The European Commission has launched a new rating system for data centers, assessing their energy and water efficiency with ratings from A to G.
On September 21, the European Commission (EC) introduced a new system aimed at assessing data centers across Europe based on energy and water efficiency. Facilities will receive ratings from A to G for both metrics.
Starting in 2024, data center operators with an IT capacity of at least 500 kW must submit operational data to a centralized European database, which will not require them to report energy consumption from scratch.
This data will facilitate the automatic generation of electronic labels for comparing facilities, with the first labels expected to roll out by August 15, 2027, and updated annually thereafter.
Efficiency Metrics Explained
The efficiency of data centers will be gauged using two key metrics: Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE). PUE measures total energy usage against the electricity consumed by IT equipment, while WUE evaluates freshwater usage relative to energy consumption.
Each metric consists of seven classes from A to G, where lower values indicate greater efficiency. For instance, a class A rating for PUE is defined as 1.15 or lower, while a class G rating is for those exceeding 1.9. For WUE, the top rating is for values of 0.1 or less, with the lowest class for WUE values above 1.
The labels will also provide additional context, including details about renewable energy use, local climate factors, grid support involvement, and the potential for waste heat reuse. An explanatory document will accompany the labels, addressing the importance of WUE in relation to regional water stress.
Anticipating AI Growth in Data Centers
Currently, data centers account for around 2.5% of the EU's electricity consumption. The EC projects an increase in installed capacity from approximately 12 GW in 2025 to 28 GW by 2030, driven largely by the growing demands of AI and advanced computing.
In tandem with the rating system, the Commission is working on establishing mandatory minimum efficiency standards for data centers. A public consultation has been initiated, running for 12 weeks until December 14, with the intention of presenting legislative proposals by the second quarter of 2027.
Future regulations may introduce minimum efficiency requirements for both new and existing data centers, although specific standards have yet to be finalized.
The regulation for the new rating system is pending approval, with the European Parliament and the Council of the EU having a two-month window to raise objections. If no objections are made, the regulation will take effect 20 days after its publication in the Official Journal of the EU.
In related concerns, Water UK had previously warned of potential water shortages in the UK due to the expanding AI technology landscape. Additionally, Pennsylvania has imposed stricter regulations on large data centers, requiring annual disclosure of electricity and water consumption starting in 2027.
