Interview with Francois Sterin

Data centre operators have always juggled the three competing factors of affordability, availability, and sustainability – and the plates haven’t always stayed in the air.

Now, with the huge rise in processing power needed to fuel AI, there is a fourth factor to consider. Access to power is a key priority for data centre operators, and even when operators can get any power at all, its price, availability and sustainability also comes into the equation.

Data4’s COO and Datacloud Energy & ESG Advisory Board member François Sterin is well placed to talk about the challenges involved in this ‘quad-lemma’. He has a portfolio of data centres to manage, but through the Data4Good program he also needs to keeps a keen eye on how the industry can meet its societal obligations as well as its SLAs – all while ensuring there is enough power to keep the chips running.

In a conversation with Datacloud’s Managing Director Annabel Helm, François shares insights on his strategies for the markets he works in, how data centres can control for power availability fluctuations, the importance of the unglamorous world of retrofitting for cutting PUEs, and a lot more – here is the full conversation.

Francois Sterin

Can you tell us about you and your role, specifically related to sustainability?

As COO, I oversee all the operations of the companies, including the data centre operations, country operations, and energy operations, as well as energy policy and supply regarding energy and sustainability.

I'm also the sponsor of the Data4Good programme at Data4, which is our ESG program that we put together four years ago with several initiatives there, not just on energy, but also on social acceptability. Everything comes back eventually to the environment and energy.

All energy procurement and energy supply strategy falls under me. We also look at the long-term vision of how we feed our data centres with renewable, low-carbon energy. There has been an evolution over the last 10 years in how we consider sustainability and energy for data centres. It was mostly renewable, and now it's renewable and low carbon – you've heard about all those nuclear deals that the hyperscalers have done. Data4’s biggest part of the portfolio is still in France, where we have a history of low-carbon and nuclear energy as well.

We feel we are now at a really interesting time in terms of the energy sector, sustainability, and data centres coming together. We have existing sites fed with traditional grid supply, but we're also looking at new types of energy management on-site, with heat reuse, for instance, which I include in energy.

One of the things we've talked about with power for a long time is the trilemma of affordability, availability, and sustainability. Now in Europe, it feels like there's a fourth element to make it a quad-lemma – the quality and stability of power. How are you managing that, considering all four are so important when planning Data4’s energy mix?

When I think about energy, it's a question of price and environmental impact. Energy is now a driving force for renewable deals. We've done PPAs in France with local developers. Our strategy is to do deals in one country for the data centre in that country. We've done a PPA in France and we're about to close PPAs in Italy and Spain for data centres there. We're also looking at new markets. When we do these deals, it's both to reduce emissions and environmental impact, and to ensure some kind of predictability on price and supply security, especially in Europe where it's become more challenging. This is virtuous because it's green and makes business sense. It's a strong driving force.

Security of supply is changing quickly as well. Grid providers realize the need for large amounts of electricity for data centres, but they're not exactly sure they can always provide it. The base assumption that a data centre will have a 100% reliable grid feed is being challenged. Now we need to consider future situations where the grid might not be available 100% of the time. Before, this was a prerequisite that we thought was untouchable – but over the last three to five years this has been challenged. Grid providers are adapting.

How to we answer this? With a combination of potentially long-term on-site solutions and by having not just data halls but also energy hubs on future sites. Data4 is taking this seriously. We're part of the Net Zero Innovation Hub with Google, Meta, Danfoss, and Schneider. We're the only data centre operator in that group, working with hyperscalers, customers and equipment suppliers to solve energy supply issues. There is definitely a dilemma or a trilemma – operations teams don’t want to change as they want to stay as mobile as they were before.

Ensuring adoption of new energy supply solutions by data hub end users is another step we'll need to address. There won't be a silver bullet like "small nuclear will change everything." It's going to be a combination of securing long-term agreements and on-site work - all while being held to high environmental standards. In the past, data centres have seen some resistance from local communities – what are these facilities taking a lot of energy and not creating jobs? – so you need to convince communities to deploy the facility, which means taking a leading role in terms of sustainability and environmental credentials.

