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Energy Security in Europe

Raising to the top of the agenda in the data center industry

The devastating Ukraine crisis has sent shock waves through our global community. We stand by our fellow Ukrainians in their sufferings. This new situation has also generated a global level of attention on a topic that has not been discussed much in previous years – energy security. A topic that entails all of areas of society and which is also crucially important for the data center industry. In conversations with prospective data center clients across the world, energy security is now on the top of the agenda.

By Svein Atle Hagaseth, CSO of Green Mountain

Undoubtedly, Europe is dependent on Russian gas and the rest of the world rely heavily on Russian oil. Although European sanctions on oil and gas import have yet to be implemented, the European Commission has proposed to cut its reliance on Russian gas by two-thirds already by the end of this year. This would be achieved by increasing imports from other gas exporters, switching to other energy sources, and increasing energy efficiency. Certainly, this is not an easy task, and this new situation creates concern throughout Europe. In a recent conversion I had with a German Power company they stated that if Russia halts all shipment of gas to Germany, the country will come to a complete stop, and bankruptcy to follow. The belated realization of the risks of over-dependence on Russian energy forces Europe to take more significant action on energy security.

Securing power for data

For data centers in Europe, energy is at the heart of our existence. According to a EU Commission study, EU data centers will consume 3.1% of EU’s electricity demand by 2030 in order to secure the modern digital society we all rely on. Today, the current European electricity production is based on multiple different sources. From renewables like hydro, wind and solar, to nuclear and fossil sources like coal, oil, and gas. Unfortunately, a large proportion of European countries rely on the latter group of energy sources, where Russia is the dominant provider.
As an example, approximately 36 % of the German power production in 2020 was based on fossile sources. The proportion based on gas varied. Sometimes it accounted for up to 50%, although the average was between 10-15%. (electricitymap.org) The current unsecure energy situation raises questions. What do you do with your data if there is no power available? Not short nor long term? Not from the grid, or no diesel/gas or other sources for your backup generation?

Accelerating the Green Shift

Power shortages for data centers have mainly been an issue in specific locations in Europe. Now we might experience huge limitations at a higher level. Not only when it comes to today’s needs, but the needs of tomorrow as well.  All stakeholders, from politicians and governments, to enterprises, and the public, care deeply about the issues of climate and energy transition. Now they also need to consider these in the context of energy security. We believe the current situation will lead to a steep escalation in the green shift (like we now see in Poland for instance) and buy-in for policies that keep climate and the energy transition in mind. But this shift takes time, and the market needs action and opportunity to mitigate risk now.

The energy security situation will accelerate the Green Shift.
The energy security situation will accelerate the Green Shift.

Moving workloads

For data centers, an important issue to discuss is how and where they store data. We have raised this question at numerous conferences and to government policymakers. Today, 1000s of MW of power equivalent data is stored in hubs like Frankfurt, Amsterdam, London, etc. Data which has no latency requirements or can accept latency of up to 20-30ms roundtrip. Estimates show that 90 % of all workloads, can move to locations where there is self-sufficient power. The remaining latency sensitive data should be kept close to the client. Another bonus is that many of these more remote locations also can provide a higher degree of energy efficiency.
It seems like this alternative is gaining traction in the European market. Consequently, Green Mountain has over the last month received more than 300 MW of requests for our facilities in Norway from companies seeking to mitigate the current energy risks. In Green Mountain, we have over the last decade spoken about the sustainability impact of Norway having 100 % renewables. now, we discuss the energy security issue more regularly in our conversations with the stakeholders. Sustainability is definitively still one of the top 3 decision criteria. But now the combination of sustainability and energy security drive every dialogue we have.

Alternative locations

Norway is (again) fortunate as we are one of the very few countries in Europe that are self-sufficient in energy. Internally in Norway we produce more power than we consume – and Norway’s oil and gas production is mainly for export. Norway can therefore help relive the energy crisis in two ways. By increasing gas export to help supply Europe and by welcoming energy-intensive industries like data centers to our country. Our local electricity overproduction is best used close to where it is generated to avoid power loss due to transmission.
In 2020, Europe produced approximately 2790 tWh of renewable power, of which Germany accounted for 247 tWh and Norway 157 tWh. In other words, Norway accounted for 5.6 % av total production of renewables, or compared to Germany about 65 % of Germany’s renewable energy production!  That is a high number when considering that Norway only has 0.6 % of the population of Europe, or 6.7 % of Germany..
To sum up, Europe needs to seek alternative sources for gas or fossil fuel reserves, implement new renewable sources, and keep nuclear plants in operation. In addition, one of the major steps European businesses should do is to look for alternative locations where energy is secured. Not just today, but for the future.

Green Mountain Client Meeting
Energy Security is a topic we now discuss in almost every client meeting.