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Google and Microsoft, two of the world’s largest companies specializing in cloud computing, are considered to be constantly competing for business in the enterprise market. These two companies share one important sense of urgency.

That means that the environmental impact of the ever-expanding number of data centers around the world needs to change drastically.

Both Google and Microsoft are actively seeking new sustainable energy sources for their European operations, with the ultimate goal of becoming completely “carbon free” in a short period of time.

Carbon-free means “no emissions” of greenhouse gases, and one way to achieve carbon-free in business is to use renewable energy.

New agreements to obtain clean energy from renewable sources have paved the way for a greener cloud computing industry.

Aiming to Achieve “Carbon Free”

Google recently announced a new Power Purchase Agreement (PPA) with French utility Engie to purchase 100MW of renewable energy from an offshore wind farm in Scotland.

By using this new energy to support Mountain View’s work in the UK, we are moving closer to becoming a carbon-free organization, at least in Europe.

Engie’s latest PPA envisions Google achieving 90% carbon-free status by 2025 and using only renewable energy in its UK offices and cloud regions by 2030.

According to Matt Brittin, President of Google EMEA, UK and European consumers are increasingly concerned about energy sources and climate change.

According to him, Google is equally concerned about these issues, and technology will be critical to solving the energy crisis by reducing its own emissions as well as those of other companies.

Google previously signed a contract with Softbank/SB Energy to procure 900 MW of solar power for its data center in Texas.

Microsoft is similarly aware of the environmental impact of its cloud data centers and is committed to improving conditions in Europe and around the world.

It recently announced a new PPA that will provide 900 MW of renewable energy to its Irish data center, bringing the total amount of green energy available in its European capacity to more than 10 GW.

Microsoft has not disclosed details about the new energy supplier in Ireland, but other sources indicate that Statkraft (Norway) and Energia Group are parties to a new agreement (Ireland).

The renewable energy will be generated by a combination of wind and solar farms, and Microsoft intends to make all of its data centers in Ireland carbon-free by 2025.

It has already agreed to a 20-year contract with AES Corporation to operate its data center in California on renewable energy.

The carbon-free initiatives of the two major companies are having an impact on data centers around the world.

Internet Initiative Japan Inc. (IIJ) announced on November 17 that it will build a new system module building within its own data center, Matsue Data Center Park (Matsue DCP), which has been operating in Matsue City, Shimane Prefecture since April 2011. .

Construction is scheduled to begin in February 2024 and operations are scheduled to begin in May 2025.

The newly constructed system module building will have a construction area of approximately 2,000 square meters and a capacity of 300 racks.

In addition to utilizing it as a space for housing equipment for the IIJ cloud service, for which demand is growing, it will also serve as a data center to realize the “development of regional digital infrastructure,” one of the objectives of the Digital Garden City Nation Concept, as a regional network. It will also contribute to strengthening infrastructure.

Background of the establishment of the new “System Module Building”

This project has been selected and implemented as a subsidy target for the Ministry of Internal Affairs and Communications’ fiscal 2021 supplementary budget “Digital infrastructure resilience project through regional distribution of data centers, submarine cables, etc.”

Matsue DCP is a modular data center that employs an external air cooling system, opened by IIJ in April 2011. The container-type IT module “IZmo”, which was developed by integrating IIJ’s DC operation know-how, achieves high server accommodation efficiency at low cost and easy scale-out.

In May 2019, the Shirai Data Center Campus (“Shirai DCC”), a system modular construction method that leverages the energy efficiency technology and operational experience gained at the Matsue DCP, is constructed and operated in Shirai City, Chiba Prefecture.

IIJ explains that the Matsue DCP and Shirai DCC will be used as a base for IIJ’s cloud and network services, as well as for its co-location service, where IIJ stores IT equipment for its customers, and that demand for its cloud services is continuing to increase, and that the use of co-location services for business continuity planning (BCP) is also expanding.

On the other hand, the government’s Digital Rural City Nation concept has promoted the decentralization of data centers to regional areas, and the need for regional DCs is increasing as digital implementation efforts, such as digital transformation (DX) and tourism DX, by small- and medium-sized regional companies are revitalized.

Under these circumstances, the Matsue DCP, which currently has approximately 500 racks, is expected to be fully occupied by the end of FY2025, which is why we have decided to construct a new “system module building” with higher capacity efficiency than container-type modules.

Introducing and demonstrating new facilities, aiming to solve social issues

The System Module Building uses an “outside air-cooled air-conditioning system” that reduces power consumption and “wall-blown air-conditioning” that enables efficient air conditioning.

