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How To Improve Data Center Energy Efficiency 

As data centers increase in importance, their considerable energy use will come under scrutiny, both from within the tech industry, and from outside the tech industry. Let’s look at how to improve data center energy efficiency and why it matters. 

What Is a Data Center? 

A data center is a centralized facility that organizations use to house their critical IT systems and infrastructure. Tech companies are building increasingly massive data centers, while large organizations outside the tech sector may build their own centers to house local data. 

Data centers can vary in size, from small server rooms to large facilities with tens of thousands of servers. All data centers share some common characteristics, though, including the goals of optimizing performance, minimizing downtime, and maximizing security for the hardware and data they house. 

Why Is Data Center Efficiency Important? 

Big data centers are energy hungry. These centers’ significant energy consumption is a large concern to the businesses that run them and to society as a whole. However, data centers are becoming too important to tech companies not to build. So, the answer is to find any energy efficiency gains possible and implement them smartly and quickly. 

What Is a Good PUE Ratio? (And Why Does It Matter?) 

The power usage effectiveness, or PUE, is a measure of the energy efficiency of a data center. The ideal PUE ratio is 1.0, as that would indicate every unit of power a data center consumes comes from its IT department and nothing else. Most centers have a rating of 1.2–1.4, though. 

Key Factors That Drive Data Center Energy Consumption 

Here are some features and functions that make data centers such big consumers of energy: 

Cooling Systems and Airflow 

Big data is hot right now. It’s hot as a trend in terms of business practice, but it’s also literally hot. These servers can run a high temperature, so cooling them is critical, lest they overheat and malfunction or fail. 

Data center cooling systems include air conditioning units and liquid cooling mechanisms. Cooling accounts for a significant portion of a data center’s energy use. Furthermore, because the liquid water required must be of a relatively high quality and potable, many are concerned about how much water these centers use. However, some data centers are integrating free air-cooling systems to improve cooling efficiency and lessen their environmental impact. 

IT Hardware and Equipment Usage 

A data center’s servers, storage arrays, and networking gear account for most of its energy usage. These components typically run around the clock, 24-7, 365 days. They handle basic web hosting, complex AI workloads, and everything in between. The exact amount of power necessary varies significantly based on the type and age of the hardware and the processing demands required of it. 

Server Utilization and Virtualization 

Underutilization of servers has been a major issue with data centers. Much like an idling vehicle, running data servers unnecessarily is simply wasteful power consumption. Server virtualization can help with energy management. 

A virtual server is a software simulation of servers and operating systems. Server virtualization is a process that enables multiple virtual servers to run on a single physical “host” server. This offers a powerful way to maximize resource utilization by consolidating workloads and dramatically improving hardware utilization. 

Facility Design and Location 

Where a data center is located can have a profound effect on its energy consumption. Data centers in places with cooler climates can significantly reduce energy-intensive cooling systems by leveraging “free cooling” techniques. For example, air-side economizers can pull in cool external air, while water-side economizers use natural water sources to lower temperatures.  

Data centers in hot regions face higher cooling demands year-round, leading to elevated power usage. Furthermore, if the environment is hot and humid, this can be doubly problematic, as moisture can damage hardware. However, regions with renewable energy sources, such as hydroelectric, solar, and wind power, can provide lower and more stable energy rates. This enables data centers to operate with a lower utility bill and lower carbon footprint.  

Building design also contributes to operational efficiency, for example something such as separating the intake of cold air from the exhaust of hot air. By containing hot and cold airflows, physical barriers prevent mixing, directing cool air toward server intakes and removing hot air. 

How To Improve Data Center Efficiency 

Here are some steps companies can take to make their data centers more energy efficient: 

1. Conduct an Energy Audit 

The first step toward increasing energy efficiency is often an audit. An energy audit can identify which data center operations are the most energy-intensive and where energy waste is occurring.  

2. Optimize PUE 

The larger the share of total energy consumption that comes from IT operations, the better. This increases the PUE and can allow data centers to reduce electricity consumption by cutting down on non-IT processes that eat up power. 