It's difficult enough to get planning for a data centre as it is – adding an SMR next to a data is going to be an interesting community engagement project!

Especially in countries like Germany. In the UK, it might be easier since new nuclear projects are already underway.

When it comes to strategic priorities for future-proofing your energy mix, where are you seeing changes in how you interact with the grid, given their (energy providers’) need to understand more about data centres?

We haven't seen major changes yet. We're still in a conventional model where we consume from the grid without smart management, like in a house – but with a 200KW plug instead of a 200-volt plug. This doesn’t really exist yet. There's lots of opportunity, but the question is how it will impact service quality and the value chain. The data centre industry isn't quite ready yet. However, with new AI facilities, we might see a a setup similar to crypto, with different SLAs and operating models.

In terms of engagement with energy players, we're seeing utilities wanting to do joint ventures in data centres. On a day-to-day basis, but we're observing large funds financing data centres alongside renewables and fibre infrastructure. This kind of integration is happening quickly.

You mentioned leading the Data4Good initiative. Are there any achievements in the last 12 months you'd like to highlight?

I don’t know where to start! While we have a lot of focus on local engagement and the social side, our philosophy starts with the environment and innovation given we are a technical asset. We focus on reducing emissions and making sure we have as small an impact on the environment as possible. We’ve been very focused on lifecycle assessments – not just PPAs but looking at the entire carbon footprint using the Greenhouse Gas Protocol with an SBTi trajectory.

We're also leading in Scope 3 emissions. For example, we have low-carbon concrete initiatives in all our data centres, which are all BREEAM certified. Our new SDC in Poland will have a gold or platinum standard BREEAM certification.

We might not have underwater centres or anything flashy like that, but we are looking at every single thing and how we can reduce the impact. For example, we've reduced concrete impact per megawatt by 13% since 2020 and aim to continue decreasing this. We retrofit older data centres to improve energy efficiency. Last year, we retrofitted our first data centre in Paris, improving the PUE by design from 1.6 to 1.25 by upgrading the cooling system. This was a significant gain, which we were pleasantly surprised by – this kind of ‘behind the scenes’ retrofitting project has a huge impact.

Is there a single issue around power availability that keeps you awake at night? What collaborative action does the industry need to solve this?

We're in a booming sector, so things are going well overall. However, there's super high demand – the supply to demand ration is crazy – and new players are entering, trying to benefit from the boom cycle. But to be frank, they don’t always know what they are doing, and this race for capacity might lead to environmentally poor solutions. When I hear companies deploying diesel generators as permanent solutions, I think it is OK as a transition – but will this end up being the default? Are we going to reopen old coal-fired power plants in Germany? The energy transition we need isn't keeping pace with AI and data centre growth. With a lot of players racing for more capacity, they are foregoing innovation to get this – “I don’t care about sustainability, I just want the megawatts”. We have seen this trend a lot recently. More megawatts are great for an operator, but we have a social responsibility to ensure we are going in the right direction. We need to address this as an industry by getting energy and data centre players together.

We are also being targeted by the authorities – but we are just meeting society’s demand for more AI. We’re still a bit young as an industry to have the kind of lobbying other energy-intensive industries like aluminium factories have, for example.

This comes back to the S in ESG - we haven't done enough to show our role in decarbonizing other industries. While we may be taking the bulk of the power, moving to the cloud and implementing AI supports decarbonization across other industries.

You’re absolutely right. But as data centre operators, we don't have all the cards. It's a broader discussion involving AI and cloud. We must avoid finger-pointing debates and focus on constructive dialogue.

François Sterin is on the Advisory Board of the Datacloud Energy and ESG event – get your pass here to join him in Brussels.

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Top 20 Data Centre Energy Executives: François Sterin, COO, Data4 Group