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What the US’ Energy Act of 2020 means for data centres in the near future

Amidst much of the noise at the end of last year, an important development in the US – the first of its kind in 13 years – has opened the door to a new chapter for operators.

By João Marques Lima

Founder and Editor, The Tech Capital

3 Mins

February 09, 2021 | 12:24 PM GMT

As the world dealt with the Covid-19 pandemic, the US congress passed on December 21, one of the largest relief and spending bill any nation has yet approved at US$2.3 trillion.

However, and as historical as the overall bill is, part of it covers important news for the hosting sector.

The Energy Act of 2020 (the Act), was passed in the same bill and seeks to phase out hydrofluorocarbons, a potent greenhouse gas.

The Act also includes a $35 billion spending budget to advance renewable energy and zero-emission technology.

With data centres on a journey towards carbon neutrality by the end of the decade, the new Act will bring to the table operators from across the country.

Greenberg Traurig LLP’s partners and shareholders Kemal Hawa and Emily Gooding Naughton, and associate Whitney L. Smith, have highlighted that the recently enacted Act covers a broad range of energy efficiency and research and development initiatives, “including a few specifically targeting the data centre industry”.  

The portion of the Act addressing the data centre industry outlines the following initiatives and next steps, they highlighted in The National Law Review:

  • Collaboration between the Department of Energy and the Environmental Protection Agency and key industry stakeholders, including data centre operators and facility managers, to assess “specifications, measurements, best practices, and benchmarks” for increased energy efficiency;
  • Publication of an in-depth report on data centres analysing historical energy and water usage and efficiency, and suggesting best practices;
  • Creation of an information-sharing initiative relating to energy usage at federally owned data centres to encourage further data centre “innovation, optimisation, and consolidation”;
  • Establishment of a program to certify energy practitioners qualified to evaluate the energy usage and efficiency opportunities in federally owned and operated data centres.

“This portion of the Act was advanced, in large part, by Congress’s desire to save costs and achieve greater efficiency for federal government data centres, but it also codifies a broader trend in the industry toward energy efficiency and “green” power,” the three Greenberg Traurig LLP executives said.

For years, hyperscalers and many data centre providers have been working toward more energy efficient and sustainable practices, including commitments to carbon neutrality and the use of renewable energy sources, among other measures. Now, with the federal government moving more swiftly in the same direction, this trend could soon be the norm.

“Data centre operators and customers should continue to monitor implementation of the Act for opportunities to collaborate on best practices and participate in certification and incentive programs that may result from these new energy efficiency initiatives,” Hawa, Naughton and Smith said.

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João Marques Lima

Founder and Editor, The Tech Capital

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