In addition, they also focus on electrical facilities, maintaining the industry’s highest PUE (Power Usage Effectiveness) level of “1.2”.

By adopting a three-phase, four-wire UPS for electrical equipment to reduce electrical losses, the company will continue to achieve a PUE of “1.2,” the highest in the industry, and fulfill its social responsibility as well as improve its service value.

In addition, Shirai DCC is promoting automation of data center operations by applying robot technology. Leveraging its prior achievements, Matsue DCP will also promote the introduction and demonstration of data center facility patrols using robot technology.

The Matsue DCP is aiming to become a model case of a carbon-neutral data center by introducing electricity derived from virtually renewable energy sources from February 2022.

They are in the process of strengthening our efforts to realize a carbon neutral data center by installing an on-site mega solar power generation facility and procuring power from an off-site power generation facility.

In the future, the data center is expected to utilize the power generation/storage facilities, etc. within the data center to build a micro-grid for local production and local consumption of electricity in cooperation with local governments and regional companies, thereby strengthening regional resilience and solving social issues such as carbon neutrality.

IIJ’s System Module Building is expanding the possibilities of Japan’s data centers, and interest is growing for its operational launch in 2025.

In order to realize data center investment as soon as possible, it is important to know and become familiar with the trends of data centers, which will be in increasing demand in the future.

Demand for network communications is expected to grow significantly in the future due to the spread of telework, cloud computing, and the IT revolution, etc. The latest trend is not only in terms of the ability to process huge amounts of data using HPC, etc., and high power consumption, but also in terms of further expanding perspectives.

This time, we will introduce the data center trends of 2023.
　

・Shift to hyperscale

In recent years, cloud services have been supported by HSDC (Hyperscale Data Centers) instead of conventional DC (Data Centers).

HSDC is a large-scale facility built by a company that requires a huge amount of data communication and storage. You can see many mega cloud companies such as GAFAM.

Megacloud companies demand data centers that are “suitably located”, “large scale” and “uniform quality”.

Until recently, HSDC was a facility created for mega cloud operators to install a large number of servers, but now even smaller SaaS operators such as GAFAM are starting to use it.

As HSDCs increase globally with the proliferation of cloud services, it has been predicted that the increased power consumption by data centers around the world will have a serious impact on the global environment.

However, in 2020, a joint study by Lawrence Berkeley National Laboratory and others reported that while DC processing capacity has increased about sixfold from 2010 to 2018, power consumption has increased only 6 percent overall.

The widespread use of HSDCs, which can process a large amount of data with little power consumption, has reduced the increase in overall DC power consumption.

As a result, HSDCs have high energy-saving performance and contribute to reducing the burden on the environment.
It can be said that HSDCs will become indispensable facilities in the future, when sustainability will be required.
　

・Renewable Energy

　
The decarbonization of DC can be divided into two main areas.
The first is to improve the efficiency of power use in facilities, including air conditioning and power supplies, and the second is to shift to renewable energy.

In recent years, global warming caused by CO2 emissions has become an issue, and the shift to renewable energy power is accelerating.

Although the spread of HSDCs has made it possible to somewhat curb the increase in power consumption, the power consumption itself will continue to increase.

It can be said that being a sustainable data center is a prerequisite for survival. In fact, major global DC operators have set a goal of 100% renewable energy deployment.

In Japan, Ishikari City’s zero-emission DC project is underway, taking advantage of its cold climate and proximity to a renewable energy location.

There is no doubt that operating on renewable energy will be the trend for data centers in the future.

・ Edge computer market

Edge computing refers to distributed computing in which data processing and analysis is performed on devices such as IoT terminals and servers installed nearby.

Since data is processed and analyzed at the edge without being sent to the cloud, it has the advantage of high real-time performance and low communication delays due to the distributed load.

In recent years, the evolution of the IoT and AI has driven the need for instantaneous processing of large volumes of data.

The conventional cloud inevitably increases processing lead time when handling large volumes of data, and Edge DC is the answer to this problem.

In the future, it is expected that edge computing will be further developed to avoid processing delays that can become bottlenecks in the cloud due to increased data volume.

Google, Microsoft, and others are also in the process of launching cloud edge solutions and exploring new needs.

HSDCs as well as edge computers are potential investment targets.
Please take a look at the future trends in data centers mentioned above to help you forecast future investments.

