Data centres consume vast amounts of electricity, but are not necessarily the main cause of grid peaks

The energy consumption of data centres has recently attracted considerable attention. Microsoft’s data centre in the Dutch village Middenmeer, for example, consumed approximately 1.17 terawatt hours (TWh) of electricity last year. This is more than 1 per cent of total electricity consumption in the Netherlands. Data centres collectively are estimated to account for around 4.6 per cent of Dutch electricity consumption. This share could rise to approximately 17 per cent over the next decade. ‘If you look at energy consumption per square metre, data centres are obviously enormous consumers of electricity,’ Huisman says. ‘These are extremely energy-intensive buildings. They are, in fact, a very particular type of real estate.’

Constant demand versus peak demand

According to Huisman, the impact of data centres on the electricity grid should not be assessed solely on the basis of their total energy consumption. The timing of electricity consumption is also important. Like hospitals, data centres consume electricity almost continuously. This differs from offices and households. Offices primarily consume electricity during the day, while household electricity consumption often peaks in the evening and at weekends. ‘The grid is not completely full, but it is congested at certain times,’ Huisman explains. ‘This raises the question of who is actually causing the peak problems on the grid.’

According to the professor, data centres are not necessarily the main culprit. ‘They consume roughly the same amount of electricity constantly. Households, on the other hand, often return home at around 6 p.m. and start using electricity. From the perspective of grid congestion, households may actually be more problematic than data centres.’

Looking beyond total consumption

Huisman stresses that both aspects need to be taken into account: total energy consumption and the timing of that consumption. ‘You have to look at both sides: when electricity is consumed and the total amount consumed. The consumption per square kilometre is, of course, extremely high for data centres.’

Other types of real estate will also consume more electricity in the coming years, Huisman expects. The increasing digitalisation of healthcare, for example, could drive higher energy consumption in hospitals. Households are also likely to use more electricity, partly due to the growth of electric vehicles.

A better match between production and consumption

To reduce grid congestion, municipalities and real estate stakeholders should pay greater attention to the relationship between when electricity is produced and when it is consumed, Huisman argues. ‘We are installing a lot of solar panels on rooftops. But the sun is out during the day, while households consume electricity in the evening. That is a mismatch.’ This creates opportunities for the real estate sector. Offices consume relatively large amounts of electricity during the day, meaning that solar panels on office buildings can align well with their consumption profile. For homes, batteries could potentially help store solar power generated during the day for use in the evening.

According to Huisman, the challenge for real estate owners and developers is therefore to align electricity production and consumption as closely as possible. ‘That can help alleviate part of the grid congestion problem.’