3. Use Energy-Efficient Hardware 

By replacing and upgrading old and inefficient hardware, a data center operator can increase efficiency and lower energy costs. Such upgrades are investments that can take a while to pay off but often end up saving energy and money. 

4. Virtualize Servers and Consolidate Infrastructure 

As mentioned above, virtualizing servers is often essential to more sustainable computing. Consolidating infrastructure reduces redundancies and cuts down on energy waste. 

5. Implement Advanced Cooling Strategies 

Advanced cooling, such as free air-cooling systems, can be a key cooling capacity factor. Effective cooling strategies are hallmarks of data center sustainability.  

6. Monitor and Control Airflow 

There are numerous devices data centers install to improve airflow. For example, blanking panels cover open, unused areas of server racks, so cold air passes through rather than over or under them.  

Structured cabling systems eliminate tangles of cables. This can alleviate headaches among the staff and can open up space for exhaust airflow from rack–mounted equipment. Lastly, air restrictors can improve cooling efficiency by sealing the openings around cables where they enter and exit plenums, such as raised floors.  

7. Upgrade to Speed Fans and Smart HVAC 

Variable speed fans can adjust their rotational speed based on real-time thermal conditions and cooling demands. “Smart HVAC” methods integrate advanced technology, sensors, internet connectivity, and/or AI into traditional HVAC systems. In data centers, smart HVAC can create an intelligent, responsive, and optimal cooling environment. 

8. Utilize Renewable Energy Sources 

Sourcing as much energy as possible from renewable sources helps a data center lower its greenhouse gas emissions and, usually, its energy cost.  

9. Automate Power Management and Scheduling 

Automating what systems use how much electricity and when, can be an easier and more effective way to use energy more efficiently. 

10. Partner With Energy Experts 

Deciphering the best energy sources can be difficult, so working with an energy procurement firm might be the best way to identify renewable options. Such a firm can find the best energy contracts for data center operators and unlock previously hidden paths toward energy efficiency. 

Data Center Efficiency FAQs 

Here are some frequently asked questions about data centers, their use of energy, and how they can become more efficient: 

What Are the Latest Trends in Data Center Energy Efficiency? 

Some trends defining data center energy use in 2025 and beyond include: 

  • Increased energy use: The rise of AI means data centers will consume more energy. It’s impossible to come to any other conclusion. This heightens the importance of becoming more efficient and exploring renewable energy options. 
  • Increased costs for data center space: Big demand usually correlates with rising prices. Data center operators should expect costs for space to continue to rise. 
  • Accelerated data center deployment: The proliferation of AI, especially generative AI, has meant unprecedented demand for data center capacity. Meeting this rising demand requires innovative construction and deployment strategies.  
  • Advanced liquid cooling techniques: It’s fair to expect a significant expansion of the data center liquid cooling sector. 

Why Is Texas so Important to Data Centers? 

As a major energy hub — both fossil fuels and renewables, especially wind — Texas can supply data centers with the power they need. Texas also has policies that many corporations find attractive, so the Lone Star State is proving to be a big player in big data. 

What’s the Role of Energy Consulting in Efficiency Optimization?  

With energy consumption rates as high as they are for data centers, finding the best utility contracts is paramount. Switching suppliers can be a headache, though. Energy consultants can deliver all the information data centers require to make the best energy choices. 

EnerConnex Can Deliver the Energy Services Data Centers Need 

EnerConnex can help find the best energy sources and contracts for data centers. Discover EnerConnex energy services for data centers today. 

About the Author

Brian Dafferner

Managing Director

Brian is a seasoned energy sales leader with 25+ years of experience in procurement, project development, strategic acquisitions, and sustainability. A founding member of The Energy Professionals Association (TEPA), he has supported commercial and industrial clients since California’s deregulation in 1998. Brian has co-founded and sold two successful energy brokerage firms and now focuses on helping businesses integrate Renewable Energy Credits (RECs) into their sustainability strategies. He holds a BBA from the University of Colorado at Boulder.