- 54% of global data center capacity is at risk of temperature-related climate stress
- Before the damage even occurs, operating costs can increase to keep up with cooling demand
- Future projects should focus on temperature forecasting and resource availability
A new First Street report has identified extreme heat as one of the most significant long-term risks facing data centers worldwide, with rising global temperatures, higher hardware power density and strained cooling needs all contributing to the problem.
More than half (54%) of global data center capacity surveyed is now said to be located in markets expected to face growing chronic climate risks such as rising temperatures, more frequent heat waves, drought and water stress.
But in addition to causing physical damage, rising temperatures can also increase operating costs simply by requiring more cooling capacity, the report claims.
Heat is a data center’s worst enemy
Higher temperatures mean that cooling systems have to work harder to keep servers within safe temperature ranges, leading to higher electricity consumption, lower cooling efficiency, greater wear and tear on cooling equipment and potentially all server hardware if optimal temperatures are not maintained, and higher operating and maintenance costs.
Since cooling is already one of the biggest ongoing expenses for data centers, rising temperatures could exacerbate the effects.
The summer of 2026 is already proving to be a stress test for Northern Hemisphere data centers, with temperature records being broken in Europe and North America, where around 50% and 46% of capacity are located in areas of chronic heat and drought, respectively. As much as 89% of Asia-Pacific capacity faces the same challenges.
Looking ahead, the report concludes that future data center investments should focus on future temperature forecasts rather than historical climate data and the availability of power and water to support long-term cooling operations.
Companies could also seek to locate campuses in low-risk areas, which have so far seen relatively slower development.
“As digital infrastructure continues to expand globally, institutions that incorporate climate risk into siting, underwriting and capital allocation will be better positioned to identify resilient opportunities and manage long-term exposure,” the firm says.
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