How Energy Procurement Drives Data CentreĀ Sustainability
As the world's focus turns to sustainability and economic growth in Davos, Schneider Electric’s leadership exemplifies how partnerships, innovation and forward-thinking energy strategies can tackle both environmental and business challenges.
Speaking ahead of the World Economic Forum (WEF) Annual Meeting 2025 in Davos, CEO Olivier Blum explains: “By forging strategic partnerships, companies can leverage innovation and technology at hand to increase their performance while delivering meaningful impacts and a better future for all.”
The message resonates strongly with the procurement strategies Schneider Electric champions, particularly within the energy-intensive data centre sector.
As AI and data infrastructure expand rapidly, the company's latest reports and initiatives illustrate how procurement plays a crucial role in balancing sustainability with growth.
Schneider Electric’s insights on data centres and energy
At Davos, Schneider Electric presents two critical reports: The Looming Power Crunch: Solutions for Data Centre Expansion in an Energy-Constrained World and Artificial Intelligence for Energy Transition. These reports focus on solutions to manage escalating energy demands while advancing the decarbonisation of digital infrastructure.
The challenge of energy supply for data centres is especially pronounced.
As Pankaj Sharma, Executive Vice President of Data Centres & Networks at Schneider Electric, explains: “Sustainability is the data centre industry’s most defining challenge and greatest opportunity to date.
“AI-driven growth doesn’t have to derail our data centre sustainability goals. It’s paramount we bend the energy curve downward by finding new ways to decarbonise data centres and the digital infrastructure.”
The procurement of sustainable energy solutions is pivotal in these efforts. Schneider Electric highlights tools such as liquid cooling systems, AI-powered energy management and efficient infrastructure to support data centres in maintaining environmental responsibility alongside operational performance.
Steven Carlini, Vice President and Chief Advocate of AI and Data Centres at Schneider Electric, emphasises collaboration with utilities to meet future energy requirements: “By embracing alternative energy sources, forging partnerships with utilities and rethinking energy procurement, the data centre industry can thrive sustainably and get ahead of growing global power demands."
Steven Carlini, Vice President of Innovation and Data Centres at Schneider Electric shares his insights and thoughts about The Looming Power Crunch: Solutions for Data Center Expansion in an Energy-Constrained World.
How can utility companies support data centre growth?
Collaborating early with utility providers can streamline permitting processes, promote grid modernisation and facilitate the integration of renewable energy sources. This partnership is key to ensuring long-term sustainable growth and addressing public and governmental concerns.
For example weāre working with a large European utility to supply low-carbon power to major hyperscalers looking to build new data centres to meet AI demand.
What is your main take away from the report?
The looming power crunch we are facing in the data centre industry isnāt a roadblock ā itās a call to innovate.
By embracing alternative energy sources, forging partnerships with utilities and rethinking energy procurement, the data centre industry can thrive sustainably and get ahead of growing global power demands.
What guidance would you give utility companies looking to stabilise grids whilst managing increasing energy demand from data centres?
Electrical utility companies went through years of flat or shrinking demand and are now seen as a growth industry because of data centre, HVAC and vehicle electrification growth.
The last great technology wave, the Internet, also drove electric utility growth and massive capital investments. However, the demand was over-speculated, and the utilities were left with lots of unused capacity for years.
My advice this time would be for utilities to begin to treat data centres as part of the utility power ecosystem.
As data centres have significant back-up power today and will begin to have self-generated prime power on-site in the future.
The first step would be to be vigilant and agree on the exact power requirements needed in the future.
The next step would be to work together during times of peak demand having the data centre utilise long term back-up for days or weeks as needed.
Next, information sharing between data centres and utilities (eventually automated connected systems) can help optimise power supplies.
How are data centre companies adjusting their energy procurement strategies for a cleaner future?
The growth of data centres is far outpacing utility growth (2%), so sourcing the grids electric power becomes more challenging especially at a time when many fossil fuels, nuclear plants and renewables are evolving.
With the grid under this unprecedented pressure globally, many data centre developers are scrambling for solutions.
Schneider Electric is at the forefront of this energy evolution with this first and fundamental component of our end-to-end AI solution.
Schneider Electric supports companies in securing renewable energy and optimising on-site power generation with diverse sources like wind, solar and hydrogen.
We provide services such as site selection and geographical analysis based on customersā deployment plans and enable on-site power generation through AlphaStruxure, which ensures speed to market, reliability, resilience and sustainability of chosen power sources.
As an example, Schneider Electric worked to deliver an energy procurement contract and power purchase agreements for Equinix. This resulted in US$24m in energy savings with strategic energy buying, a million tonnes of equivalent carbon dioxide reduced and a 24% reduction in emissions despite a 43% increase in energy usage each year.
How do you think power competition and energy scarcity may impact these procurement strategies?
There is certainly much more competition to secure utility power for future data centres.
A good approach is to come up with an organised and well thought out plan that focuses on building the data centre to operate in a very efficient way that builds credibility for the timeline and electricity use. This gives the data centre operator an edge over many of the other competitors.
If electric utility power is not going to be available, in the short term I see many data centre operators looking at natural gas as an option and putting natural gas power turbines onsite.
While natural gas power grids across the globe are certainly not as ubiquitous as the electric grid and natural gas providers today do not have to meet the same reliability standards as the electric grid, it seems like a logical choice for āfeed #2 or #3ā for major data centre operators (although not very green).
Plus, there are companies like AlphaStruxure that will even provide these in an āenergy as a serviceā model.
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