Data Centres and Data Transmission Networks

On track
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In this report

Global internet traffic surged by almost 40% between February and mid-April 2020, driven by growth in video streaming, video conferencing, online gaming, and social networking. This growth comes on top of rising demand for digital services over the past decade: since 2010, the number of internet users worldwide has doubled while global internet traffic has grown 12-fold. However, rapid improvements in energy efficiency have helped to limit energy demand growth from data centres and data transmission networks, which each accounted for around 1% of global electricity use in 2019. Strong government and industry efforts on energy efficiency, renewables procurement, and RD&D are necessary to limit growth in energy demand and emissions over the next decade.

Global trends in internet traffic, data centre workloads and data centre energy use, 2010-2019

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Tracking progress

Global internet traffic surged by almost 40% between February and mid-April 2020 during the height of the Covid-19 containment measures, driven by growth in video streaming, video conferencing, online gaming, and social networking1. This growth comes on top of rising demand for digital services over the past decade: since 2010, the number of internet users worldwide has doubled while global internet traffic has grown 12-fold, or around 30% per year.367

Demand for data and digital services is expected to continue its exponential growth over the coming years, with global internet traffic expected to double by 2022 to 4.2 zettabytes per year (4.2 trillion gigabytes). The number of mobile internet users is projected to increase from 3.8 billion in 2019 to 5 billion by 2025, while the number of Internet of Things (IoT) connections is expected to double from 12 billion to 25 billion.8 These trends are driving exponential growth in demand for data centre and network services.

Most of the world’s Internet Protocol (IP) traffic goes through data centres. Greater connectivity is therefore propelling demand for data centre services and energy use (mostly electricity), with multiplying effects: for every bit of data that travels the network from data centres to end users, another five bits of data are transmitted within and among data centres.4

Global data centre electricity demand in 2019 was around 200 TWh, or around 0.8% of global final electricity demand.2

If current trends in the efficiency of hardware and data centre infrastructure can be maintained, global data centre energy demand can remain nearly flat through 2022, despite a 60% increase in service demand.2

Global data centre energy demand by region, 2010-2022

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Global data centre energy demand by data centre type, 2010-2022

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Strong growth in demand for data centre services continues to be offset by ongoing efficiency improvements for servers, storage devices, network switches and data centre infrastructure, as well as a shift to much greater shares of cloud and hyperscale data centres.

Hyperscale data centres are very efficient large-scale cloud data centres that run at high capacity, owing in part to virtualisation software that enables data centre operators to deliver greater work output with fewer servers.

The shift away from small, inefficient data centres towards much larger cloud and hyperscale data centres is evident in the shrinking share of data centre infrastructure in total energy demand, given the very low power usage effectiveness (PUE) of large data centres. PUE is a measure of how efficiently a data centre uses energy; the very best hyperscale data centres can have PUE values of around 1.1 (meaning 0.1 kWh used for cooling/power provision for every 1 kWh used for IT equipment).

Data transmission network technologies are also rapidly becoming more efficient: fixed-line network energy intensity has halved every two years since 2000 in developed countries,9 and mobile-access network energy efficiency has improved by 10‑30% annually in recent years.1011 For example, Sprint has reduced its network energy intensity by more than 80% between 2014 and 2018, keeping total network energy consumption flat.

Data networks consumed around 250 TWh in 2019, or about 1% of global electricity use, with mobile networks accounting for two-thirds. Based on current efficiency improvement trends, electricity consumption is projected to rise to around 270 TWh in 2022.

Several trends are shaping the future of data network electricity use. Global IP traffic doubled between 2016 and 2019, and is projected to double again by 2022.6 The nature of data transmission is changing rapidly, with traffic from wireless and mobile devices expected to make up more than 70% of total IP traffic by 2022, up from around 50% in 2019.5

This shift towards greater use of mobile networks may also have significant implications for the energy use of data transmission networks, given the considerably higher electricity intensities (kWh/GB) of mobile networks compared with fixed-line networks at current traffic rates.

Mobile networks are rapidly shifting away from older 2G and 3G technology towards more efficient 4G and 5G. By 2022, 4G and 5G networks are expected to carry a combined 83% of mobile traffic, compared with less than 1% for 2G.5

4G networks are roughly five times more energy efficient than 3G and 50 times more efficient than 2G. The overall energy and emission impacts of 5G are still uncertain. While a 5G antenna currently consumes around three times more electricity than a 4G antenna, power-saving features such as sleep mode could narrow the gap to 25% by 2022.1213 Network infrastructure providers and operators are projecting that 5G could be up to 10 to 20 times more energy-efficient than 4G by 2025-30.

Demand for data centre and network services will continue to grow strongly, driven in particular by rapidly growing demand from streaming video and gaming. Between 2019 and 2022, traffic from internet video is projected to more than double to 2.9 ZB, while online gaming is projected to quadruple to 180 EB.6 Together, these streaming services are projected to account for 87% of consumer internet traffic in 2022.

Additionally, emerging digital technologies such as machine learning, blockchain, 5G, and virtual reality are also poised to raise demand for data services.

