Will sustainable data centres power the future?

White & Case has partnered with the Financial Times on the publication of three articles, which explore key energy transition issues. This article has been reproduced with permission from the Financial Times.

Data centres are now part of our critical infrastructure, and they are famously power-hungry. As they grow bigger, their environmental impact must be considered.

More than 200 zettabytes. That is the amount of data that is expected to be stored on earth by the end of 2025 – the equivalent of 200 trillion flash drives or 139 quadrillion floppy discs.¹ Digital services, cloud computing and the rise of AI have dramatically increased the amount of data we consume, and it has to be stored somewhere.

As demand rockets, so does energy consumption – for power, maintenance and cooling the facilities. Therefore, in order to meet net zero targets, data centre operators must focus on making them sustainable.

Data centres are becoming essential infrastructure

Globally, demand for data centre power is set to grow at a compound annual growth rate of 16% between 2023 and 2028, according to Boston Consulting Group.² In the UK, the number of data centres is set to increase by a fifth, according to Barbour ABI.³

The data centres themselves are also growing. "A large data centre development in 2020 would have been 10 megawatts – that would have been seen in Europe as a very significant project," says James Johnson, Partner at law firm White & Case. "Just five years later, 100 megawatts is now the equivalent. In the US, they are even bigger: a gigawatt campus is not unheard of."

Sustainability powers reliability

As facilities get bigger and more power hungry, efforts are being made by governments, policymakers and data centre operators to ensure they will not detract from net zero efforts. The European Commission (EC) is set to put forward its Data Centre Energy Efficiency Package in early 2026, which aims to achieve carbon-neutral data centres by 2030.⁴

And data centre operators are making efforts to ensure their facilities are working efficiently.

Google has commitments to sustainability, and claims that across its fleet of data centres, 86% of water withdrawals for cooling came from sources at low or medium risk of water scarcity.⁵

Some data centre providers are looking at old fossil fuel power stations as potential sites to redevelop into modern data centres, according to Lis Blunsdon, Counsel at White & Case. She says that the sites are attractive as they already have connections to the power grid, and they offer a good way to sustainably redevelop disused sites. And, she adds, it can end up having massive reliability benefits.

"Across Europe, old coal power stations – big, brownfield industrial sites where they have grid capacity – are being looked at as data centre sites," she says. "That sort of redevelopment plays into sustainability. Developers are looking at these sites because it is an easier way of getting the reliable power they need without such a long wait."

Reliability is a massive issue for data centres. Critical services depend on data centres, so downtime is a serious concern. A fault in a single data hub can cause huge problems across global markets.

Are sustainable data centres “the perfect infrastructure project”?

Making data centres sustainable will be an essential part of the energy transition, and it's clear that governments and operators are thinking hard about how to make them a reality. The environmental upside will be significant, but there may also be major benefits for investors, according to Tim Fourteau, Partner at White & Case.

"Investors are getting into sustainable data centres because, done properly, it is a stable income," he says. "It could be the perfect infrastructure project," he adds, referring to the ability for these facilities to come online quickly.

"The sources of funding are the banks, the private equity players, the family offices and the sovereign wealth funds, because this is a really hot sector," he says. "For private equity, it is simple: data centres have a short construction cycle and they start generating cash quickly. It is very different from something like nuclear, which takes years to build and carries huge cost-overrun risks."

The road ahead for sustainable data centres

The race for capacity is going to be both long and fast, so data centres will remain high on the agenda for many years to come. The challenge will be to manage that growth sustainably. Initiatives from governments and private operators will be vital, but the long-term success of sustainable data centres will also rely on investors looking for strong and stable returns.

_{1 cybersecurityventures.com/the-world-will-store-200-zettabytes-of-data-by-2025
2 www.bcg.com/publications/2025/breaking-barriers-data-center-growth#:~:text=The%20average%20size%20of%20a,of%20campuses%20above%20200%20MW
3 www.bbc.co.uk/news/articles/clyr9nx0jrzo
4 www.whitecase.com/insight-alert/data-centres-and-energy-consumption-evolving-eu-regulatory-landscape-and-outlook-2026
5 datacenters.google/operating-sustainably}

This article was first published in Financial Times.