The truth (and myths) about data centres and demand

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The truth (and myths) about data centres and demand

There’s a lot being said about data centres, and unfortunately, not all of it gets to the truth. They’re often painted as energy-hungry giants built only for profit, with headlines pointing to water use and carbon emissions as proof the industry’s out of control.

But the reality is more nuanced. Data centres don’t create demand - they meet it. Every video call, every streamed film, every app in the cloud needs the infrastructure running behind the scenes. The real question isn’t whether we need data centres, but how we design and run them in a way that’s responsible and sustainable.

At RED Engineering, we believe it’s important to separate myths from reality in order to have an honest conversation about the essential role data centres play in modern society. In this piece, we’ll bust the leading industry myths - examining where demand really comes from and explaining why these facilities are so critical along the way.

Common misconceptions about data centres

Let’s separate myth from fact and explore what really drives demand, efficiency, and sustainability in modern facilities.

Myth #1: “Data centres consume excessive amounts of energy”

Reality: Data centres are some of the most highly optimised facilities in the built environment. Regular energy audits track energy use down to the kilowatt, and modern sites can achieve PUE ratios as low as 1.09 - indicating an incredibly energy-efficient centre, where just 9% of energy is used for cooling, lighting, and other supporting systems beyond the computing itself.

While overall consumption sounds large, the efficiency per service has improved enormously. A single rack in today’s facilities can deliver the same computing power that once required entire server rooms a decade ago.

Many operators are also working to integrate renewables into their supply, reducing their reliance on fossil fuels, and supporting grid stability - for example, by using decentralised microgrids with waste-heat recovery systems to convert excess heat into additional electricity.

Myth #2: “Data centres waste water”

Reality: Water use in data centres is more complex than headlines suggest. Many sites in England already operate efficiently - an August report surveying over 70 facilities found 51% use waterless cooling, 64% consume less than 10,000 m³ per year, and 89% either monitor their water use or rely on water-free systems.

AI workloads are increasing pressure on water, both directly through cooling and indirectly via electricity generation. Best practice now takes a full-footprint approach, considering location, grid mix, and workload-specific demand. Design and operational strategies, such as air or adiabatic-free cooling, liquid or immersion systems, heat reuse, workload scheduling, and energy sourcing, can all manage water sustainably.

Water use shouldn’t be viewed as inherently wasteful - impacts vary by facility and can be significantly reduced through thoughtful design, siting, and operations.

Myth #3: “They only exist for big tech profits”

Reality: The majority of data centre demand comes from everyday digital activity - streaming, gaming, cloud backups, and business applications. Every Netflix episode streamed in 4K, every Zoom call connecting global teams, and every smartphone backup consumes data centre capacity.

The push for business transformation adds even more pressure. Cloud services have changed how organisations operate: e-commerce platforms need instant scalability during busy periods, remote work relies on cloud-based collaboration tools, and supply chains depend on real-time data processing across global networks.

Healthcare, finance, and emergency services also rely on data centres. Patient records and diagnostic imaging, real-time financial transactions, and cloud-based dispatch systems all require constant, reliable infrastructure. Even the built environment is becoming increasingly digital - smart buildings, automated transport systems, and modern energy networks all need robust data centre support.

Data centres form the backbone of the digital infrastructure that makes modern society function, supporting everything from small businesses to critical public services.

Myth #4: “AI is the only reason data centre demand is growing”

Reality: AI workloads are high-profile and resource-intensive, but they represent only part of the story. Growth is also being driven by technologies that are transforming data centre infrastructure.

Machine learning and advanced analytics, for example, require constant computing power to process huge amounts of information - everything from predicting when machines need maintenance in factories to helping doctors deliver more personalised care.

Edge computing is another driver. By placing smaller facilities closer to users, services like self-driving cars, industrial automation, and smart-city systems can respond instantly, without delays caused by sending data across long distances.

Meanwhile, the Internet of Things (IoT) connects billions of sensors and devices (smart meters, wearable health trackers, connected appliances), all of which constantly produce data that needs processing and storage in real time.

Supporting these technologies means modern data centres must handle much more intense workloads than traditional web, streaming, or cloud applications. They need denser racks, advanced cooling like liquid or immersion systems, careful energy monitoring, and strategies to cut carbon emissions.

Myth #5 “A data centre is purely an energy sink and gives nothing back”

Reality: Modern data centres are no longer just energy consumers - they can actively support local energy ecosystems. Many facilities now act as “energy prosumers,” producing and exporting energy while integrating closely with their surroundings. 

Waste heat from high-density servers can be captured and redirected to district heating systems or nearby industrial processes, turning energy that would otherwise be wasted into a useful resource.

Data centres also provide flexibility for the grid. Battery storage and microgrid setups allow facilities to operate flexibly, supporting a greater share of renewable energy on the grid and reducing the risk of blackouts. Technologies like Organic Rankine Cycles can even convert otherwise lost heat into electricity, making energy use more dynamic and efficient.