For example, electricity used by Bitcoin miners – one prominent example of emerging blockchain IT infrastructure – likely consumed 50-70 TWh in 2019, or 0.2‑0.3% of global electricity use.1514 However, as blockchain applications become more widespread, understanding and managing their energy-use implications may become increasingly important for energy analysts and policy makers.

Information and communications technology (ICT) companies are major investors in renewable energy, protecting themselves from volatile power prices, reducing their environmental impact and improving brand reputation. In fact, ICT companies accounted for about half of global corporate renewables procurement in the past five years16

Hyperscale data centre operators in particular are leaders in corporate renewables procurement, particularly through power purchase agreements (PPAs). The top four corporate off-takers of renewables in 2019 were all ICT companies, led by Google.16 In 2018, Google (10 TWh) and Apple (1.3 TWh) purchased or generated enough renewable electricity to match 100% of their data centre energy consumption. Equinix consumed 5.2 TWh in 2018 (92% renewables) while Facebook data centres consumed 3.2 TWh (75% renewables). Amazon and Microsoft sourced about half of the data centre electricity from renewables. 

Top corporate off-takers, 2019

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Global PPA volumes by sector, 2009-2019

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While these achievements are impressive, matching 100% of annual demand with renewable energy purchases or certificates does not guarantee that data centres are actually 100% powered by renewable sources all the time. Wind and solar are variable sources that may not match the demand profile of a data centre, and renewable energy purchases might even be for a different grid or region.

More ambitious approaches to carbon-free procurement and generation can have an even greater environmental benefit, specifically by accounting for both location and time. Google, for instance, has set a long-term goal to source carbon-free energy on a “truly 24x7 basis”. In April 2020, it announced a new computing platform to shift computing tasks to times when low-carbon sources are plentiful.

Data centres operators investing in renewable energy, working with electricity utilities, regulators and project developers, should seek to identify projects that maximise benefits for the local grid and also reduce overall GHG emissions.

Demand for data centre and network services is expected to continue to grow strongly, but how this affects energy use will still be determined largely by the pace of energy efficiency gains.

Government policies, as well as data centre and network operator actions and commitments, will be essential to support further efficiency improvements to moderate overall ICT energy use. The incentive to reduce energy use is strong, as energy costs make up a significant share of ICT companies’ operational expenditures (e.g. 20-40% for network operators).

Improving data collection on ICTs and their energy-use characteristics can help inform energy analysis and policymaking. For example, the US Energy Information Administration collects data on connected devices in homes (RECS) and commercial buildings (CBECS), as well as on servers in data centres (CBECS).

In its digital strategy released in February 2020, the European Commission included a key action for the ICT sector to achieve climate neutrality by 2030 while improving data collection and transparency: “Initiatives to achieve climate-neutral, highly energy-efficient and sustainable data centres by no later than 2030 and transparency measures for telecoms operators on their environmental footprint”.

Companies and industries are increasingly setting voluntary efficiency and CO2 emissions targets. In February 2020, the ICT industry agreed on a science-based target to reduce GHG emissions by 45% between 2020 and 2030. In the European Union and the United States, companies have adopted voluntary agreements to improve the efficiency of connected set-top boxes.

Data centres can be a more efficient and flexible resource in the grid than they are today. Governments can encourage further energy efficiency through guidance, incentives and standards, while regulations and price signals could help incentivise demand-side flexibility.17 Huang and Masanet (2015) offer a summary of best practices and how to calculate savings for incentives programmes.

Governments and grid operators can work with data centre operators to determine how renewable energy investments can most optimally benefit the whole system as well as contribute towards national energy and climate targets. Investment in energy storage and other demand-side response capacity can also be encouraged as a complement to more renewable capacity.

Governments and network operators could be instrumental in implementing policies and programmes to improve the energy efficiency of data transmission networks.

Actions could include accelerating the phase-out of energy-intensive legacy networks, implementing network device energy efficiency standards, improving metrics and incentives for efficient network operations, and supporting international technology protocols.

Demand for data centre services will continue to grow strongly, driven by media streaming and emerging technologies such as AI, virtual reality, 5G and blockchain. As efficiency trends of current technologies slow (or even stall) in upcoming years, new, more efficient technologies will be needed to keep pace with growing data demand.

Resources
Acknowledgements

Many thanks to Eric Masanet (University of California, Santa Barbara) for his ongoing support of this analysis.

References
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  13. Huawei (2019). 5G Telecom Power Target Network White Paper, https://carrier.huawei.com/~/media/CNBGV2/download/products/network-energy/5G-Telecom-Energy-Target-Network-White-Paper.pdf

  14. Cambridge Centre for Alternative Finance (2020). Cambridge Bitcoin Electricity Consumption Index (CBECI), https://www.cbeci.org/

  15. Kamiya, G. (2019). Bitcoin energy use - mined the gap, commentary, IEA, Paris, https://www.iea.org/commentaries/bitcoin-energy-use-mined-the-gap

  16. BloombergNEF (2020). Corporate PPA Deal Tracker: March 2020, https://www.bnef.com/core/insights/22615

  17. 4E EDNA (2019). Intelligent Efficiency for Data Centres and Wide Area Networks, https://www.iea-4e.org/document/428/intelligent-efficiency-for-data-centres-and-wide-area-networks.