German government considers energy efficiency, renewable energy and disclosure requirements for data centers from 2023 onwards

• Germany

• Environment - Energy and sustainability
• ESG
• Data centers
• Energy and infrastructure

02-11-2022

The German Federal Ministry for the Economy has presented a draft for an “Act to Enhance Energy Efficiency, Improve Climate Protection and Implement EU Legislation” (Energieeffizienzgesetz, EnEfG). If implemented, the Act will seriously affect data center operators and users.

Requirements for efficiency

Data centers which start operations on 1 January 2025 or later must have:

• a planned Power Usage Effectiveness, i.e. the ratio of overall energy consumption to the energy needed for the information technology must be no higher than 1.3, and
• a planned Energy Reuse Factor of at least 30%.

These requirements must be fulfilled at the latest two years after the start of operations and on a lasting basis thereafter. The Energy Reuse Factor will increase to 40% for data centers starting operations on 1 January 2027 or thereafter.

Data centers starting operations on 1 January 2024 or later may not implement air cooling for information technology with an entry temperature lower than 27°C, unless the lower temperature can be achieved without a cooling system. Data centers starting operations before 1 January 2024 may implement a minimum temperature of 24°C, which minimum temperature will rise to 27°C on 1 January 2028.

Operators of data centers will be barred from concluding or extending contracts which would make them disregard these requirements.

“Data center” shall be defined to comprise structures for housing information technology and telecommunication network equipment for storing, processing, and transporting data, and equipment and infrastructure for securing the service with a nominal power connection capacity of 100 kW or more. “Operators of information technology” will be legal entities which operate information technology within a data center of 50 kW or more.

Obligation to use unsubsidized renewable power

Data centers will have to source electric power from renewable energy plants where power does not benefit from support pursuant to the Act on Renewable Energies (Erneuerbare-Energien-Gesetz), the Act on Joint Production of Heat and Power (Kraft-Wärme-Kopplungsgesetz) or other aid in the meaning of the Renewable Energies Directive of 11 December 2018 (“unsubsidized power”),

• starting 1 January 2024, to cover at least 50% of their power consumption,
• starting 1 January 2025, completely.

Use of waste heat

All businesses, including data centers, will be obliged to avoid and reduce waste heat unless technically inevitable, to re-use waste heat in their own premises and to provide it to third parties, and to implement measures and installations so waste heat may be used later, however, no later than the end of 2028.

Upon request, businesses will have to inform heat suppliers, other possible buyers of heat and the Federal Office for Energy Efficiency (Bundesstelle für Energieeffizienz, which will be established at the Bundesamt für Wirtschaft und Ausfuhrkontrolle, Bafa) about the quantities and availability of waste heat from their operations, possibilities to control temperature and feed-in, temperature level and prices.

Data center operators will need to, in addition, provide information on quantities of heat, temperature and prices for waste heat on their websites and to the competent – nearest – municipality and operator of heat supply network. They also will have to state prices for heat supplied temperature and supply levels as requested by possible buyers of heat.

Energy and environmental management systems for data centers

Data center operators will have to implement an energy or environmental management system by 1 January 2025 at the latest. If the data center has a nominal connection capacity of one MW or more, the energy or environmental management system must be certified or validated according to Regulation (EC) 1221/2009. The same will apply mutatis mutandis to operators of information technology with a capacity of 500 kW or more, beginning 1 January 2025.

Lower thresholds, 100 kW, are pertinent for data centers and information technology owned by state entities.

Disclosure obligations for operators of data centers and of information technology

Data center operators and operators of information technology are required to submit specific information on the data center, its use of energy and production of waste heat, some of which will be published, other, more sensitive items of information, will be stored for analysis by public authorities. In addition, to the extent operators of data centers provide services to customers, they will be held to account to the customers of their respective energy consumption (starting 1 March 2023). If they practice co-location, they need to provide incentives and support customers in saving energy and using information technology more efficiently, beginning 1 January 2023.

Outlook

The bill is a draft of the Ministry (Referentenentwurf), still subject to amendments requested by other ministries and voted in the Government as a whole, and also subject to debate and vote in the Council of the States (Bundesrat) and in the Federal Parliament (Bundestag). The bill is inadequately written from a technical point of view.

Industry associations like the German Datacenter Association (GDA) and bitkom, the organization of the IT industry, have protested already, criticizing, among others, that:

• data centers in Germany will be further disadvantaged by high expenditure for energy;
• the efficiency requirements hit at too short notice data centers planned in the past; and
• heat supply networks and infrastructures in Germany are not in shape for taking the waste heat supplied by data centers.

If the draft becomes law, data center operators, users and suppliers will have to modify plans and renegotiate agreements, and also reorganize power purchase agreements and arrangements with users.