News & media The Hot Topic of Data Centres – Data Centres Demystified Series
Article 2: Data Centres Demystified: The real challenges and considerations
Data centres are often portrayed as energy-hungry, water-thirsty, environmentally unsustainable facilities, and even a potential health risk. While these criticisms sometimes hold kernels of truth, they are frequently oversimplified or misunderstood. In article one, we explored the types of data centres and how they operate. Here, we take a closer look at common claims, separate myths from reality, and highlight the real challenges that lie beneath them.
Myth 1: Data centres just store cat videos and trivial internet content
Reality: One of the biggest reputation issues that data centres face is the misconception about their purpose. Many people assume they are home only to mindless internet activity, from billions of cat videos to endless ChatGPT conversations. However, in reality, data centres are the backbone of modern lives. Critical services such as healthcare, travel, banking and government all rely on this infrastructure to operate reliably and securely[1] and are increasingly integrating AI in order to become more efficient.
The recent boom in AI has further intensified scrutiny, as AI workloads are becoming a major driver of data centre expansion. Energy use from AI is predicted to account for up to 20 percent of global data-centre power demand[2]. As AI systems continue to grow, more data centres will be needed, raising the challenge of supplying sufficient energy sustainably.
Myth 2: Data centres consume massive amounts of energy with no regard for sustainability
Reality: Data centres do require large amounts of energy, but while internet traffic increased by 440% between 2015 – 2021, data centres’ global energy use remained relatively flat, registering a 10% increase[3], mainly due to improvements in infrastructure efficiency. Through intelligent design and analysis of capacity needs, data centres can prevent over-provisioning infrastructure and adjust resources to match demand. For example, hyperscalers have been implementing task shifting technologies that allow for the dynamic routing of computing power to cleaner sources of energy. They can also plan for an increase or decrease in data centre infrastructure resources, based on whether internet activity is at a peak or not.
Myth 3: Data centres hold back the shift to a cleaner economy
Reality: Data centre operators are some of the biggest investors in clean energy, driven by their net-zero commitments[4]. Many operators are turning to Power Purchase Agreements (PPAs), which secure long-term energy directly from renewable sources like wind or solar farms. In 2024, internet giants accounted for 43% of PPAs signed during the year[5]. These agreements not only guarantee a supply of clean energy but also actively support new renewable projects, reducing reliance on traditional energy grids and promoting industry-wide sustainability goals.
PPAs and other direct energy sourcing arrangements allow data centres to bypass the public grid, reducing dependency on local infrastructure and minimising transmission costs and losses, which can be advantageous for sites facing delays in grid connections. When paired with clean energy storage solutions, like batteries, these systems provide a reliable power supply even when renewable generation fluctuates, helping data centres operate sustainably.
Myth 4: Data centres pollute the air and harm public health
Reality: Some studies, including research from UC Riverside and Caltech, have raised concerns about emissions from data centres and the associated impact on public health. Using a modelling tool developed by the US Environmental Protection Agencies, they estimated over US$5.4 billion in data centre associated healthcare expenses across the United States within the past five years, with Google, Microsoft and Meta identified as major contributors[6].
It is important, however, to consider scale and mitigation measures. The study includes all emissions associated with the energy used by data centres, much of which comes from regional electricity grids still reliant on fossil fuels. This means that emissions are not coming directly from the data centre itself, but from power generation more broadly. If data centres did not exist, those services would still require electricity elsewhere, potentially in smaller, less efficient servers distributed across many locations, which would potentially increase total emissions.
Modern data centres also implement advanced emission reduction strategies, including high-efficiency servers, AI-driven cooling, renewable energy sourcing, and power optimisation. These measures are actively reducing the actual local emissions footprint compared with older, less efficient facilities. In other words, while health impacts might exist where fossil fuel energy is used, the narrative that data centres are uniquely or unavoidably harmful is misleading; ultimately, the most urgent need will be for the electricity grids to become carbon-free, and governments will have to work together with the tech industry to make that happen.
Myth 5: Data centres need large amounts of water
Reality: As chips become more efficient, they are getting smaller – more transistors accumulated in smaller areas meant that electrons could move faster, but it also means that they heat up faster. Cooling is therefore essential for data centre operations, and water use has understandably drawn scrutiny, especially in regions facing scarcity. However, the reality is that water consumption varies dependent on climate, location, and cooling technology, so climate normalisation needs to be integrated into calculations of Water Usage Effectiveness (WUE) and local water scarcity must be assessed before building any new facilities. The type of water used, and water-saving technologies also matter – many data centres are increasingly employing AI-driven cooling, recycled wastewater or black / sea water, liquid immersion cooling, and heat reuse to reduce water use. Water cooling also decreases the need for chillers and refrigerant gasses, which means that data centres cooled in this way can reach significantly lower Power Usage Effectiveness (PUEs).
Operators are also investing in transparent monitoring and reporting to ensure that water use is carefully measured, managed, and optimised. While water is a critical resource, modern data centres treat it as a controlled and managed input rather than an uncontrolled drain on local supplies.
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Overall perspective matters. Data centres enable centralised, optimised computing that powers the modern world, but they are not without their challenges. However, not all data centres are alike and a nuanced analysis of their environmental footprint needs to be performed when assessing their impact. Myths about waste and harm often obscure the realities of their operation. Underneath the headlines lie real considerations–energy, water, and emissions–that require thoughtful management and innovation.
In Article 3, we’ll explore what’s being done to make data centres more sustainable, examining both overlooked innovations and why context is everything when it comes to building greener, more efficient facilities.
[1] BBC, “Data centres as vital as NHS and power grid, government says” , 12 September 2024, https://www.bbc.co.uk/news/articles/c23ljy4z05mo
[2] Wired, “AI Is Eating Data Center Power Demand—and It’s Only Getting Worse”, 22 May 2025, https://www.wired.com/story/new-research-energy-electricity-artificial-intelligence-ai/
[3] Forbes, “How Data Centers Are Driving The Renewable Energy Transition”, 13 March 2023, https://www.forbes.com/sites/siemens-smart-infrastructure/2023/03/13/how-data-centers-are-driving-the-renewable-energy-transition/
[4] Bloomberg NEF, “Power Hungry Data Centers Are Driving Green Energy Demand”, 26 August 2025 https://about.bnef.com/insights/clean-energy/power-hungry-data-centers-are-driving-green-energy-demand/#:~:text=Data%20center%20operators%20are%20actively,commitments%20and%20emerging%20government%20regulations.
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[6] The Financial Times, “Pollution from Big Tech’s data centre boom costs US public health $5.4bn”, 28 February 2025, https://www.ft.com/content/d595d5f6-79d1-47eb-b690-8597f09b39e7