Crosspoint Real Estate study: by 2025, data centre energy consumption will contribute 3.2% of total carbon emissions

Romania Data Centers, Crosspoint Real Estate’s most recent market analysis, assesses Romania’s strengths and weaknesses in regards to the country’s potential of becoming an important destination for data centres operators.

Just as the 20th century marked a new era in human civilization through the industrial revolution, the 21st century is undeniably all about technology reshaping both our society and our everyday experiences. 23 years ago, at the time of the dotcom bubble burst, only 7% of the global population had internet access. Today, more than 5 billion people are connected to the internet, with an estimated 100 zettabytes of data generated currently per year.

Consequently, this exponential expansion has given rise to a corresponding growth in the data center industry, a market valued at over 175 B USD, with more than 8,000 operational data centres worldwide. This type of alternative asset is attracting an increasing number of investors: recently, Blackstone, one of the world’s largest owners of real estate, has started to sell a large part of its assets in order to raise liquidity for data center investments, allocating $8 B to the development of hyperscale data centres for some major tech companies.

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In recent times, the energy crisis resulting from the Russia-Ukraine conflict, the need for operators to reduce costs but, most significantly, the impending threat of climate change, have intensified the need to transition toward the development of sustainable data centres. Projections now indicate that by 2025, data centres’ energy consumption is set to contribute to 3.2% of the world’s total carbon emissions, potentially consuming as much as 20% of the global electricity supply. Industry regulatory pressure, the rising importance of ESG standards, the need to streamline operations and the rising development costs are driving data center operators to expand into previously unexplored areas of the globe.

In addition to an overview of the current state of the industry in Romania, Crosspoint’s study analyses a number of key indicators for data center development: internet infrastructure and technology, natural resources and energy, demographic trends, skill levels and availability of human resources, security and the risk of natural disasters.

“We have adapted to the Romanian market a scoring system included in the European Data Centers report issued by our partners at Savills and we are pleased to present the results of the first study in Romania conducted by a real estate company on the data center market. We have analyzed in detail each indicator included in this scoring and added new information to provide a complete and objective picture, detailing both the strengths and weaknesses of Romania as a destination for data center operators,“ explains Ilinca Timofte, Head of Research, Crosspoint Real Estate.

The Romanian data center market is still in its infancy. According to the study, there are currently 30 data centres on the Romanian market located in Bucharest, Craiova, Brasov, Cluj-Napoca and Timisoara. On a per capita basis, the capacity of data centres in Romania is only 3.2 W, well below the average for Nordic countries, which are at the top of the ranking with 22.6 W, but also below the CEE average, where per capita capacity is 4.5 W. However, Romanian data centres have the advantage of having one of the lowest Power Usage Effectiveness (PUE) coefficients, estimated at 1.37, well below the European average and very close to that of the Nordic countries.

“In addition to this fundamental aspect, Romania has a number of crucial resources for the development of the data center industry, from ensuring the sustainable operation of such a business to access to qualified and diverse human resources, and can become a target location for players in this market in the coming period,“ Timofte adds.