Climate Change Exacerbating Environmental Threats To Data Centers

Environmental risk has always been a factor in data center site selection and design, but climate change is dramatically increasing the threat to these mission-critical facilities from extreme weather and other natural disasters, researchers say. 

Two studies, published separately this month by climate risk analysis firm XDI and consultancy Maplecroft, suggest that while many data centers already face elevated physical risks from flooding, forest fires, extreme heat and other climate-exacerbated disasters, these hazards will threaten far more facilities in the coming years. 

The data center industry needs to start taking these long-term climate risk projections into account when designing and building data centers, the reports’ authors say. Otherwise, data center firms will have to contend with significantly higher insurance premiums and operating costs, if not severe damage to the facilities themselves

“While data centres are designed with redundancy and disaster recovery in mind, many existing sites were built based on historical weather patterns — not the escalating volatility of today’s climate,” the XDI report says. “It is therefore imperative that asset owners, operators and investors understand the physical climate risks facing both existing and planned data centres — and what steps can be taken to build resilience into these critical assets.”

According to XDI, 6.25% of data centers worldwide are at high risk from climate hazards, meaning that there is a high probability of total or partial physical damage to the data center within the planned life of the building.

Additionally, 15.7% of today’s data centers are considered to be at moderate risk. By 2050, the share of high-risk data centers is expected to rise to more than 7.1%, while facilities at moderate risk are projected to leap to 19.6%. 

While the study’s projections for the overall U.S. market hew closely to these global forecasts, some of the country’s most important data center hubs have much higher risk levels.

The New Jersey market faces the greatest threat from climate-related hazards, with 1 in 5 data centers expected to be at high risk by 2050 due primarily to coastal inundation and surface water flooding. 

Data centers in Massachusetts, Michigan and Oregon are expected to contend with a similar level of risk, with the large Oregon market experiencing elevated threats from forest fires. 

As data centers face risks from the effects of climate change, they are also increasingly contributing to the issue with their own carbon emissions. A Morgan Stanley report in September projected that the emergence of artificial intelligence will lead greenhouse gas emissions from data centers to triple by 2030. 

Although XDI’s study didn't factor in the direct impact of rising global temperatures, extreme heat events were the focus of the Maplecroft report, which concluded that the majority of the world’s major data center hubs face heat-related risks. 

According to Maplecroft, around three-quarters of the world’s data center markets will have to meet significantly higher cooling demands for longer periods each year. The top 100 industry hubs will see, on average, an 83% increase in days that require additional cooling from 2030 to 2080.

These growing cooling requirements will increase water and electricity demand and have vast repercussions, potentially creating conflicts with local communities where water and power have become scarce resources, according to the report.  

Another cost that is set to climb alongside increased climate hazards is insurance.

Climate change-related extreme weather is already impacting the insurance market for data centers, with insurers reassessing risk models and commanding higher premiums and stricter coverage terms, according to XDI. Those premiums could be four times higher by 2050 if data center firms don’t invest in making their facilities more resilient.

“Climate-exposed data centre operators face rising insurance costs, challenges securing coverage, and the threat of stranded assets as insurers and investors increasingly price in climate risk,” the report’s authors wrote.

Both reports emphasized the ability of data center developers and operators to limit their risk from these climate hazards by changing how their data centers are designed and built.  

The number of projected high-risk facilities in 2050 decreases by 72% if owners implement mitigation strategies based on the specific risks to their facilities, according to XDI. Such measures include flood mitigation strategies like raising critical equipment above ground level and installing flood barriers and fire prevention solutions like the use of fire-retardant materials and the installation of external sprinkler systems.  

The report's authors said it is imperative that data center builders take long-term climate projections into account as they site, design and build new facilities at an unprecedented pace. It is not only a matter of these companies’ bottom lines but also a matter of protecting assets that have become critical infrastructure underpinning national security, financial stability and global commerce.  

“These facilities are long-lived assets: while hardware may be replaced every 15-20 years, the buildings themselves may last more than five decades,” the report says. “The decisions made today — about where and how we build and upgrade data centres — will shape systemic resilience for decades to come.”