Governments around the world are tightening regulations on building data centers due to concerns about their huge energy consumption and the impact on national climate goals and power grids.
According to the Financial timesCountries such as China, Singapore and Ireland have imposed restrictions on new data centers in recent years to comply with stricter environmental regulations.
Elsewhere, Germany and Loudoun County in Virginia, US, have introduced measures such as limiting permits for data centers in residential areas or requiring them to feed renewable energy into the grid and reuse the waste heat they generate.
Greater AI demands
The biggest threat to new projects is in Ireland, a hub of server farms built by cloud computing giants because of its low tax rate and easy access to high-capacity undersea cables for global Internet traffic. . The country's energy and water regulator's decision in 2021 to limit new data connections to the electricity grid resulted in data center operators Vantage, EdgeConneX and Equinix being refused permits for new projects in Dublin last year .
The United States is home to a third of the world's 8,000 data centers and its energy consumption is growing significantly, due in large part to the growing demands of AI. Tech companies like Microsoft, Alphabet and Amazon are under increasing pressure to play a more active role in generating renewable energy and working on energy efficiency measures to keep their data centers running.
While all the tech giants are investing in wind and solar energy, Microsoft has begun considering the nuclear option to power some of its data centers.
Barclays analysts warn that governments have yet to consider the effects of increased internet use on their electricity networks, and predict that similar restrictions will be implemented globally in the coming years.
This could increase pressure on the $220 billion data center and cloud industry, which is expected to rise to $418 billion by the end of the decade as global demand for data increases.
