U.S. Sustainable Data Center Market - Industry Outlook & Forecast 2024-2029

KEY TRENDS

Increased Focus on Renewable Energy Sources

• Major hyperscale operators, such as AWS, Google, Meta (Facebook), Microsoft, and Apple, are procuring renewable energy for their facilities in the U.S. sustainable data center market.
• For instance, AWS meets 85% of its energy requirements from renewable energy. Google, Meta (Facebook), and Apple meet 100% of their energy requirements for data centers from renewable energy. Microsoft aims to power all data centers with 100% renewable energy by 2025.
• Colocation operators such as Equinix, Digital Realty, CyrusOne, Vantage Data Centers, STACK Infrastructure, Iron Mountain, QTS Realty Trust, Aligned Data Centers, and others are proactively signing Power Purchase Agreements (PPAs) and procuring renewable energy to power their data center facilities to meet their sustainability goals.
• Digital Realty meets 100% of its data center energy requirements from renewable energy. QTS Realty Trust meets 35% of its energy requirements from renewable energy, and it targets 100% renewable energy by 2025.

Emerging Trends to Power Data Centers

• Hydrotreated Vegetable Oil (HVO) fuel is increasingly being used in the U.S. sustainable data center market as part of the push toward sustainability and reduced carbon footprint. For instance, in April 2024, Digital Realty announced its plan to deploy HVO to some of its diesel generators across the data center facilities in Oregon and California.
• Fuel cells are emerging as a promising solution for powering data centers due to their numerous advantages. Fuel cells can potentially revolutionize the data center industry by providing clean, efficient, and reliable power. For instance, in July 2024, CoreWeave, the GPU cloud provider, announced its plan to deploy fuel cells supplied by Bloom Energy in one of its data center facilities in Illinois.
• Microgrids and smart grids can be adopted by data center operators functioning in regions with an uncertain power supply owing to factors such as natural disasters and power fluctuations.
• Companies are developing innovative lithium-ion battery solutions tailored for data center applications. For instance, Google has implemented lithium-ion batteries in multiple data centers, including one in Alabama, to improve power efficiency and reliability.

Government Push Toward Sustainability

• The U.S. government made significant strides in achieving its goals outlined in the Federal Sustainability Plan.
• The aim is to have all government buildings produce zero emissions by 2045, with a halfway target of a 50% reduction by 2032.
• The goal is to achieve net-zero emissions from Federal procurement by 2050, incorporating a Buy Clean program to encourage using construction materials with lower embodied emissions.
• The plan is for all Federal operations to produce no net emissions by 2050, with a significant 65% reduction in emissions targeted by 2030.

SEGMENTATION INSIGHTS

Electrical Infrastructure

• Compass Data Centers and Foster Fuels made an agreement together to produce Hydrogenated Vegetable Oil (HVO) based biodiesel for Compass Data Centers’ generators.
• Google has partnered with Fervo Energy to develop a geothermal power project to add clean energy to the Nevada power grid.
• Rolls-Royce announced its plan to offer small nuclear reactors for US-based cloud operators such as AWS, Google, and Microsoft.
• Microsoft has partnered with Eaton, which will outfit all of Microsoft’s data centers with grid-interactive UPS.

Mechanical Infrastructure

• U.S. food company Cargill announced plant-based immersion cooling for its data centers.
• In January 2024, Danfoss is partnering with Google to supply cooling and heat reuse systems for Google's data centers. In addition, Google will provide artificial intelligence solutions to enhance customer experience, streamline internal processes, and improve overall productivity for the multinational engineering group.
• Companies have also adopted free cooling, zero-water cooling, and other methods to reduce their carbon footprint.
• Innovative cooling techniques, such as underwater and floating data centers, bring more efficiency to data center cooling.

General Construction

• Hyperscale operators such as AWS, Microsoft, Meta, Apple, and Google are leading in using sustainable materials for data center construction.
• Companies are introducing technologies such as green concrete, modular data centers, and more into their data center construction.
• AWS and American Rock Products collaborated to develop sustainable concrete for a concrete mix for its data centers.
• In September 2023, Microsoft was testing eco-friendly concrete blends at its data center in Quincy, Washington. The company is experimenting with concrete recipes that use ingredients such as microalgae, fly ash, and slag to reduce carbon dioxide emissions associated with concrete by 50%.

SEGMENTATION BY INFRASTRUCTURE

• Electrical Infrastructure
• Mechanical Infrastructure
• General Construction

GEOGRAPHICAL ANALYSIS

• The Southeast U.S. is a major hub for renewable energy, boasting significant advances and investments in various sustainable energy resources.
• In 2023, the Southeast region led the United States sustainable data center market, contributing to around 40% share of power capacity. This share is expected to increase to over 42% during the forecast period.
• Across the U.S. sustainable data center market, companies are securing long-term renewable energy agreements to ensure a steady supply of green energy. For instance, Microsoft’s data centers in Texas and Iowa benefited from intensive wind and solar energy projects.
• States such as Virginia and North Carolina offer favorable tax incentives and grants to attract data center investments, making them attractive locations for operators.
• By 2050, most states in the U.S. aim to achieve 100% carbon-free electricity.

Segmentation by Geography

• Southeastern U.S.
• Midwestern U.S.
• Southwestern U.S.
• Western U.S.
• Northeastern U.S.

VENDOR LANDSCAPE

The U.S. sustainable data center market is rapidly evolving as organizations prioritize energy efficiency and sustainability.

• Google is among the top operators in the data center industry known for its commitment to sustainability and energy efficiency. The company aims to run all its data centers on carbon-free energy by 2030, and it uses AI to optimize cooling systems, reducing energy use by up to 30%.

Data Center Investors

• Aligned Data Centers
• Amazon Web Services
• Apple
• Centersquare (Evoque)
• CloudHQ
• Cologix
• Compass Datacenters
• CoreSite (American Tower)
• CyrusOne
• DataBank
• DartPoints
• DC BLOX
• Digital Realty
• EdgeConneX (EQT Infrastructure)
• EdgeCore Digital Infrastructure
• Equinix
• Flexential
• Google
• H5 Data Centers
• Iron Mountain
• Meta (Facebook)
• Microsoft
• Nautilus Data Technologies
• Novva Data Centers
• NTT DATA
• Oracle
• PowerHouse Data Centers
• Prime Data Centers
• QTS Realty Trust
• Sabey Data Centers
• Serverfarm
• Skybox Datacenters
• STACK Infrastructure
• Stream Data Centers
• Switch
• T5 Data Centers
• TierPoint
• Vantage Data Centers
• Yondr

Renewable Energy Providers

• Adapture Renewables
• Algonquin Power & Utilities Corp.
• Apex Clean Energy
• Avangrid Renewables
• DE Shaw Renewable Investments
• Dominion Energy
• ECL
• EDF Renewables
• Enel Group
• Engie
• Fervo Energy
• First Solar
• Leeward Renewable Energy
• Invenergy
• Lightsource bp
• NextEra Energy
• Pattern Energy
• Qcells
• Rocky Mountain Power
• Shell
• Solar Alliance Energy
• The AES Corporation
• Torch Clean Energy
• TotalEnergies
• Vitol Energy

KEY QUESTIONS ANSWERED