Africa’s digital growth is an opportunity to think differently about design and act differently in data centre operation

Two of Africa’s biggest economies suffer regular power grid blackouts. South Africa continues to grapple with a formidable energy challenge caused by a strained and unreliable power grid prone to rolling outages. In Nigeria, the grid crisis has reached alarming levels, with two total grid collapses occurring within a single week in September 2023.

Such grid instability poses a significant hurdle for data centre development, as these are facilities that require constant and uninterrupted power. The situation is being exacerbated by ageing infrastructure, maintenance issues, and a surge in energy demand. Yet, the situation in both countries and across the African continent also present a unique set of opportunities for innovation. Data centre developers in South Africa and Nigeria could explore alternative power solutions, such as microgrids and demand response mechanisms, to fortify their energy ecosystems and at the same time fuel the growth of their digital economies.

This juxtaposition of challenge and opportunity highlights the imperative for innovative and sustainable energy solutions in an increasingly data-driven world. Sector growth in Africa’s digital services in line with the rollout of off-grid power, increasing internet penetration, rising smartphone usage and e-commerce have sparked a rush into data centres. Existing and future investment figures are impressive, and demand drivers are accelerating, but such rapid growth should not be delivered in a gold rush fever that ignores the opportunities to respond to demand with long-term, efficient and sustainable facilities.

Africa – a growing opportunity for data centre investment

There is much to be optimistic about in Africa’s data centre space. A report from market research group Arizton, found $2.6bn was invested in the market in 2021. It is expected that $5.4bn will be invested by 2027, at a compound annual growth rate of 12.73% over five years.

Digital Realty (bought Teraco in 2022), Equinix ($320m acquisition of MainOne in December 2021 to expand in Ghana, the Ivory Coast, and Nigeria) and Vantage ($1bn invested with plans for more) have all made significant market moves in South Africa and are pushing into new territories across the continent.

At the same time, local players are emerging. Typical projects include Liquid Intelligent Technologies’ 10MW data centre in Lagos, Nigeria. Africa Data Centres’ new facility in Accra, Ghana with an initial capacity of 10MW, and the potential to expand to 30MW is the largest data centre facility in West Africa outside Nigeria. Raxio Data Centres has secured a “sustainability-linked” $170m loan from a consortium of investors, who include French development finance institution Proparco, Emerging Africa Infrastructure Fund (EAIF) and investment manager Ninety-One. Raxio aims to accelerate the expansion of its facilities in seven African markets.

However, the growth of data centre facilities in both size and number across Africa inevitably raises concerns about their environmental impact. Globally there is a need for the industry to take a more

sustainable approach to minimize its carbon footprint and new builds in Africa present a sustainability opportunity which must not be wasted. Simply building as before and then fighting to get grid energy by relying on Africa's power generation mix that is heavily reliant on traditional sources such as coal, oil, and natural gas is not viable.

Crucial for the industry is developers choosing to move away from conservative design approaches and adopting more sustainable practices. Only through the use of energy-efficient technologies run off renewable energy dominant microgrids can data centres expect to significantly reduce their emissions profiles.

In short, the question is whether the industry is willing to leapfrog itself to adopting new sustainable designs, technologies, energy sources and practices.

Demand Drivers

Power and connectivity can mean different things in different markets of Africa.

Of Africa’s 1.2bn population, roughly half, 600 million people don’t have a dependable networked electricity supply. In Sub-Saharan Africa, two-thirds of people have no regular access to electricity. [ https://apnews.com/article/electricity-africa-just-energy-transition-d20d1ba86e90c3b9c81f0fc76979acfc https://www.usaid.gov/powerafrica/beyondthegrid].

This is being changed through the development of off-grid power systems. Much of this off-grid solar power is largely used to charge the more than 1bn mobile phone handsets as people rush to get connected and online.

According to the GSMA The Mobile Economy Sub-Saharan Africa 2022 report there will be 613m unique mobile subscribers by 2025 covering 50% of the population (of which 41m will be 5G connections). Mobile is forecast to generate $154bn in economic value by 2025. Nigeria boasted 199.6 million mobile connections as of March 2022, according to the West African country’s Communication Commission (NCC).

GSMA Intelligence data also showed that there were 108.6 million cellular mobile connections in South Africa at the start of 2022, equivalent to 179.8 per cent of its population. Egypt’s 98.29 million mobile users during the first quarter of 2022, represents 93.4 per cent of its population. Yet currently in central Africa, 39% of the population lives outside a mobile broadband coverage area. This figure is 16% for West Africa, 13% for East Africa and 12% in Southern Africa. In all, it is estimated that 43 per cent of the entire African population is still without smartphone access.

Africa, more than a distributed and rural data story

Africa is not just a story of remoteness and rurality. Africa’s 10 largest cities amount to 55 million people living in the continent’s biggest metros. Building and running the data centres required to support the businesses in these metros and how they serve a growing and ever more connected population means facing up to new challenges from dealing with unreliable grids to finding sustainable energy.

The data centre sector should look to the ‘leapfrogging’ efforts of the power and mobile sectors of off-grid power and network rollouts. In the power supply areas, industrial microgrids are being built around a combination of renewable sources (where available) and on-site engine-based power generation. Power companies are onto the huge opportunities for leapfrogging outside the major cities – avoiding

vast and costly fixed power line investment by jumping straight to solar and wind for power generation and building community, rural, and networked microgrids.

Leapfrogging is not a panacea but it shows that in power and telecoms, new thinking in supply and demand is facilitating rapid adoption and expansion.

New designs and operations

This is one reason among many that points to new data centre development in Africa requiring new thinking, new designs and new ways of operating.

The use of microgrids and battery energy storage systems (BESS) can enable data centres to operate independently of the main utility grid or use a combination of grid and renewable power sources. The BESS stores excess renewable energy generated during times of low demand and releases it when needed. In doing so, it overcomes intermittency issues to extend the usefulness of renewable power and reduce reliance on non-renewable sources. The African battery market and value chain could lead to the generation of thousands of jobs across the continent and a market revenue estimated to reach $1 billion by 2030. This market is driven by behind-the-meter (BTM) battery installations including UPS, telecom, rooftop solar, solar home lighting systems, and microgrids.

Beyond the direct resources that data centres can provide through district heating and cooling schemes from combined heat and power (CHP) systems within the facilities and feeding power to microgrids, data centres can also play a role in supporting social initiatives beyond their core operations.

In this respect, data centre developments hold the potential to be a catalyst for a host of power and connectivity investments. They can for example partner with sustainable, affordable housing developers. There are also many opportunities for partnering with local organizations to provide digital literacy programs or supporting education and healthcare services in underserved areas, helping to bridge the digital divide and enhance overall societal well-being.

Africa is an emerging powerhouse that nationally and regionally will decide its own digital infrastructure future according to its resources. For engineers and designers, the game starts sidestepping traditional thinking and leapfrogging to a sustainable future.