Decarbonising Data Centers: A Giga Scale Pathway

As global temperatures are projected to rise by 1.5 degrees Celsius by the 2030s and AI poses challenges to net-zero commitments, it is essential to share insights from visionary leaders and innovators shaping a sustainable future for the digital and energy infrastructure.

I conducted a video interview in Antibes with Douglas Mouton and Byron Best of Fidelis New Energy, LLC , the Houston-based energy transition company focused on decarbonisation that is employing proprietary technology for carbon removal in the data center sector.?

Mouton, a Board Adviser at Fidelis New Energy, served as a keynote speaker at Platform Global, while Best, the CTO and Chief Engineer, discussed energy transition and infrastructure investment.?

Carbon Neutral Power Sources

As the data center industry approaches its limits in land and power to support the expansion of AI services, Fidelis views carbon capture and sequestration integrated into power generation as an immediate solution and is currently providing clients with carbon-neutral dispatchable power sources.?

Managing Carbon Emission Scopes 1, 2, and 3? in Data Centers

With scope 3 emissions accounting for 70-90% of total hyperscaler greenhouse gas emissions, we examine with Best the three emission categories in relation to data centers.?

- Scope 1 emissions refer to CO2 released during business operations. For hyperscalers, this is a minor part of their carbon footprint, resulting primarily from diesel backup power, which Best thinks can be mitigated through carbon capture or by using biofuel.?

- Scope 2 emissions relate to energy use on-site, including carbon emissions embedded in electricity from the grid or in energy utilised for cooling. Currently, major tech companies are on a pathway to achieving net-zero scope 2 emissions through strategies to incorporate renewable generation in their power supply model. Of the five largest hyperscalers, three are nearing zero scope 2 emissions per their published emissions data. They achieve this by purchasing Renewable Energy Certificates (RECs) to offset the carbon intensity of their consumed power or utilizing Power Purchase Agreements (PPAs) to lower it. With scope 2, there is typically only one power supply point, making it relatively straightforward to decarbonise through contracts.

- Scope 3 emissions, however, encompass embodied carbon from goods and services consumed during business operations including building materials, equipment, and travel. In data centers, mechanical and electrical equipment typically accounts for half of the emissions, particularly from servers, with the building itself contributing the other half. Each material used in construction and IT equipment from various suppliers carries its own carbon footprint, making the complete elimination of scope 3 emissions impractical.

The Multi-Billion Dollar Carbon Credit Market?

Carbon credits serve as a sustainability tool that allows businesses to offset greenhouse gas emissions while promoting green initiatives such as renewable energy and forest conservation. Each credit represents one ton of CO2 or equivalent gases removed or reduced from the atmosphere.

The One Trillion Dollar Low Carbon Goods Market?

The iMasons environmental product disclosure initiative led to hyperscalers, major co-location providers, and suppliers like 施耐德电气 —valued at $158 billion—committing to disclose the carbon impact of the equipment they sell.?

Mouton sums it up:

If we can measure it, we can manage it. We agreed to measure and disclose our supply chain, requiring suppliers to inform us about the carbon in the products we purchase. This carbon disclosure presents an opportunity for providers to differentiate their products in the $1 trillion low-carbon goods and services market.

Regulations and the Voluntary Carbon Market (VCM)?

A notable development in the carbon capture and sequestration sector is the increasing push from hyperscalers to decarbonise, providing the necessary economic incentive for sustained operations. This trend is intensifying with the rise of AI.

Mouton believes that the hyperscale data center industry is uniquely positioned to lead decarbonisation efforts across other sectors.

Europe is leading the way in environmentally progressive regulations, and the SEC in the U.S. is expected to mandate emissions disclosures.?

Best believes that the voluntary market and hyperscalers remaining true to their commitments are crucial factors right now.

Microsoft and Google are setting an example by paying a premium for lower-carbon services, which will significantly influence the market.

Google achieved 100% offsetting of scope 2 emissions by 2017, while Microsoft aims to become carbon negative by 2030 and offset its historical emissions by 2050.?

Movements That Drove Down Consumption

Mouton flags the impact of two initiatives in recent history to curb carbon emissions.

- Greenpeace Grading: Greenpeace assigned grades to hyperscalers, including Apple, based on their power quality marked a pivotal moment in the industry whereby renewable power gained significant importance among executives.?

