As the backbone of the digital economy, data centres must balance growth with sustainability. By embracing renewable energy and circular economy principles, operators can meet the rising demands of AI and the Internet of Things while reducing their environmental impact.
As the demand for reliable access to data continues to grow exponentially, data centres have become critical infrastructure for modern economies. Their role is continuously expanding, driven by advances in artificial intelligence (AI), the Internet of Things (IoT) and the ever-growing need for computational capacity.
However, this growth brings with it significant challenges. Data centres require vast amounts of energy to power servers, cooling systems and networking equipment, and, despite growing investments in renewable energy, many of these facilities still rely on grid electricity derived from fossil fuels.
Research published last year predicted that the booming global data centre industry would emit 2.5 billion tonnes of carbon dioxide-equivalent emissions by 2030, placing significant pressure on data centre operators and governments to keep the carbon footprint of these facilities in check.
In response, countries including Singapore, Ireland and the Netherlands have previously introduced moratoriums on the development of new data centres. However, in the majority of cases, construction on these centres has resumed due to skyrocketing demand for data capacity.
Australia is in a competitive position to champion the growth of powerful and sustainable data centres, but in order to do so, the industry must address key infrastructure gaps and prioritise sustainable practices.
To help operators address these barriers, leading global design, engineering and management consulting company Arcadis provides end-to-end support in developing sustainable and resilient data centres tailored to Australia’s unique market conditions.
Enhancing sustainability through colocation
Recent advances in AI technology are transforming data centres around the world, enhancing their energy efficiency, operational automation and capacity management. However, these advancements come at a cost.
“With the introduction of AI, the electricity consumption of data centres goes 50 to 60% higher… The same computation is taking more energy because of the nature of the AI,” said Muhammad Ali, National Decarbonisation and Precinct Energy Solutions Lead at Arcadis.
This surge in energy consumption means it’s more essential than ever to integrate data centres with renewable energy sources. One strategy to achieve this is sourcing land for data centres near renewable energy zones, allowing them to bypass delays in energy transmission.
“With the renewable energy zones in the Australian market increasing, we now have more choices for locating data centres in rural and urban areas,” said Ali.
Building data centres near renewable energy sources, or colocation, is becoming a cornerstone of their sustainable development. It reduces dependency on urban infrastructure and accelerates deployment timelines.
“Colocation not only enhances feasibility by eliminating delays in energy transmission but also supports sustainability,” said Ali.
“Instead of waiting for electricity to be generated and transported, colocated data centres can integrate renewable energy directly into their operations.”
Advanced cooling and waste heat recovery
Beyond strategic site selection, operators must also innovate within facilities themselves to tackle energy consumption challenges.
In its work with clients at data centres across Australia, Arcadis is exploring cutting-edge techniques to enhance their sustainability, including innovations in cooling and waste heat recovery.
Cooling remains one of the largest energy expenses for data centres, often second only to powering the servers themselves.
To mitigate the huge amounts of energy consumed by cooling systems, some operators are using liquid immersion cooling, where servers are submerged in a non-conductive liquid that efficiently absorbs and dissipates heat. This technique is more energy-efficient than traditional air-based cooling, as liquids transfer heat more effectively, reducing the need for energy-intensive fans and air conditioning.
Another emerging technique is air-side economisation, where external cool air is used to lower the temperature inside data centres. When external conditions are favourable, fresh air is filtered and brought into the facility, directly cooling the servers without relying on air conditioning.
In line with circular economy principles, operators can also make a significant dent in their carbon footprint through waste heat recovery.
“Generally, the heat generated by data centres is discharged into the atmosphere,” said Ali. “Instead, that heat can be recycled. In urban settings, it can be transported to adjacent buildings for heating offices and homes. If integrated with geothermal systems, the heat can be stored in the ground and retrieved when needed.”
A golden opportunity for Australia’s data centres
Australia’s proximity to growing digital economies, as well as an abundance of space and renewable energy, gives the country a significant competitive advantage in the data centre sector. Australia is currently ranked fifth in the world for data centre capacity, behind the USA, China, the UK and Germany.
However, challenges remain in the form of planning approvals, infrastructure and connectivity. Without timely action, Australia risks losing opportunities to neighbouring countries.
“We’ve seen this before in Singapore,” said Ali. “Constraints in infrastructure caused data centre development to stop temporarily, pushing projects to Malaysia and Indonesia. If Australia doesn’t move quickly, the opportunities will appear elsewhere. The pace of data growth will not wait.”
Arcadis is helping clients in data centres address these challenges through comprehensive support across the data centre lifecycle. From market entry strategies and site selection to design, engineering and delivery, the company leverages its global expertise and local knowledge to create resilient and sustainable solutions.
“A new client entering the Australian market often needs insights into market trends, competitor analysis and supply chain dynamics,” said Ali. “We help them develop go-to-market strategies and navigate challenges like land procurement and utility connectivity. Our global network allows us to pull expertise from different regions to ensure clients are prepared for escalating demands.”
The rising electricity consumption of data centres, expected to grow from 400 terawatt-hours in 2023 to 1000 terawatt-hours by 2030, calls for innovative solutions. Arcadis is exploring technologies like modular data centre design and even nuclear energy to overcome grid limitations.
“The challenges will be in how you can procure electricity for data centres and link it to land procurement,” Ali said. “You might secure land, but if the utility isn’t connected, the project can’t move forward. That’s where strategic advisory and planning become critical.”
Arcadis’s expertise in delivering sustainable, cost-efficient and resilient data centres positions it as a key partner for operators navigating this complex landscape.
“Data centres are evolving rapidly, and the opportunities for innovation are vast,” said Ali. “But to capitalise on them, we must act quickly and strategically.”
To learn more about Arcadis’ efficient and future-forward solutions in building a stronger, more sustainable data centre industry, see below blogs –
Replacing diesel generators with battery energy storage systems
Smart environmental monitoring can make data centres energy-efficient
Liquid immersion cooling for sustainable data centres
