Critics argue that data centres have a significant carbon footprint and could derail climate goals. However, others contend that relative to global energy use, data centre power draw is still modest (roughly a few percent) and must be weighed against benefits – for instance, AI services potentially delivering efficiency improvements elsewhere.
It’s never that black and white, of course, but in response to sustainability critiques and grid challenges, the data centre industry is rapidly innovating to improve efficiency and green its power sources.
Major operators are adopting advanced designs to squeeze more work out of every watt. For example, cloud giants have invested in next-generation cooling: Microsoft is rolling out liquid immersion and evaporative cooling techniques to cut both energy and water usage, alongside AI-driven software to optimise server workloads.
Amazon Web Services has redesigned its facilities with high-efficiency proprietary hardware and real-time adaptive cooling, achieving industry-leading power usage effectiveness (PUE) and water usage effectiveness.
Data centre providers like Digital Realty report a broad shift from traditional air cooling to liquid cooling systems, which can support denser computing with lower power overhead – over half of Digital Realty’s global sites and counting now utilise liquid cooling.
Beyond cooling, companies are also sourcing cleaner energy to run their servers. Tech firms have signed massive long-term renewable energy contracts and even begun exploring small-scale nuclear power agreements to ensure their data centres are powered by low-carbon sources.
Such deals can stimulate new wind and solar projects (even if the local grid mix remains dirty) and have enabled operators to claim carbon-neutral operations. Industry-wide, there is a trend toward integrating on-site generation and storage – co-locating solar panels, fuel cells, or battery banks with data centres to supply backup power and reduce peak grid draw.
Moreover, many experts see data centres as part of the solution to energy issues: their large, round-the-clock demand can provide a stable revenue base for new renewable projects, while their flexibility in timing certain computing tasks means they can adjust load to support grid stability.
Indeed, researchers note that AI and smart software are now helping to cut data centre energy waste (Google, for instance, used AI to slash cooling power by 40% in its facilities). The International Energy Agency argues that if deployed wisely, AI and data centres could save more emissions in other sectors (through efficiency gains) than they produce, highlighting examples from improved grid management to optimising industrial processes.
However, realising these benefits at scale requires continued investment and supportive policy – a point acknowledged even by optimistic reports. The balance between digital growth and sustainability is thus driving continuous innovation in data centre design, power sourcing and grid integration.
As a Director at Prism Power, I have witnessed first-hand how data centre energy strategy has evolved from a background concern to a boardroom priority. The criticisms raised in global media are not unfounded - communities and regulators are rightfully anxious about the carbon footprint and grid impact of large data centres. We acknowledge, for example, the reports of steeply rising energy usage and instances where data centre clusters taxed local grids.
These challenges underscore why our industry must be proactive. At Prism Power, our focus has always been on sustainable, efficient power solutions tailored to clients’ needs. We’ve been partnering with data centre operators to implement many of the innovations discussed above: from intelligent power distribution systems that improve energy efficiency, to integrating on-site renewables and battery storage for peak shaving and backup.
Such steps not only reduce environmental impact but also make facilities more resilient and grid-friendly. Plus, it’s heartening to see major tech companies invest in greener practices - like the shift to liquid cooling, AI-driven optimisation, plus 24/7 renewable energy sourcing is accelerating. These innovations prove that the industry can adapt. Yet, we also recognise that progress must continue.
Addressing sustainability concerns is an ongoing journey: improving transparency in emissions reporting, utilising waste heat and recycled water, and working closely with utilities on demand-response are all areas of active development.
As an industry, we are moving toward a model where data centres support the energy transition – for instance, by scheduling non-urgent computing tasks to coincide with renewable output or by providing grid services through energy storage and smart controls.
At Prism Power, we see it as our responsibility to help bridge the gap between digital growth and sustainable infrastructure. By designing and delivering power systems that optimise efficiency, reduce waste and incorporate green energy, we aim to ensure that the next generation of data centres can meet booming demand without compromising on climate goals or grid reliability.
The conversation has shifted: rather than viewing sustainability and innovation as opposing forces, leading operators now understand that energy efficiency and grid stewardship are integral to long-term success.