- PUE: The introduction of Power Usage Effectiveness (PUE) by Christian Belady , a Microsoft data center veteran now senior advisor at DigitalBridge, became the benchmark for measuring data center efficiency based on power usage for cooling versus IT operations.?

Impact of AI?on Sustainability Commitments

AI, a significant theme of this decade, is potentially disrupting previous sustainability plans. Large tech corporations had set ambitious sustainability targets three years ago, aiming not only for net-zero emissions but also to compensate for past emissions by 2030. AI adds further pressure on these pledges.

Best endorses keeping the 2030 deadline and Mouton recommends a substantial change in strategy to meet this goal:

We should focus on carbon content per unit delivered across emission scopes, allowing to move toward zero while measuring progress along the way.?

Assessment of Liquid Cooling Technology?

Before the advent of liquid cooling, hyperscale data centers relied on adiabatic cooling methods that manipulated humidity and airflow. Given current AI demands, Mouton believes we must transition to liquid-cooled systems, optimising building designs and cooling efficiency at the chip level.?

I’m concerned about the carbon intensity of the mechanical equipment required to generate cooled water and cycle it through. Utilising seawater or other thermal sources could help reduce energy consumption.

Designing AI Data Centers With Environmental Considerations

Large language models require vast networks of servers connected by fiber optics, resembling a brain structure. AI Large Language models with 1 million GPUs are driving data centers footprint building up to 500,000 square feet or approx 46,000 square meters. Clearing land for such facilities destroys plant life that absorbs CO2 and produces oxygen. Additionally, the construction process emits diesel fumes.

The size of these large facilities is due to the technological constraint of maintaining close fibre optic connectivity between servers for minimising latency. Mouton believes that advancements in technology will allow for more decentralised training capabilities, resulting in more efficient use of space.?

The Trigeneration Concept?

The trigeneration concept explores using gas turbines to provide both power and cooling for data centers which has the potential to improve energy efficiency of large scale AI implementations.

Best spoke about harnessing waste heat from exhaust to generate steam and providing cooling for the data center as an exciting opportunity for optimisation within the industry.

Carbon-Neutral Powered Lands?

With speed to market as a primary strategy and power availability presenting a significant challenge, Best spoke to us about Fidelis’ Monarch Cloud Campus, the 22,000-acre future zero-carbon data center complex in West Virginia equipped with natural gas to generate 2 gigawatts of power for hyperscale operations with the option to decarbonise using zero carbon hydrogen produced by FidelisH2 technology.

We're initiating the process with natural gas behind the meter allowing us to scale rapidly to 400-500 megawatts within approximately 24 to 30 months.

Carbon Dioxide Removal Credits (CDRs)

Fidelis is marketing CDR certificates to hyperscalers aiming to decarbonise, particularly targeting the offset of challenging-to-abate scope 3 emissions. AtmosClear biomass energy plant with carbon capture and sequestration facility under development by Fidelis in Baton Rouge Louisiana will remove approximately 620,000 metric tons of CO2 from the atmosphere annually.

Carbon Removal Market: Engineered vs. Natural Carbon Offsets

Current market offerings include carbon offsets, which are relatively affordable and frequently focus on preventing deforestation.

Best assesses the two main approaches of the carbon removal market:

1. Direct Air Capture (DAC) - This method utilizes large fans to draw in air, capture and concentrate CO2 and directing the CO2 to sequestration. However, achieving the scale needed to assist hyperscalers in meeting their decarbonisation targets using this approach will extend beyond 2030.

2. Biomass Gasification to Hydrogen and Biomass Power with Carbon Capture and Storage (BECCS).

BECCS offers a more immediately scalable solution at the necessary economic price point.

2025 Decarbonisation Trends

Best and Mouton anticipate the following trends:

-????????????? The emergence of trigeneration systems that could integrate into district cooling.

-????????????? Hyperscalers pushing innovative approaches to address scope 3 emissions and fostering collaboration among equipment suppliers to effectively reduce carbon footprints.

-????????????? Dispatchable, behind-the-meter low-carbon power generation that supports hyperscaler objectives, with the growing influence of AI, in a sustainable manner.

-????????????? The CDR market will continue to play a crucial role in offsetting scope 3 emissions.

Thank you Doug and Byron for this insightful discussion and Platform Markets Group for the opportunity to engage with visionary experts driving innovative solutions to the global emissions problem.

Click here to watch the full interview on YouTube.

#carboncapture #CO2emissions #decarbonisation #scope3 #datacenter #PPAs #RECs #BECCS

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