Why extreme heat is becoming the biggest challenge for the world's data centres

As temperatures soar to record highs across Europe and other parts of the world, the impact of extreme weather on critical infrastructure is becoming increasingly apparent. Factories, nuclear power plants and data centres are all facing mounting challenges as prolonged heatwaves strain operations. Rising demand for air conditioning has also overloaded power grids in several regions, leading to blackouts that can further disrupt essential infrastructure.

Reports suggest that severe weather has become the leading cause of losses in Zurich's US data centre builders' risk portfolio, accounting for nearly one-third of the company's claims, according to Zurich's Head of International Construction, speaking to CNBC.

The report also noted that many new data centres are being built in suburban and rural areas, where land is more affordable but historical records of extreme weather are often limited due to lower levels of development.

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Insurance firms stay vigilant over climate risks

A recent study by climate risk analytics firm First Street found that 79% of global data centre capacity faces elevated risks from acute climate hazards, including flooding, extreme winds and wildfires. These events have the potential to disrupt operations, increase downtime and drive up both insurance premiums and repair costs.

This year, around 64% of the global data centre capacity under construction is located outside traditional hubs such as Northern Virginia, expanding instead into so-called frontier markets, including West Texas, Tennessee, Wisconsin and Ohio. Emerging markets such as Brazil are also witnessing rapid data centre growth but may face increasing challenges from extreme heat.

Heat, however, is only part of the challenge. Cooling systems already account for roughly 40% of a data centre's energy consumption under normal conditions, with energy demand rising even further during heatwaves, precisely when air conditioning places additional pressure on electricity grids.

To address these challenges, technology companies leading the data centre expansion are redesigning facilities to operate reliably across a wider range of environmental conditions. Careful site selection, redundant infrastructure and real-time monitoring are increasingly being deployed to reduce the risks posed by extreme heat and severe weather.

Nvidia has also introduced improvements in cooling efficiency through its latest AI servers, which are capable of operating with cooling liquid temperatures of up to 45 degrees Celsius, significantly higher than previous generations. Even increasing chiller temperatures by a single degree Celsius can reduce energy costs by approximately 4%.

These developments are accelerating innovation across the technology sector, according to Aaron Lewis, Chief Commercial Officer of Global Data Center Solutions at HVAC company Johnson Controls. He noted that the company already tests its data centre cooling equipment under a wide range of temperature conditions to ensure reliable performance in diverse environments.