sector’s acute environmental impact.  For this ProptechOS blog, we explore how these sustainable data centers can be procured and how they can adapt to energy-intensive tech.

Environmental impact of data centers and the case for green solutions

As data has become more omnipresent in our society, it is easy to overlook its staggering impact on our resources and how the age of AI is set to impact this further. Around two-thirds (68%) of the world’s population is online, and internet users have almost doubled in the last decade. More than half of people are active social media users, and while we are yet to fully understand AI’s user base, almost 40% of the adult population in the US uses it to some degree.

Major tech companies like Microsoft and Google plan to spend at least $75 billion each in 2025 to expand their facilities to meet the unstoppable demand for AI and support the operation of their consumer AI products.

While this new technology is revolutionizing everything from healthcare to energy management, the environmental impact of this convenience needs to be addressed. Goldman Sachs estimates that data center power demand will increase by 160% and consume 4% of the world’s energy by 2030. Data centers will soon consume more water and power than many nations.

Key drivers behind green data center development

The answer in this scenario is not to use less data; the need for sustainable cloud storage has never been greater. The buildings in which we house large data servers need to be low-carbon to offset the energy consumed by their usage. 

It is crucial to maximize their operational efficiency and ensure major tech firms that procure data centers house them in ESG green buildings (or an equivalent benchmark). Organizations like Meta are already taking steps in this direction; all of their global data centers are LEED gold-certified or higher. Microsoft has pledged to match this level for all new facilities it builds.

How can we build sustainable data facilities?

It is the paradox of our times that sustainability is so desired by corporate leaders yet so reliant on energy-intensive tech that contributes a nation’s worth of electricity to the grid. The CRE sector must be ready to meet this challenge by building and maintaining highly efficient data centers that minimize electricity consumption while maximizing center capacity.

Strategic site selection and power purchase agreements

Investors and tech firms can improve a facility’s sustainability potential by carefully selecting its location before putting spades in the ground. More than half (54%) of data centers are located in the US, hardly surprising given the prevalence of American tech giants in the conversation. There is an emerging trend of data center construction in Nordic countries, with Sweden’s cool climate and digital economy best-placed to lower operating costs.

Another solution is to build data centers in areas where they are best placed to utilize renewable energy storage. Tech firms and IT companies are major buyers of power purchase agreements (PPAs), which allow them to buy renewable energy from the grid at mutually beneficial rates. In 2024, Google signed such an agreement, partnering with an energy company on a $20bn initiative to build its data centers for AI alongside solar farms.

Building design for sustainable operations

While not strictly addressing the energy concerns of data centers, property developers can also take steps during construction to minimize the site’s environmental impact and reduce its embodied carbon – the emissions involved in the construction process. In practice, this means utilizing sustainable materials and green building design principles to lower the building’s ecological footprint.

Tech giants like Microsoft are innovating in this area, procuring new data centers built with cross-laminated timber (CLT) to reduce the building’s embodied carbon by 65% compared with precast concrete. While high-temperature electrical hubs and wooden structures might sound like a recipe for disaster, CLT’s unique composition makes it durable, fire-resistant, and ultimately sustainable if sourced from sustainable forests.

Advanced cooling systems to reduce energy demand

Temperature control is a major concern in data center operation; servers generate vast amounts of heat, which puts a huge strain on a building’s heating and cooling systems. Most data centers use at least 40% of their energy footprint on cooling, making the choice of commercial HVAC system vital. The American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) recommends an optimal data center temperature of 18-27°C (or 64-81°F).

While traditional air cooling systems are mostly effective at holding these temperatures, even the most operationally efficient systems still consume a lot of electricity when running 24/7. Instead, more advanced liquid cooling systems are less reliant on the grid and are able to cool servers directly to allow them to operate more efficiently. Studies have shown that liquid cooling can reduce energy consumption by up to 25% in large data centers.

Renewable energy integration in modern data centers

Data center expansion is, in fact, creating a surge in demand for renewable energy in the US. Five companies—Amazon, Apple, Google, Meta, and Microsoft—account for over 45% of green electricity purchased by corporate entities worldwide. These organizations realize the significance of their innovation and are investing to offset the impact of their enormous data footprints.

On-site generation capabilities enhancing sustainability

While PPA agreements can help lower a tech firm’s Scope 2 emissions by mitigating its reliance on fossil fuels, integrating renewables on-site can take this further. When fully powered by renewable energy, data centers can offer long-term sustainability benefits. Installing solar arrays is the most prominent and cost-effective solution, as they can generate electricity on-site that powers server farms.

Data centers can also leverage the growth of geothermal energy and heat pumps (GHPs). These facilities can be built on sites with the space to generate heating and cooling from underground or water sources like lakes and rivers, and they can also be optimized to save a third (34%) or more on energy consumption.

Energy storage solutions and heat recovery capabilities

Leveraging renewables for data centers often goes hand-in-hand with energy storage systems, as more power than needed is often generated, and data centers need built-in energy resilience to withstand outages and prevent data loss. The technological advancement and reduced cost of battery storage (BESS) make it a more viable solution to store power to match demand flexibly.

Data centers can also capture the excess heat generated by servers, utilize geothermal storage solutions to cool equipment, and discharge excess heat generated by peak usage back underground. This can also significantly reduce energy consumption for cooling during the warmer summer months.  

The largest urban data centers can also restore their heat via geothermal energy storage to power district heating networks, offering significant contributions to city-wide needs. In Stockholm, one of Sweden’s largest server hubs has been retrofitted to provide heating for up to 10% of the city’s residents and businesses. 

Connecting the dots between Proptech and sustainable data centers

Undoubtedly, AI is here to stay; its long-term growth will only accelerate the procurement of data centers to meet demand. Our planet can ill-afford powering everyone inefficiently and using fossil fuels. CRE organizations that manage data centers must utilize all of the tools at their disposal to maximize the operational efficiency of these facilities. 

This is where innovative proptech solutions can help get the best out of energy management control processes, from managing peak energy demand to optimizing a data center’s HVAC system with a comprehensive IoT network that can spot inefficiencies and potential maintenance issues.

Monitoring real-time energy performance with ProptechOS

At ProptechOS, we understand the challenge of meeting long-term ESG commitments, managing investor pressures, and optimizing the energy consumption of thirsty data centers. Our solutions can support CRE organizations in a variety of building categories. 

Utilize our energy toolbox to monitor your data center’s real-time power consumption performance, identifying trends and opportunities to improve efficiency and save money. Our data-driven approach allows your organization to streamline its ESG data, ensuring long-term compliance with energy efficiency regulations and environmental benchmarks. 

Your CRE business can sign up for a free trial of ProptechOS today.