The technology sector is undoubtedly one of the industries most affected by the volatility of energy prices in recent months. For data centers, where approximately 70% of operating costs are based on electricity—and despite long-term Power Purchase Agreements (PPAs) signed with suppliers—energy price fluctuations remain a significant concern.
While data center associations urge governments worldwide to adopt energy regulations that prioritize efficiency and sustainability, those of us in the sector have noted increasing concern among our clients. That’s why we want to address one of the most frequently asked questions: What factors influence energy prices?
1. The energy purchase price
This factor tops the list for a reason: the purchase price determines the selling price. But how is this value set? Energy prices are determined in the wholesale market according to the European system, which follows common regulations. In Spain, buyers and sellers negotiate through OMIE (Operator of the Iberian Energy Market) to establish the selling price.
To avoid exposure to market fluctuations, most data centers and other energy-intensive industries purchase energy from retailers through agreements that set a future price per kWh. Over time, this tends to be more advantageous than market rates. This model allows companies to secure a fixed amount based on past or projected consumption, with any additional energy bought at market prices.
Currently, due to rising energy prices, some retailers are unilaterally terminating contracts with their clients to avoid losses. For these retailers, paying penalties for breaching contracts is often preferable to incurring losses between their purchase and selling prices.
2. The data center’s PUE (Power Usage Effectiveness)
PUE is a key indicator of a data center’s energy efficiency, as it measures the percentage of energy used for cooling relative to the energy required for operation. The lower the PUE, the better the efficiency.
Free cooling systems, which use filtered cool air from outside to reduce reliance on cooling systems, are effective in lowering energy usage. However, their efficiency depends heavily on atmospheric conditions such as temperature and humidity.
For example, during hot and humid summers or autumns, the PUE tends to increase as outside air is less effective for cooling hot aisles. This directly impacts the energy required for IT cooling and, consequently, the cost per kWh.
3. Energy self-Generation capacity
Having the ability to generate energy through photovoltaic panels or wind turbines increases energy self-sufficiency. However, reliance on sustainable self-generated energy is limited by atmospheric conditions and the availability of sunlight in the data center’s location.
For Adam’s upcoming fourth data center in Parc de l’Alba, we plan to implement the maximum possible area of photovoltaic panels to power our facilities. This will improve PUE and lead to significant energy savings.
4. Energy storage capacity
If we aim to generate renewable energy sustainably (an attractive option for sectors like ours), we must also address the challenge of storing this energy for later use as demand requires. Following the ambitious commitment by Europe’s leading cloud and data center companies to achieve net-zero emissions by 2030, energy storage should move from being a possibility to becoming a reality.
Energy storage technology must be implemented and expanded within the sector to strengthen resilience against potential risks associated with fluctuating energy purchase prices.
Storage systems also provide backup power during grid outages and ensure that installations can maintain required loads until electricity supply is restored.
Energy Storage Systems (ESS) offer a potential solution by storing significant amounts of energy for specified periods. They add stability and flexibility to the grid by discharging electricity during peak demand, periods of low renewable energy production, or skyrocketing purchase costs.
One example is Battery Energy Storage Systems (BESS), which store energy by converting electrical energy into chemical energy via electrochemical reactions. Lithium-ion batteries are another promising solution for energy storage, which Adam is currently evaluating for possible future implementations.
Conclusions
Most companies strive to be more competitive, producing more and better at lower costs. In our sector, optimizing and reducing energy costs is a crucial factor for competitiveness.
At Adam, we recognize that energy costs are often perceived as uncontrollable and closely tied to market conditions—which, at present, indicate upward trends across all foreseeable horizons. However, we hope this article clarifies that, while the impact may still be limited, it is possible to take action on energy costs. Doing so is not just an economic priority but also a responsibility to our planet.
If you need more information or would like to speak with our expert team, don’t hesitate to contact us.
This article has been written by
David Ribalta
Director Comercial