International Construction Law Review
MORE WATTS FROM LESS CARBON; THE CHALLENGES OF INNOVATING TO ACCOMMODATE THE ENERGY DEMANDS OF DATA CENTRE PROJECTS WITHOUT COMPROMISING NET ZERO
Roberta Downey1
Vinson & Elkins
ABSTRACT
“During a severe drought, when the birds could find very little to drink, a thirsty crow came across a pitcher with a little water at the bottom. But the pitcher was high and had a narrow neck, and no matter how he tried, the water was beyond the reach of its beak. Unable to push the pitcher over, the crow dropped pebbles into the pitcher until the water rose near enough so he could drink.”2
INTRODUCTION: A UNIVERSAL NEED TO INNOVATE
The convergence of first, economic demand to build more and larger data centres, and second, the political, social and environmental necessity to cut carbon emissions, is driving innovation in the construction and engineering sector at a pace and scale comparable to the first Industrial Revolution.3 Construction projects in both sectors are attracting massive investment4 but they have competing demands: the digital economy’s insatiable appetite for vast and continuous power conflicts with the push to electrify by replacing fossil fuel generation with more intermittent generation from sources of renewable energy. This dilemma is exacerbated by a backdrop of increasingly volatile global energy markets, aggressive net zero targets, pressure to promote more sustainable development and increasing environmental activism.
1 Roberta Downey is a Partner and Head of International Construction at Vinson & Elkins.
2 Aesop’s Fable, “The Crow and the Pitcher”, Fable 390 in the Perry Index.
3 In 2016, Klaus Schwab, the founder and executive chairman of the World Economic Forum, described the current era of connectivity, advanced analytics, automation and advanced manufacturing technology as the “Fourth Industrial Revolution”. Just as steam propelled the original Industrial Revolution (from 1760 to 1840); electricity and automated machinery the second (from 1870 to 1914); computers and digitalisation the third (from the 1950s to the early 2000s); cyberphysical systems and intelligent computers have now ushered in the Fourth Industrial Revolution or “Industry 4.0” or “4IR”.
4 Capital expenditure on digital infrastructure surged after ChatGPT was launched to the public in 2022 and, by the end of 2024, is expected to have surpassed US$400 billion. See “Data center spending skyrockets as cloud building rush accelerates”, Ashare, M, CIO Dive, 30 September 2024.
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