Data centres are essential and expanding rapidly
What is a data centre?
Data centres are the physical infrastructure that keeps our digital world running. They are vast networks of computer servers that operate continuously to ensure cities stay connected, whether it’s sending an email, planning a journey, or completing a business transaction.
As demand for cloud computing, AI, and online services grows, data centres have become critical to how cities function. More than 1,700 are now located within C40 cities to reduce delays and improve reliability. This rapid expansion makes data centres an essential part of city infrastructure, and a growing focus for climate action.
Understanding the challenge
How data centres impact cities
To operate most effectively, data centres must be close to users and services. However, they require large amounts of resources. As the digital economy grows rapidly, some cities are already feeling the impact of data centre growth. Concerns about rising energy costs, water security and local environmental quality are shaping public attitudes towards new developments1.
Increased energy demands
Data centres must operate 24 hours a day, consuming large amounts of electricity. A modern data centre can use as much power as 100,000 homes, adding additional pressure to urban energy systems.
Water consumption for cooling
Servers inside data centres run continuously, generating large amounts of heat. To keep them operating safely, this heat is removed through cooling systems. Many data centres use water-based cooling, which requires significant volumes of water.
Land use in urban environments
Data centres take up valuable space and must be located on energy networks. If not properly managed, heat released during operation can also affect surrounding areas. As more are built within cities, they compete with other demands for land, such as housing and green spaces.
How cities are driving sustainable digital growth
Building digital infrastructure that supports a clean energy future
Cities are setting standards that ensure data centres limit environmental impact and ensure that their growth aligns with climate action planning. C40 cities are already introducing policies to manage energy use, water use, and land use for new and existing facilities.
- Phoenix has introduced zoning and water recycling requirements for data centres to cut resource use.
- Stockholm is capturing waste heat from data centres to warm tens of thousands of homes.
- Singapore is setting strict efficiency standards and reviewing where new developments can be built to protect its limited land and energy resources.
- Cape Town is developing ways for data centres to buy renewable energy directly from the grid.
These initiatives show how cities are leading the sustainable development of digital infrastructure. By setting clear and innovative standards for the data centre industry,, mayors can ensure data centres are part of the transition to a clean energy future that delivers better outcomes for everyone in cities.
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Sources
- https://heatmap.news/politics/data-center-cancellations-2025 ↩︎