- 54% of global data center capacity is at risk of temperature-related climate stress
- Even before damage occurs, operating costs can skyrocket to keep up with cooling demands.
- Future projects should focus on temperature projections and resource availability.
A new report from First Street has identified extreme heat as one of the most significant long-term risks facing data centers around the world, with rising global temperatures, increased hardware power density and forced cooling demands 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 increasing chronic climate risks, such as rising temperatures, more frequent heat waves, droughts and water shortages.
But in addition to causing physical damage, rising temperatures can also increase operating costs simply by requiring more cooling capacity, the report maintains.
Heat is the worst enemy of a data center
Higher temperatures mean cooling systems must work harder to keep servers within safe temperature ranges, resulting in higher electricity consumption, lower cooling efficiency, increased wear and tear on cooling equipment and potentially all server hardware if optimal temperatures are not maintained, and higher operating and maintenance costs.
With cooling already one of the largest ongoing expenses for data centers, rising temperatures could exacerbate the effects.
The summer of 2026 is already proving to be a stress test for data centers in the Northern Hemisphere, with temperature records broken in Europe and North America, where around 50% and 46% of capacity, respectively, are located in regions with chronic heat and drought. Up to 89% of Asia-Pacific capacity faces the same challenges.
Looking ahead, the report concludes that future investments in data centers should focus on future temperature projections rather than historical climate data, and on the availability of power and water to support long-term cooling operations.
Companies could also look to locate campuses in low-risk areas, which have so far seen comparatively slower development.
“As digital infrastructure continues to expand globally, institutions that incorporate climate risk into site selection, underwriting and capital allocation decisions will be better positioned to identify resilient opportunities and manage long-term exposure,” the firm says.
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