Data Centers Are Energy-Guzzlers, but That May Not Be the Case for Long

As the world’s digital infrastructure continues to expand, data centers can’t be built fast enough. The pandemic-induced shift to remote work, online education, video streaming, and e-commerce have driven both demand for data centers and their yields compared to more traditional real estate classes. Even with persistent supply chain backlogs and a looming recession, the compound growth annual rate for the data center market is expected to increase by 9.6 percent from now until 2030, ultimately reaching an overall value of $418 billion. While that’s great news for a thriving internet connection, it’s not so stellar for the environment. 

Data centers are notorious energy gobblers, and their meteoric rise as an asset class stands in diametric opposition to the many decarbonization efforts being laid out by both corporations and policymakers. Pressure is mounting for the real estate industry to move the needle on climate progress, and the need to tamp down energy consumption in data centers is no exception. In recent years, some strategies have emerged to mitigate the whale-sized bite data centers take out of the global energy supply, but the complex energy ecosystem that data centers require to function properly poses a huge sustainability challenge.

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Data centers consume a lot of electricity due to the high density of power-hungry hardware, from servers to storage devices to networking equipment. Thanks to the laws of thermodynamics, every joule of energy passed through computer equipment eventually turns into heat, as anyone who’s ever

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