The world's data centers are facing a climate crisis, and it's not just a matter of flooding and fire. A recent study by First Street, a climate risk analytics firm, reveals that nearly 80% of data center capacity is at elevated risk to acute climate hazards, including severe climate-induced events such as flooding, extreme winds, and wildfires. This is a critical issue that needs to be addressed by investors and developers alike.
The study found that just over half of all data centers globally are in markets exposed to chronic climate stress, such as extreme heat and drought, which can hit energy efficiency and increase costs. While risk can be heightened by exposure to singular climate-driven events, such as strong hurricanes, it is the chronic effects of climate change that can cause the most damage, both physically and financially.
The danger, according to the study's findings, is that investors may be looking at traditional metrics when developing data centers and not taking into account that climate could impact long-term operating conditions. Data centers are typically expected to be in operation for 20 to 30 years, and the effects of climate change can have a significant impact on their performance.
One of the key issues is that government models are outdated because they look at past levels of precipitation and do not factor in the effects of climate change. As the Earth warms, clouds hold more moisture and rainfall becomes heavier, which can lead to more severe flooding and other climate-related events.
To address this issue, developers and operators need to take climate into account as they design data centers. Some developers, such as Digital Realty, are already working to make sure they have enough water to cool their centers, and are implementing resilient measures for building envelopes to protect structures from severe weather events.
However, it's the actual systems that connect to the data centers that are most important in terms of understanding both internal and external vulnerabilities to climate risk. Developers need to look beyond building and parcel-specific risk to a systems-level thinking, which means understanding infrastructure and community demographics.
The study also found that some areas are more prone to climate risk than others. The Asia-Pacific region has 89% of its data center capacity at risk, the highest percentage of any geographic area, compared to 50% exposure in the Americas and 46% in Europe, the Middle East, and Africa. Some of the industry's fastest-growing markets are also the most exposed, including Northern Virginia in the U.S., as well as Johor in Malaysia and Marseille, France.
In conclusion, the world's data centers are facing a climate crisis, and it's not just a matter of flooding and fire. Investors and developers need to take climate into account as they design and operate data centers to ensure their long-term resilience and sustainability. The time to act is now, before it's too late.