As the Earth is threatened by climate change, the entire world is accelerating its movement toward carbon neutrality.

Recently, many executives may have become interested in achieving ESG (Environmental, Social, and Governance) goals.

For those who are interested in ESG, we would like to introduce sustainable innovations and initiatives by companies that handle data centers, which require a lot of energy for power, air conditioning, and other operations.

・Microsoft

The company announced the opening of its newest sustainable data center in Sweden.

The data center region is committed to reducing its carbon footprint, achieving zero waste certification, and operating on 100% carbon-free energy.

The fuel used in this data center is the world’s first Nordic Ecolabeled fuel, which contains more than 50% renewable raw materials and reduces carbon dioxide emissions nearly as much as standard fossil fuels.

This saves energy, water, and other resources, and reduces waste generation, making the facility a true embodiment of ESG goals.

A rainwater harvesting method has also been developed to provide water for humidification in data centers.

This method involves collecting rainwater at the data center and using it for equipment within the data center.

Other data center servers are cooled year-round with 100% outside air, contributing to ESG goals.

Swedish data centers are among the most sustainably designed and operated in the world, said Elaine Barnekow, general manager of Microsoft Sweden.

They have also launched a data center region in Arizona, USA, called “West US 3”.

As part of the theme of going carbon negative by 2030, this region has entered into a green energy power purchase agreement for the electricity used in all of its data centers.

To make this policy a reality, Microsoft has built the 150-megawatt Sun Streams 2 solar photovoltaic (PV) power plant.

Keep an eye on the future developments of Microsoft.

・NTT

NTT Smart Connect plans to introduce a variety of energy-saving equipment at its Sonezaki Data Center (tentative name), which will be opened in April 2022 in the Dojima proximity area.

As for the breakdown of power consumption in a typical data center, it has been found that cooling equipment-related accounts for about 45%. They are trying to maximize the cooling capacity with an all-in-one package that includes a control panel and automatic control equipment.

In addition, it is a unique design that does not require a blowout chamber for construction, and by reversing the fan and cold water coils, it is possible to equalize the pressure in the fan room.

Therefore, it rectifies the airflow passing through the coil, making it possible to equalize the wind direction and wind speed distribution of the blown airflow.

They have also introduced our own high-efficiency EC fan that reduces power consumption by about 50%, and we can see a positive attitude toward energy conservation.

・Kyocera Communication System

The company aims to open a data center that uses renewable energy directly in Ishikari City, Hokkaido.

Plans are underway to send electricity directly from solar and wind power plants to the data center, and to use snow accumulated in the winter to cool the data center in the summer.

・Sony Group

The Sony Group has developed an image sensor equipped with AI that can reduce power consumption in data centers.

The captured images are processed by AI, narrowed down to the necessary information, and sent to the data center. This is an epoch-making mechanism that reduces the network load and power consumption compared to sending image data as it is shot.

In addition to the above, sustainable data center initiatives are progressing rapidly around the world.
Keep an eye on future data center trends.

CBRE (Japan headquarters: Marunouchi, Chiyoda-ku, Tokyo) has launched a dedicated data center page (search site) on PROPERTY SEARCH, one of the largest commercial real estate portal sites in Japan operated by CBRE, as part of its “Leasing Services for Data Center Use (search site) on PROPERTY SEARCH, the largest commercial real estate portal site operated by CBRE in Japan.

Background of the search site launch

Since the COVID 19 pandemic, demand for data centers has been increasing year by year, including server room relocations due to office space reduction, establishment of BCP bases in light of disaster and geopolitical risks, and rapid growth in demand for cloud computing due to the promotion of DX.

In Japan, data traffic is expected to double in the two years to 2021 due to the expansion of digital services, and demand for data centers is expected to further increase due to the further expansion of cloud service use. On the other hand, under the government’s policy for the development of digital social infrastructure, the decentralization of data centers, which are concentrated in large cities, is being considered, as well as the obligation to make all new data centers 30% more energy-efficient by 2030 and to partially convert electricity used in data centers to renewable energy under the “Green Growth Strategy for Carbon Neutrality by 2050”. The data center industry is now entering a new phase, as the government is considering mandating that all new data centers be 30% energy-efficient by 2030 and that some data centers use renewable energy.

In order to respond to these changes in the business environment, CBRE, in cooperation with data center operators, has collected information on data center properties with the aim of providing general business companies and other data center users with a wider choice of data centers to use, and has created Japan’s first data center We have built Japan’s first data center property search site.

