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With digital transformation accelerating at an unprecedented pace and generative AI going mainstream, the environmental impact of data centres has come under increasing scrutiny.
Data centres are the backbone of our digital world. This infrastructure helps boost productivity and support economic development for large New Zealand organisations as well as the hundreds of thousands of small and medium-sized businesses that make up much of the economy.
But data centres are also significant consumers of electricity and contributors to greenhouse gas emissions.
Today, the global data centre industry uses around 1.5% of the world's electricity supply, with projections suggesting that figure could rise significantly by 2030. The largest source of emissions, accounting for around 70%, comes from the electricity required to power data centres and the high-performance computing infrastructure they host. The remainder largely comes from backup power generation and cooling systems.
Aotearoa's high proportion of renewable energy generation gives New Zealand an advantage when it comes to operating data centres sustainably. However, with growing demand from electric vehicles, industrial electrification and emerging AI workloads, pressure on renewable energy supply continues to increase.
Against this backdrop, Datacom is taking proactive steps to reduce the emissions footprint of its data centre operations and help customers scale their digital operations more sustainably.
“As organisations across New Zealand continue to invest in AI and digital transformation, the infrastructure supporting that growth needs to be both sustainable and resilient,” says Datacom Director Data Centres, Matt Neil.
“We're investing in local data centre capability that gives customers confidence their workloads can scale while supporting their own sustainability goals and maintaining control over critical data and services.”
To reduce energy consumption and minimise emissions across its data centre operations in New Zealand and Australia, Datacom is focused on five key areas.
One of the primary metrics used to measure data centre efficiency is Power Usage Effectiveness (PUE).
PUE is calculated by dividing the total energy consumed by a facility by the energy used by the IT equipment itself. A PUE of one represents an ideal scenario, where all energy consumption is dedicated solely to running IT infrastructure.
Datacom's objective is to move as close as possible to that benchmark by ensuring supporting infrastructure such as cooling, lighting and power systems operate as efficiently as possible. Optimising utilisation across facilities to achieve economies of scale is also an important part of the equation. Over time, improvements in processor and server efficiency are expected to further reduce power consumption.
Datacom continues to increase the use of renewable energy across its operations.
A long-term agreement with energy provider Mercury provides 100% certified renewable electricity across Datacom's New Zealand data centres through a fixed-price arrangement extending over 10 years.
While New Zealand's electricity market does not allow providers to guarantee renewable generation every hour of every day, agreements such as this support ongoing investment in renewable energy projects and contribute to increasing the overall renewable capacity of the national grid.
Cooling remains one of the largest contributors to data centre energy use, making efficiency gains in this area particularly important.
At Datacom's Kapua facility, outdoor air-side economiser technology is used for the majority of cooling requirements. This significantly reduces reliance on energy-intensive mechanical cooling systems. The facility also uses a closed-loop water cooling system to reduce water consumption.
By using outdoor air for cooling around 80% of the time, Datacom is able to minimise the use of traditional chillers and lower overall energy consumption.
The environmental performance of a data centre is heavily influenced by decisions made during design and construction.
Datacom builds energy efficiency into its facilities from the outset, recognising that larger-scale infrastructure can achieve significantly better efficiency than smaller, distributed environments.
For example, the Kapua data centre is capable of delivering the equivalent services of around 1,000 individual two-rack server rooms while producing substantially lower emissions. The facility currently operates at an average PUE of approximately 1.3, with further improvements expected as customer utilisation increases.
Given that large-scale data centres require significant capital investment and ongoing operational expenditure, environmental sustainability and commercial sustainability must be considered together to deliver long-term value for both Datacom and its customers.
Datacom supports onsite recycling programs for customers and recycles a wide range of materials, including cardboard, surplus cabling and end-of-life IT equipment.
This commitment extends to the selection of consumables and operational materials, with a focus on products that minimise environmental impact wherever practical.
Datacom's sustainability efforts have already delivered measurable progress, including substantial reductions in operational emissions over recent years.
However, challenges remain. Areas such as replacing diesel-powered backup systems with commercially viable alternatives continue to require innovation and investment.
Continuous improvement remains central to Datacom's approach. As technologies evolve, customer expectations change and industry standards mature, the organisation continues to review its operations, pursue recognised certifications and identify new opportunities to reduce environmental impact.
As demand for digital services continues to grow, the environmental impact of data centres will remain an important consideration for organisations across New Zealand and Australia.
As part of the continued evolution of its climate programme, Datacom has committed to achieving carbon neutrality across Scope 1 and Scope 2 emissions by 2030.
This target reflects a focus on reducing operational emissions across Datacom's facilities, offices and data centres, while strengthening transparency, accountability and climate governance.
Datacom's approach prioritises emissions reduction first, with any residual emissions neutralised through independently verified, high-quality carbon credits aligned with recognised international standards.
The company will continue to publicly report its progress, methodology and emissions performance as it works towards its 2030 commitment.
By continually improving operational efficiency, integrating renewable energy and investing in sustainable infrastructure, Datacom is helping build the resilient digital foundations organisations need while reducing the environmental impact of the technology they rely on every day.
Datacom provides high secure, reliable and scalable colocation data centre services across New Zealand and Australia, that can be customised to meet your changing needs.
