Data centers unprepared for new European energy efficiency regulations

Europe’s new Energy Efficiency Directive goes into effect next May, but the vast majority of data center operators aren’t able to collect the capacity and utilization statistics that regulators want.

Under the directive, owners and operators of data centers with 500 kilowatts or more of installed IT capacity will need to report their 2023 energy performance by May 15, 2024. That includes statistics about installed power, incoming and outgoing data traffic, total data stored and processed, energy consumption, power usage, temperature set points, waste heat utilization, and use of renewable energy.

According to Jay Dietrich, research director of sustainability at the Uptime Institute, only 19% of data centers in Europe collect server utilization statistics and only 29% even have a data management system capable of collecting and managing the information required by the directive. Overall, only 30% are ready for the directive, he says. Another 15% can be ready in three to six months, while 29% can be ready in one year – and 27% won’t be ready for two years or longer.

Collecting the data is particularly challenging in multi-tenant environments, where colocation providers will have to depend on their tenants to provide much of this information. “In the first year or two, that’s going to be a problem,” says Dietrich.

So what are the majority of data centers going to do? They’ll have to estimate their numbers until more accurate results come in, Dietrich says. “There’s some work in the industry to offer estimation tools, so I can make a rough estimate of capacity and utilization as a starting point,” he says.

And data center operators outside of Europe shouldn’t rest easy, he says. Other jurisdictions are likely to be paying close attention to Europe’s results and will roll out their own regulations in the next few years. “I think you’ll see the US and other Asian countries following pretty quickly,” he says.

That means that all data center operators, regardless of where their facilities are located, should be paying attention.

Fortunately, there are other benefits to collecting this information, beyond just the compliance benefits.

“The data lets you look at pieces of your infrastructure and determine if there are areas where you can be doing better,” he says. “Where do you have opportunities to significantly improve your utilization and better manage your energy? You can start looking at your systems at a more granular basis, and focus on particular activities, groups of servers or storage products and see where you have opportunities to improve.”

Collecting this data can also help operators spot problems quickly and correct them before they turn into outages.

A third benefit comes in when organizations produce their annual reports. “They can have a good story about how they can generate more work per unit of energy consumed,” he says. “They can make the point that they’re doing a lot of things, both in improvements in hardware, and from their efforts to better use the resources they have.”

The benefits are particularly important to enterprises that operate their own data center equipment, and for hyperscalers, he says.

IT equipment reporting gaps

The new directive is missing some key pieces, says Dietrich. For example, it covers CPUs and storage devices, but not networking equipment. “The regulators, to this point, have ignored networking equipment because it’s a small percentage of the total install base,” he says. “So they focus on servers primarily and storage equipment.”

And when it comes to the latest chips, such as GPUs and other accelerators for AI workloads, that’s a whole other kettle of worms. “GPUs are new enough that there are no good performance benchmarks and tests to determine what their capacity is,” he says.

And even for servers, there’s a notable lack of standards for measuring capacity. There are industry benchmarks, but manufacturers, users, and data center operators have different ones to choose from. “There’s no standardized methodology,” he says. “It would appear to be simple, but it’s not. And because there’s no standard way to aggregate the capacity, you’re going to end up with a total mess.”

There’s also no standard for efficiency for storage equipment, he says. “So that also needs to be worked out.”

For IT equipment inventories, the path forward is more straightforward, with DCIM and ITIM platforms widely available to help enterprises track their servers and storage equipment. There are also inventory systems that automatically collect asset information, says Dietrich. “Their software searches your whole network, identifies the assets and captures data for you. Those systems are out there that you can find and deploy.”

But that doesn’t mean that enterprises are using them. According to the Uptime survey, 69% of data center operators know what server equipment they have and 62% know what storage they have. But only 31% track which data centers that equipment is located in. In addition, 28% say that their equipment inventory is housed in different systems with limited ability to exchange data.

He recommends that European data center operators act quickly to find a simple methodology to provide a representative estimate of missing data. “Nobody is going to have a perfect number here,” he says. “There’s going to be a lot of uncertainty with it. But there are approaches that will provide a reasonable estimate to start with.”

He also suggests that it would be a good idea for an industry group to take the lead on coming up with a recommended methodology to help the industry get started. “Green Grid is working on that, but it’s a ways from being finished,” he says. (The Green Grid launched a new tool to measure data center efficiency this past February.)

End goal is to improve overall energy efficiency

The directive is part of the European Union’s plan to achieve an 11.7% reduction in energy use by 2030, and it is expected to include new sustainability standards for data centers in 2025. In addition, Germany will mandate a power usage effectiveness of 1.2 for new data centers by 2026.

According to the Uptime Institute, the average power usage effectiveness of data centers was 1.58 this year, down from 2.5 in 2007, but up from 1.55 last year.

The drive to reduce data center energy costs is exacerbated by the fact that demand for data centers is up. According to services firm JLL, the global colocation data center market size is forecast to grow at a compound annual growth rate of 11.3% through 2026, and the hyperscale marker is expected to grow even faster, with a CAGR of 20%.

Power consumption of European data centers is expected to increase from 100 terawatt hours in 2022 to 115 in 2026, according to S&P Global. Fortunately, the newest data centers tend to be most efficient, according to the Uptime Institute. Newly constructed European data centers have an average PUE of 1.4.

Hyperscalers are doing even better. Google, for example, now reports an average power usage effectiveness of 1.1. Microsoft says that its newest data centers have a power usage effectiveness of 1.12.

Meanwhile, regulation is already having an impact on data center efficiency. As a result of new regulations, 38% of data center operators are investing in more efficient facilities equipment, and 34% are investing in more efficient IT. In addition, 29% are increasing the metrics they track, according to the latest Uptime Institute survey.