Written by David Freitas, Investment writer at 7IM
It’s an accepted truth (an annoying one) that we’re often forced to compromise to solve problems.Â
Take transport as an example.
Walking everywhere is exhausting. Being the resourceful humans we are, we started using horses to get from A to B. Unfortunately, that comparative speed meant compromise. In this case with sanitation (imagine the smell of manure in the big cities, and all the insects spreading diseases!).
Fast forward. Cars came into circulation more widely – no more manure – but oh. The comfort and cleanliness were favoured to the detriment of the environment (a different kind of emission!).
And today. Riding over the horizon to solve the emission problem are herds of electric cars. The carbon emissions problem is no longer one humans can afford to compromise in favour of. But that comes at a price… the cycle continues.
But what about outside of the easy example of cars? Data is an excellent case study.
As artificial intelligence grows meteorically, there is an insatiable thirst for data. The power demand for data centres is estimated to grow 160% by 2030.
But here’s the rub. In Europe, increasing demand means the power needs of data centres in the region will equate the current total energy consumption of Portugal, Greece and the Netherlands combined!*
I’m not sure that’s a compromise (data over light and heat) that residents would sign up to.
However… there is a compromise the data centres can make. Location.
Fortunately, these centres are usually located in the middle of nowhere. Here’s one in Iceland, a country where the number of data centres is quickly growing:
Verne Global. Source: MIT Technology Review
Not ideal if you favour a Pret sandwich at lunchtime, but what that does offer is SPACE. Plenty of it. And space is exactly what you need for renewable energy production.
This has noticeably driven demand for energy originating from renewable sources:
Source: Bloomberg.
Amazon thrives on data. It was also by far the largest consumer of renewable energy last year, having bought more solar and wind power than the next three companies combined.
As we and therefore our needs evolve, demand for goods or services impacts the environment around us. Fortunately, data centres don’t make many ‘top 10 places to visit’ lists, so the compromise made in this case feels like one we can live with (…for now).