Rather than being passive energy consumers, well-designed data centres are becoming active participants in local energy ecosystems - contributing clean power, reusing heat, and offering the flexibility that modern grids increasingly require.

Balancing demand with responsibility

Rather than pushing back, the industry is tackling rising demand head-on through smarter, more sustainable engineering and construction.

Sustainable data centre design

Across the industry, sustainable data centre design increasingly focuses on minimising environmental impact from the ground up. Sites are chosen with access to renewable energy in mind, alongside climates that naturally ease data centre cooling demands. 

Construction methods lean on local materials, efficient building systems, and layouts that maximise free cooling opportunities. The most forward-thinking facilities are designed to work with their environment rather than against it, accounting for everything from local grid capacity to water usage and long-term community impact.

At RED, sustainable data centre design means exactly that. In the Netherlands, our feasibility study on liquid immersion cooling and waste-heat reuse illustrated how advanced thermal solutions can harness local climate advantages, lower environmental impact, and benefit surrounding communities.

Energy audits

Across the industry, regular energy audits have become a critical tool for reducing operational impact. These go far beyond tracking a single PUE figure; they identify inefficiencies across power distribution, cooling, and backup systems, while also taking into account embodied carbon from supply chains.

By analysing the full energy lifecycle, from supply chain impacts to real-time performance, audits help set new benchmarks and push best practice across the industry.

RED is at the forefront of this shift: for the Frankfurt 5 development, we carried out embodied carbon modelling aligned with CRREM pathways, helping the client make material and design decisions that cut lifecycle emissions while meeting strict ESG commitments.

Advances in data centre cooling

Cooling has historically been the largest single energy load in data centres, but today, the focus is shifting from incremental efficiency gains to rethinking thermal management altogether.

Techniques such as liquid cooling allow heat to be removed directly at chip level, while free cooling leverages natural airflows where climate permits. Circular water systems and waste heat recovery further reduce resource use and create opportunities to support local communities.

RED has delivered on this principle in practice: our Halk Bank Data Centre project in Turkey was designed with 500 kW of low-grade waste heat exported to a nearby campus and used mass-air free cooling to reduce energy use. The facility also achieved Tier III and LEED certifications - demonstrating that sustainable practices produce proven, practical results.

Decarbonisation pathways

Achieving net zero requires systemic change: from sourcing renewables through power purchase agreements, to on-site generation, energy storage, and active participation in grid balancing services. The best designs are modular and adaptable, ensuring facilities remain efficient as technology evolves.

RED’s approach is to treat data centres as “energy prosumers.” Our work on microgrid integration and feasibility studies for waste-heat export shows how facilities can support renewable integration, stabilise local grids, and even give energy back - demonstrating that future data centres are part of the solution, not just consumers.

RED's perspective

At RED, we’re addressing common misconceptions about data centres by actively working across three key areas: education, authority, and transparency.

Education

At RED, we cut through the noise around data centres by turning complex engineering into practical insight. Rather than just talking theory, we share real-world engineering insights and host events that unpack how modern facilities actually work. At our next event, Nikos Papadimitriou, our Principal Energy Transition Engineer, will explore “Water-Based and Waterless Cooling in Data Centres,” illustrating how advanced data centre cooling approaches are reshaping sustainability in real-world facilities.

Authority

At RED, we back up our sustainability claims with verified performance. Our team ensures client data centres comply with the world’s leading green building standards:

• LEED (Leadership in Energy and Environmental Design)

This internationally recognised certification evaluates energy efficiency, water use, carbon emissions, and overall environmental performance. A LEED-certified data centre reflects sustainability embedded from the ground up - not added as an afterthought.

• BREEAM (Building Research Establishment Environmental Assessment Method)

As the longest-standing sustainability assessment, BREEAM looks at lifecycle impacts, resilience, material efficiency, and operational performance. Achieving BREEAM certification demonstrates measurable, ongoing environmental responsibility throughout a data centre’s life.

Our dedication to these benchmarks delivers tangible outcomes. Technical Director Alex Vella recently guided a project to BREEAM Outstanding, the highest rating - a reflection of our exceptional environmental performance and sustainable construction practices.

Transparency

At RED, we gain trust by being upfront about the challenges and opportunities data centres present, while emphasising their crucial role in powering the digital services that underpin modern life. By engaging honestly with complexity, we help clients and stakeholders understand that true sustainability comes from understanding complexity, not simplifying it or taking shortcuts.

Our integrated approach keeps clients ahead of regulatory changes and market expectations, delivering facilities that meet ever-increasing digital infrastructure demands while prioritising environmental responsibility.

Power society, protect the planet - let RED design your next-generation data centre. Contact us today to discover how we can help you create infrastructure that serves society while safeguarding the environment.