Renewable energy is key to building the most sustainable data centres
September 05, 2025
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As the pressure to decarbonise continues to grow, now is a good time for data centre developers to consider renewable energy
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For data centre developers, sustainability is an important topic. There is more pressure to decarbonise data centre operations this year. Key drivers include:
- The Carbon Neutral Data Centre Pact: Under the pact, data centre electricity demand must be matched by 75 percent renewable energy or hourly carbon-free energy by the end of 2025. This rises to 100 percent renewables by the end of 2030. As of June 2025, the pact supports compliance with existing regulations instead of relying on self-regulation.
- Tenants’ ambitious green goals: Today’s tenants are looking for the most sustainable data centres and low-carbon energy.
- Grid capacity constraints: Data centre developers are being told they need to wait for 10 or more years for a grid connection. As a result, they are looking for ways to reduce their reliance on the electrical grid while meeting sustainability goals.
- The drive for renewables: Renewable energy markets are evolving all the time. It’s important to keep up to date with how the UK power outlook is changing.
Meanwhile, data centres have a huge opportunity to contribute to their local community’s green ambitions. An important step: Developing or supporting local renewable energy. This is also at the forefront of planning inspectors’ minds.
A 2025 report by Goldman Sachs suggests that by 2030, AI workloads could increase data centre energy demand by 165 percent. This growth is driven by the computational complexity of AI tasks and the growing volume of data being processed. The report also suggests that renewables and energy storage could meet around 80 percent of the power needs of AI data centres.
Importantly, the report predicts that 40 percent of new capacity to support data centre power demand will come from renewables. Other technologies, like natural gas and battery storage, also play a role.
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Goldman Sachs predicts that 40 percent of new capacity to support data centre power demand will come from renewables by 2030.
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Three options for harnessing renewable energy for the most sustainable data centres
Data centre developers have three main options when it comes to using renewable energy to supplement the power they draw from the grid. They are:
- On-site generation: Due to space constraints, this can often be a challenge.
- Near-site generation: There are two options here. One is self-developed generation, which could play a much larger role than it does today. Secondly, the data centre could buy energy or a private wire from a nearby wind or solar farm developer, for example.
- Remote generation: This is where the data centre buys energy from a renewable energy generation project. This is done through an intermediary energy services company.
Which option works best and will lead to the most sustainable data centres will depend on the circumstances of each development. The location of the data centre is key. Developers who start to think about this early on—and those who use tools like capacity and constraints mapping to identify sites with good potential—are the most likely to find a strong business case for using renewable energy.
The potential of near-site generation
For high-volume energy users such as data centres, the economics of near-site generation are currently much stronger than remote generation. They can avoid non-commodity costs by connecting to a generator using a private wire (i.e., a physical cable). This results in a lower import price for the energy user. It also means a higher export price for the renewable asset, which is a win-win.
We’ve also seen a growing number of developers, especially in logistics and distribution, see the value of installing renewable energy generation near their sites. With the energy generated, they can sell the power to nearby users, which helps secure a steady income for several years. This could very well extend to capitalising on the race to build the most sustainable data centres in the world.
Data centres are perfect for this kind of setup. So, they stand to benefit from this trend, either through a standard contract or a joint venture. By partnering with renewable energy developers, data centre developers can share the risks and maximise the benefits for both sides.
This trend is likely to be further boosted by the government’s criteria for AI Growth Zones, which were announced as part of its AI Opportunities Action Plan in January. These zones are positioned to benefit from enhanced access to power and support with planning. They should accelerate the buildout of AI infrastructure in the UK. The criteria include ‘locations near land suitable for hosting low carbon power generation and storage’.
Self-generation could also play a much larger role than it does right now. While companies have started to look into this, there are only a few examples of implementation. But consider the context. Ongoing grid constraints, the potential to cut energy costs, and growing demand for decarbonisation could encourage more exploration in the coming years.
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A growing number of developers are recognising the value of installing renewable energy generation near their sites.
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Harnessing wind power
The UK government’s decision to lift the effective ban on onshore wind farms has also had a profound impact on the business case for using renewable energy. Wind power as an option is back on the table when we are looking at projects at an early stage.
Wind is attractive as it generates energy consistently throughout the year. This makes it ideal for the most sustainable data centres. While it requires a grid connection, the goal is to use all of the power in the data centre. This makes it far less demanding on the grid and easier to get off the ground.
Any developer looking at onshore wind needs to understand what’s required for approval. For instance, there are a range of feasibility and viability studies needed to show that a scheme is suitably located. This includes noise and ecology studies, shadow flicker assessments for the turning blades, and swept path analysis for the delivery of the turbines to the site.
" }For high-volume energy users such as data centres, the economics of near-site generation are currently much stronger than remote generation.
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Looking ahead
Data centres and data centre power use are stepping into the public spotlight. The government’s drive to become a global leader in AI has made these facilities front-page news. Inevitably, people are interested in where and how they’ll be built and the impact they’ll have on them and the planet.
Renewable energy generation—alongside the innovative use of waste heat—is a way to contribute to local sustainability goals and build the most sustainable data centres. It can show local communities the large role that data centres can play as part of an integrated development plan. It can also add to the local economy, jobs, and local projects. We talk more about it on our podcast episode on data centres and net zero communities.
In summary, near-site generation has the potential to play a much bigger role than it does right now. The right power strategy for a data centre will depend on a number of factors, including its location. Capacity and constraints mapping can help developers to identify sites with favourable power opportunities as the industry continues to grow and evolve.
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