Why half-measures won’t solve Europe’s data-centre energy crisis

Problem

Competition is increasing for grid connections. Heavy industry is increasingly relying on electricity-intensive green hydrogen, and tech companies need massive amounts of the same commodity to train AI models and manage huge data sets. Meanwhile, more heat pumps and electric vehicles require additional electricity, altogether creating a combined supply gap of 80TWh by 2030.

The impact of this digitalisation is not unexpected—researchers warned in 2018 that growing electricity demand from information and communication technology would cause a significant increase in greenhouse gas emissions. However, the political response has been slow. Despite EU ministers reaching conclusions on sustainable digitalisation in 2020, the European Commission is reluctant to propose binding legislation to limit the energy appetite of data centres.

Now the rapid growth in demand risks slowing down low-carbon transitions in other parts of the economy. The commission’s Strategic Roadmap for Digitalisation and AI in the Energy Sector does not propose binding measures to manage this challenge and only mentions mandatory energy-performance standards as an option to be assessed by 2027.

Solution

The commission’s roadmap promotes voluntary agreements between data-centre operators, energy-related parties and public authorities. It correctly notes that digitalisation and AI bring many benefits for the energy system, including in helping to combat climate change, and recognises the challenges posed by the rapidly increasing energy demand of data centres. However, instead of waiting until 2027, the EU should follow the example of Germany and non-European countries such as China and Japan in deciding this year which energy-performance standards are needed. The EU also needs to improve its transparency about current levels of data-centre energy consumption.

In addition, European policymakers need to prioritise strategic investment in low-carbon transitions of heavy industry by providing them with a “fast track” for grid access, reflecting the societal value of decarbonisation. The forthcoming electrification action plan should ensure that data-centre operators such as Amazon, which have more economic resources to fund grid connections, do not endanger the decarbonisation of industry.

National governments and energy agencies need to better coordinate green and digital transitions, including in updated national energy and climate plans, and upcoming national and regional partnership plans. The EU should also advocate for more transparent algorithms and sustainable AI use, for example by establishing the right for users to easily search the internet without generic AI overviews to automatically limit energy use.

Context

The European Commission published its roadmap on June 3rd, as part of a tech sovereignty proposals package that also includes legislation to promote data centres. These initiatives build on the AI Continent Action Plan and the Apply AI strategy, both of which also have a strong focus on facilitating new data centres across the EU.

Policy measures to promote sustainable data centres and AI can bring competitive advantages to Europe at a time when parts of the world are struggling to combine digitalisation with providing enough electricity and water for society. EU policymakers should also focus on business opportunities in less energy-demanding digital technologies, such as the more than 50 European computing start-ups whose technologies can reduce energy consumption and climate impact.