Search site main service contents

We provide comprehensive and integrated support for the execution of solutions to our clients’ issues, from the formulation of real estate strategies related to data centers to development, transactions, and operations.
Their main services are as follows.

– Advisory services for “real estate strategy development” for data center business
– Brokerage for purchase, sale, and lease of land for data centers
– Appraisal” of existing data centers and “consulting” reports for new data centers
– Development project management for data center construction
– Property and facility management for data center operations

The data center industry is entering a phase of further expansion. With Corona, video distribution and online shopping have grown, and the importance of data centers as social infrastructure has further increased, making data centers a target asset for real estate investment.

Globally, telecommunications carriers and IT service companies have been aggressively investing.

The data center market in Japan is expected to grow further in the future, and foreign data center operators are entering the market one after another.

In addition to the rapid pace of data center development in Japan, which is driven by the increasing amount of investment each year, we must also respond to social issues such as the government’s initiative to promote regional decentralization and carbon neutrality, and we must strategically address data center development in a holistic manner. In addition, the government is taking the lead in the development of data centers.

CBRE’s knowledge and experience in advisory, consulting, and management of facilities such as logistics, warehouses, factories, infrastructure, and data centers, combined with CBRE’s domestic and international network and solid platform, will provide a new value-added service. Expectations are high for this new value-added service.

In the past, we introduced the following three conditions for determining the location of a data center that can operate stably in Japan.
(1) elimination of communication delays and redundancy
(2) High power consumption and redundancy
(3) Measures against natural disasters
These three factors were introduced in this report.

In this issue, we will focus on what kind of locations are selected as data center sites around the world.

Data Center Location Ranking.
U.S. Overwhelmingly Popular – Northern Virginia Tops the List

Northern Virginia has once again been named the “World’s Most Attractive Data Center Locations” by real estate specialist Cushman & Wakefield in its annual ranking of the world’s most attractive data center locations.

Global Data Center Market Comparison Report Ranks U.S. Top 8 Cities.
The report ranks Internet centers according to criteria such as fiber connectivity, tax incentives, and land and power prices.
The top 10 are skewed toward the U.S., with Cushman predicting that Northern Virginia, with its current capacity of 1.7 GW, will likely reach 2 GW or more in the next two years.

It is no surprise that Northern Virginia has once again topped the overall rankings for the third year in a row.
Virginia is the largest data center market in the world and has a strong construction pipeline.
It offers excellent connectivity, attractive incentives, and low-cost power.
Vacancy rates are very low, demand is high, and operators and tenants alike are interested in expanding.
As such, the region has the potential to become the world’s first 2 gigawatt market within the next two years.

Silicon Valley and Singapore are also well known for their lack of land and power, and in the case of Singapore, they actually rank high despite the government putting the brakes on approvals to build data centers.

While high power availability is cited as an important location factor in Japan, land and power are the three lowest priorities among the 13 factors Cushman considered in its ranking.
This indicates that builders are always expected to find ways to squeeze capacity in locations that score high on the top priority of being close to the hub’s existing capacity.

Cushman’s top three factors are fiber connectivity, market size, and cloud availability.

The elements that come next are essentially optional and include sustainability, political sustainability, taxes, and incentives.
Environmental risk from natural disasters, which is considered important in Japan, is the lowest weighted factor.

Hong Kong’s very low use of renewable energy, which means that data center operators emit large amounts of greenhouse gases, moved it from outside the top 10 to sixth place in this factor.
On the other hand, Seattle and new entrant Portland tied for 10th place, both being recognized for their consideration of environmental issues, “Both are sustainability-focused cities in the Pacific Northwest of the United States.

U.S. Advantages

The data center U.S. dominance may be due to the fact that U.S. social media and cloud hyperscalers dominate the Internet.
However, this could also reflect the fact that China does not participate in the international real estate market in the same way as other countries.
Beijing and Shanghai are included on this list, but Shanghai does not top the list, despite being the fourth largest data center hub in the world at 600 MW.
The top 10 includes eight U.S. hubs, with Atlanta, Portland, and Phoenix new to the list, making up for the fall of New York (No. 9 last year). London (previously No. 7) and Amsterdam (No. 10 last year) fell out of the top 10, despite being 800 MW and 400 MW, respectively.
Outside of the U.S., Singapore, Hong Kong, and Sydney are the other three cities ranked in the top 10.
Note that 11 cities are included in the top 10 due to a tie for 10th place.

It remains to be seen how this global data center situation will affect Japan.