Has the German Energy Efficiency Act become a thorn in the side of German data centre operators?

Much of the discussion during September 2024’s German Data Centre Association’s annual conference focused on the impact of the German Energy Efficiency Act – the EnEfG Act. It came into force on 1 January 2024, and introduced energy efficiency obligations that specifically apply to the future design and operation of data centres and other bodies or sectors. That topic, along with densification for AI, machine learning, and the advancement of liquid cooling in the sector, dominated the two days of discussion.

Six months later, what have we learned? What are the implications for data centre designers and operators in Germany, in complying with this new legislation?

What the Act says

The German Energy Efficiency Act of 2023 specifically focuses on a handful of key areas for data centre operators. These are:

• Energy efficiency.
• Waste heat utilisation and reduction.
• Power supplies from renewable energy sources.
• Energy and environmental management systems.
• Information obligations and energy efficiency registers.
  

The most impactful change is the stricter requirements for power usage effectiveness (PUE). This describes the ratio of the annual energy demand of the entire data centre to the energy demand of the IT equipment racks. The act requires data centres that commence operations before 1 July 2027, to be constructed and operated to achieve a sustained annual average of less than or equal to 1.5 as of 1 July 2027, and less than or equal to 1.3 as of 1 July 2030. For those that commence operations on or after July 2026, an annualised PUE of less than or equal to 1.2 is required. This should be of the utmost concern to designers and operators.

Additionally, data centres must minimise the amount of residual heat they produce. Operators of data centres with an annual energy consumption of more than 2.5GWh within the last three completed calendar years must avoid residual heat production and reduce it to the minimum technically and reasonably feasible (zumutbar). Any residual heat generated must be reused by the data centre as much as possible. In this context, economic and operational concerns may be considered within the framework of reasonableness.

Additionally, an energy reuse factor (ERF) has been imposed specifically on data centres:

• Data centres that start operating on or after 1 July 2026, must be constructed and operated to achieve an ERF of at least 10%.
• Data centres that start operating on or after 1 July 2027, must achieve a projected ERF of 15%.

• Data centres that start operating after 1 July 2027, must achieve a projected ERF of 20%.

The requirements do not come into effect annually until two years after the commencement of operations. There are some exceptions with regards to compliance where the operational energy is not aligned with the planned energy, such as where there is an agreement with the local municipality that they, or an Energy Supply Company (ESCo), has agreed to build a heat network within ten years of the data centre becoming operational. Exceptions may also be made where the operator of a heat network located near the facility does not accept an offer to use waste energy at a prime cost within six months, although the operators of the data centre must still provide the necessary infrastructure for the provision of waste heat. This would typically be in the form of a heat transfer station.

With the reasonable (zumutbar) qualification to this requirement provided in law, it does seem that municipalities are willing and able to support data centre development with operators providing the heat transfer station as a minimum contribution.

What’s changing in 2024?

So, what has changed since the EnEfG Act became law in 2024? In terms of data centre densification and cooling – well, almost everything!

Firstly, there is an industry-wide move towards data hall densification. Most enterprise and hyperscale customers now require higher data hall IT capacities with average rack loads of around 25kW per rack. Peak capacities for individual racks of up to 75kW are no longer uncommon. Over the past twelve months, many hyperscale customers have standardised on 10MW data halls with 20x24 rack configurations in compliance with industry statements of qualifications (SoQs).

Whilst such arrangements would allow for single-sided fan coil wall air cooling, the increase in densification exceeds what air cooling alone can support. This is driving an industry-wide pivot towards liquid cooling.

Currently the data centre industry is hovering around 45% air-cooled and up to 95% liquid-cooled provisioning within the technical space. The preferred liquid-cooled solution is direct-to-chip cold plates, served by a technology cooling water system (TCS).

With these customer requirements and higher capacity racks, the industry is at a moment of transition. Facility-chilled water systems (FWS) that formally served as Fan Coil Wall units, or Computer Room Air Handlers (CRAHs), are now also supplying primary cooling to the coolant distribution units (CDUs) that support the cold plate TCS loops. However, increasing processor power necessitates lower TCS operating temperatures with supply temperatures of 26⁰C now becoming the norm. This can only be achieved by corresponding reductions in facility water system temperatures. When the approach across the CDU is considered (typically 3-4K) the resultant drop in facility water temperature significantly impacts chiller energy efficiency ration and the opportunity to exploit free cooling.

All these changes are having an incremental impact on annualised Power Usage Effectiveness (PUE), which is now at odds with the directive contained in the EnEFG Act. Will an annualised PUE of 1.2 (in compliance with the EnEFG Act) be possible? Probably not, in the immediate term, or perhaps only where there is an abundance of water to allow the use of evaporative cooling towers, which will adversely affect water usage effectiveness (WUE).

With regards to the energy reuse factor (ERF), whilst data centres generate a great deal of heat, there are limited uses for such heat within the facilities. Notable exceptions include heating of ancillary and administration buildings and applications such as supplementary heating of generator crankcase heaters. However, these are tiny compared to the amount of residual heat that is potentially available. Accordingly, data centres must be looking for an ESCo or municipality to provide the heat network infrastructure needed to take the residual heat away from the site. However, these bodies will only be willing to do this where end-users require heat and a viable business case for making the necessary capital expenditure.

As cooling strategies evolve to meet new data centres’ needs, the opportunity for more efficient water-side heat recovery reduces, as any reduction in facility chilled water operating temperatures will have a detrimental impact on the EER of the heat pumps that will be used to recover the residual heat. However, more importantly, the EnEFG Act of 2023 now seems to be imposing a significant obstacle in the path of new AI and HPC data centre development in Germany, as these facilities may struggle to achieve the PUE targets set by the act and may not be able to satisfy the ERF requirements unless they happen to be located in an area where both an ESCo or municipality is willing to provide the necessary heat network infrastructure, and customers are willing to take the heat these networks will supply.

We will have to wait and see if the EnEFG Act of 2023, which was transformational in its legislation on 1 January 2024, is achievable for operators of new facilities post-January 2026, or if it will become a thorn in the side of both legislators and German data centre operators in the future.