Written by Andre Karihaloo, Investment Director, Digital 9 Infrastructure plc
At COP 27 the focus today will be on decarbonisation. Decarbonisation Day will see discussion centre around how emerging technologies are encouraging and facilitating the much-needed transition and the paradigm shift towards a low carbon economy.
We at Digital 9 Infrastructure today call on world leaders to acknowledge what makes digital infrastructure technology resilient and sustainable as it continues to revolutionise the world we live in. Many people are unaware of the importance of the digital infrastructure in our everyday lives, not yet understanding the investment opportunity that it offers or the integral role it plays on the journey to net zero. And while sometimes viewed as a carbon-intensive field, the digital infrastructure sector has been pioneering sustainable strategies that simultaneously support business needs and protect the planet.
Critical to the day-to-day running of our digital lives are data centres, which essentially act as the brain of the internet. It is in these centres that the world’s data – including websites, videos and music – are stored and processed. Put simply, they are central to the functioning of our modern world.
The United Nation’s Sustainable Development Goal 9 focuses on building resilient infrastructure, promoting inclusive and sustainable industrialisation and fostering innovation. Data centres support this by storing and processing vital data sets such as vaccine trial or climate change research, facilitating societal improvements for many around the world. However, there are concerns over their net environmental impact, given they globally consume 2% of electricity and contribute 2% to CO2 emissions. This is set to worsen over the coming years, as data centre traffic increases year on year to meet the surging global demand.
We at DGI9 are taking steps to mitigate this environmental impact. We work on the principle that it is more efficient to export data than renewable power. By this, we mean that it is most sensible to focus on migrating energy-intensive, latency-insensitive data applications (e.g. natural language translation, protein sequencing, aerodynamic simulations) to regions that have a renewable energy surplus. Traditionally, all datasets were processed in cities like London, Dublin and Amsterdam, but we are now seeing a notable shift, with data centres operating out of the Nordics. The Nordic region has the highest proportion of renewable power in the world, as well as the lowest energy prices in Europe. Adding to its attractiveness for data centres is its geographical advantage. The efficiency of data centres is described by their PUE metric (‘Power Usage Effectiveness’). It is far easier to achieve a lower, more efficient PUE value in colder climates where fresh air – rather than power-hungry cooling units – can keep equipment at the optimal temperature . Our Verne Global data centres, which operate 65MW across five campuses, are some of the most efficient in Europe, emitting less than 2% the emissions of an equivalent UK data centre and offering the latest cutting-edge high intensity compute and sustainable colocation facilities to customers from North America, Europe and Asia. Verne Global is also leading the way on reporting, disclosing scope 1, 2 and 3 emissions, as well as Water and Carbon Usage Effectiveness (WUE and CUE) statistics.
We are seeing dramatic growth in the Nordic region for digital infrastructure for these very reasons. Some investors had previously been concerned about liquidity risk when considering backing data centres, but now we are seeing fierce competition for both assets and capacity.
Data centres are only one part of the broader digital infrastructure chain. If data centres are the brain of the internet, then subsea fibre is the backbone: 98% of all international internet data travels through subsea fibre. Although subsea fibre demands far less power than data centres, we can optimise the location of data centres by bringing the subsea cables to areas with green, clean power. This has compounded interest in the Nordic market from investors.
Building out global connectivity need not be seen as a trade off with decarbonisation targets. Integrating new technologies and promoting research-driven initiatives holds the key to sustainable interconnectivity, as we are already seeing with projects across the globe. Positioned at the cutting edge of climate-friendly technology, digital infrastructure therefore presents a strong investment case that guarantees returns and helps the planet.