eco Association: German federal government must embed the system-relevance of data centres in energy crisis emergency plans

Civey survey: Three out of four IT decision-makers rate the possible outage of data centres as problematic for their business activities.

  • Approximately 45% of IT decision-makers see their company’s digital business activities as being at risk due to rising electricity prices, including at data centres
  • Around 86% call on the German federal government to include operators of digital infrastructures as system-relevant infrastructure in its emergency plans
  • Small and medium-sized data centre operators in particular fear threats to their existence from rising energy costs

Digital infrastructures, especially data centres, constitute the baseline for the digital transformation of the economy and society. They ensure the smooth operation of digital processes in industry, business, public administration and services, and are thus essential for the functioning and sovereignty of Germany as a digital and business location.

An electricity shortage in the current looming energy crisis could have a negative impact on the operation of data centres and thus also become a risk factor for user companies. In this context, many companies fear negative consequences for their business activities and call on politicians, in light of the impending energy crisis, to include data centres in existing and future emergency plans.

This is the result of a current representative cross-sector survey of IT decision-makers in Germany conducted by the opinion research institute Civey on behalf of eco – Association of the Internet Industry.*

According to the survey, 75.3% consider a possible failure of data centre or cloud services due to an electricity shortage to be problematic for their company.

Approximately 45% see the digital business activities of their company as being at risk due to increased electricity prices, including at data centres.

Around 86% are of the opinion that operators of digital infrastructures should be included as system-relevant infrastructure in the German federal government’s emergency plans for an impending energy crisis.

“Data centres and cloud offerings are system-relevant for numerous user industries, including e-health, automotive, aerospace, banking or logistics,” says Dr Béla Waldhauser, Spokesperson for the Alliance for the Strengthening of Digital Infrastructures in Germany, which was founded under the umbrella of the eco Association. “An outage due to electricity shortages or fluctuations would be fatal for a large part of the German economy and result in drastic curtailments for the population. Digital infrastructures form the backbone of digitalisation. The German federal government should not underestimate their influence on our working and social lives and should therefore definitely include the operators in its emergency plans for dealing with a possible electricity shortage.”

High energy costs pose particular threats to the existence of small and medium-sized operators

The fact that current energy price developments are having a considerable impact on the electricity-intensive data centre industry is confirmed by another survey recently conducted by the Association of the Internet Industry among its member companies. Small and medium-sized operators in particular rated the development on the electricity price market as being critical to very critical – in some cases, even as threatening their existence.

In addition, some of the companies complained about a lack of transparency on the part of energy suppliers and politicians. Larger companies often see themselves in a better position here, as they usually have long-term contracts as well as internal resources to track and analyse volatile developments on the energy markets.

On the other hand, large players in the European data centre market fear that customers will permanently move to other European countries. From this perspective, some of the large providers surveyed state that they do not want to pass on the full amount of the current price increases to their customers.

Waldhauser: “Electricity costs are currently by far the highest in Germany”

“The looming energy crisis is certainly a challenge for other EU countries, but in Germany electricity costs are currently by far the highest,” Waldhauser goes on to say. “The German federal government, together with the data centre and cloud industry, should promptly consider approaches to define emergency breakpoints.”

As a short-term measure to ensure international competitiveness, the majority of the surveyed association members suggest a regulated industrial electricity price. In general, a multiple number of the companies would like to see standardisation and unification of the energy market.

In the medium to long term, data centre operators are calling for a significant acceleration in the roll-out of renewable energies and the necessary storage technologies. This also includes easier requirements for the installation of photovoltaic systems in the data centres themselves.

Perspectives on how the data centre industry can be made even more sustainable in the future are also provided by eco in a cross-association position paper.

* The market and opinion research institute Civey surveyed around 1,000 private-sector IT decision-makers between 23 September and 25 October 2022. The result is representative. The statistical error of the overall results is 5.7 per cent.

eco Association: German federal government must embed the system-relevance of data centres in energy crisis emergency plans