Much has been said about the energy crisis unfolding in the UK in the last six months, especially given the unfolding events in Ukraine. To complicate matters further, the climate crisis is accelerating at the same time. As a large scale energy user, both of these serious issues directly impact the data centre industry. The general public is becoming more aware of data centre energy usage and it’s triggering protests at industry events.
The international climate change debate is littered with goals, aims and ambitions about what should be done. However, as COP26 highlighted once again, there often appears a lack of structure, roadmap or realism as to how these targets can be achieved. Talk is cheap and real action is imperative.
Such is our reliance on the digital economy - London itself will soon be a Gigawatt data centre hub - it is incumbent upon data centre operators to do the maximum we can to use sustainable, green energy within our facilities. Now is the time to push the boundaries of sustainability and explore every area of operations and energy usage to reduce our ties to fossil fuels.
The majority of data centres, whether these are on-premise facilities within corporate spaces or large-scale colocation facilities, like Kao Data, will always need to be located near an urbanised environment. While it would be nice (and a convenient solution) to move all data centre compute to locations lucky enough to be directly connected to a nearby renewable energy source, that just isn’t feasible. Remote, arctic circle data centres are great for certain types of back-end compute, but such is the industry demand on availability, latency and proximity, locations like Frankfurt, London, Amsterdam, Paris and Dublin (FLAP-D) will remain Europe’s leading data centre hubs. As a result, data centre operators within these locations need to look for the incremental steps they can take in their sustainability journey to make their data centres as environmentally friendly as possible.
One of the ways many operators try to do this is through Renewable Energy Guarantees of Origin (REGO). As defined by Ofgem, REGO certificates are proof for customers that a given share of energy was produced from renewable sources. However, the certificates are sold separately from the energy itself and are regularly bought and sold by financial players who speculate on the value of the certificates. While not ideal, and they certainly have their critics, for data centre operators not directly connected to a renewable source, REGOs are the best current option available provided by the energy industry. Without a geothermal spring in Harlow, or a neighbouring hydro-electric dam in Slough, using REGO backed, certified green energy is the best we, and all other large-scale operators around London can do.
We don't think this is good enough. So we've taken the next step forward in our own green energy journey to proactively search for something better.
Through unique collaboration with our energy provider all the renewable energy we use is now associated with a known source - Little Cheyne Court wind farm in Kent (shown above). Every electron of energy Kao Data consumes is matched by an equivalent capacity generated by this specific wind farm. While we’re still using the REGO certificated system, we’re removing the uncertainty as to the source and validity of this green energy, by ensuring our power is matched by genuine, renewable energy - generated here in the UK, at this wind farm. This also provides certainty to the market, and incentivises continued development of renewable assets, by providing a committed, long-term demand for the wind farm.
Obviously, the wind doesn’t blow all the time, but over a calendar year, we can guarantee the energy we and our customers use is 100% being matched by an equivalent supply of energy from this specific wind farm. Kao Data is potentially the first colocation data centre operator in Europe to have entered into this type of green energy commitment with a named asset.
Here at Kao Data, our root and branch approach to analysing the best path forward to a truly sustainable, fossil fuel free data centre portfolio is a central part of our ethos. It’s why we were the first developer and operator in Europe to transition our back-up diesel generators to renewable HVO fuel, saving 90% of the carbon emissions every time they are fired-up to be tested. We also look forward to the day where we can connect directly to a UK solar or wind farm when it comes to our utility power, and we’re encouraging our energy providers to provide better options - even exploring solutions around industrial scale energy storage - but we are not there yet.
Where we are today is not where we want to ultimately be, but we believe this is the right next step in that direction. Our transparent approach provides the industry – and our customers – with real clarity. We’re no longer crossing our fingers like neighbouring data centre operators around London and hoping the REGO certified energy is really as green as it says on the tin, we’re doing our level best to ensure it 100% is and that the targets we set for sustainability and Net Zero operations are not only met, but surpassed.
In the same way we are now seeing the industry follow Kao Data’s lead in transitioning to HVO fuel for generators, we very much hope other colocation data centres will follow our lead here as well. A collective effort to push the boundaries of sustainability by the sector could support significant incremental renewable energy deployments and, with an open mind, greater use of energy storage to ensure 24/7/365 matching of demand to renewables.
Matthew Harris
Formerly a founding board member and Investor Director, Matthew became Kao Data's Chief Financial Officer (CFO) in September 2021. He has extensive experience across a range of private equity backed and listed businesses in the technology, manufacturing and investment sectors and has secured over £250m of funding for portfolio companies.