Flexibility Key to Addressing Rising Colo Energy Costs

Deteriorating bottom line costs for colocation data centres (colos) caused by market uncertainty has further underlined the need for facility stakeholders to consider flexible energy models in the future, according to Aggreko

It follows a new report from FTI Consulting showing energy prices in UK data centres rising by over 600% since January 2021. With this figure tracking markedly higher than Germany (270%), France (400%) and the Netherlands (360%), the impact on data centre providers using all-in customer models could be sharp and wide-ranging.

Taking this market turbulence into account, Aggreko is encouraging retail colo providers to put steps in place to address what could become a pressing crisis as fixed-price energy contracts expire. Billy Durie, Global Sector Head for Data Centres at Aggreko, explains: “Though the UK data centre market has previously been able to use these previously-agreed terms to largely guard against rising energy costs, this state of affairs cannot continue forever.

“Providers in the colo market working under all-in pricing agreements are especially vulnerable to this encroaching problem, so energy professionals in the sector must ask themselves – how can we guard against this cost? Faced with this question, we anticipate moves toward decentralised energy models to mitigate against the fragility of the national grid, especially as current price hikes are not showing signs of easing.”

Energy-related market turbulence identified in FTI Consulting’s report could further supercharge an already-competitive colo marketplace, driven by exponential demand for data centre services. According to Aggreko, current volatility cannot be translated into a race-to-the-bottom cost mentality, and the deprioritisation of environmental goals that may ensue.

“It cannot be denied that the data centre market is currently in a delicate position, but these pressing concerns should not be met at the cost of long-term sustainability strategies,” Billy concludes. “Instead, stakeholders must look for packages and services that can bridge the energy gap while lowering emissions. Green technologies such as Stage V generators and hybrid battery systems, provided through innovative hire strategies, offer an effective way of achieving both objectives.”

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