German Parliament passes Energy Efficiency Act (EnEfG). One of the main emphases of the law concerns data centers: inter alia waste heat requirements, energy efficiency standards, and the information obligations that are imposed on data centers.
Aim and purpose of EnEfG
On September 21, 2023, German Parliament passed the new Energy Efficiency Act ("EnEfG"). The Act serves to implement requirements under the draft EU Energy Efficiency Directive, which is part of the "Fit for 55" program. The new regulations will have a direct impact on data centers.
A particular focus of the EnEfG is on data centers. For data centers, regulations are essentially made on the following points: (i) avoidance and use of waste heat, (ii) power usage effectiveness, (iii) power supply from renewable energies, and (iv) introduction of an energy and environmental management system. The purpose of the law is to contribute to the reduction of energy consumption as well as fossil energy consumption and ultimately to mitigate climate change by increasing energy efficiency. "Data center" within the meaning of the EnEfG are data centers with a non-redundant nominal power connection capacity of 300 kW or more
Provisions
Avoidance and use of waste heat (Energy Reuse Factor – ERF)
All businesses (including data centers) with an annual average energy consumption within the last three completed calendar years of more than 2.5 GWh are obliged to avoid waste heat generated and to reduce it to the share of technically unavoidable waste heat, as far as this is possible and reasonable (zumutbar). The waste heat generated must also be reused by data centers as much as possible and reasonable (zumutbar). In this context, economic and operational concerns must be considered within the framework of reasonableness.
In addition, an energy reuse factor (ERF) has been imposed specifically on data centers: Data centers that start operations on or after July 1, 2026, must be constructed and operated to achieve an ERF of at least 10%; data centers that start operating on or after July 1, 2027, must achieve a projected ERF of 15%; and data centers that start operating after July 1, 2028, must achieve a projected ERF of 20%. The requirements are not to be achieved on an annual average basis until two years after the start of operations.
Compliance with the required ERF is not required in the following cases:
- the proportion of reused energy after commissioning no longer meets the requirements due to subsequent events and through no fault of the operator of the data center;
- there is an agreement on the use of waste heat concluded between a municipality located in the vicinity or an operator of a heat network and the operator of the data center, according to which the municipality or the operator of the heat network declares its intention to build or allow the construction of one or more heat networks, whereby the ERF requirements can be met within ten years; and
- the operator of a heat network located in the vicinity does not accept an offer to use reused energy at prime cost within six months, although the operator of the data center provides the necessary infrastructure for the provision of heat, in particular in the form of a heat transfer station.
Requirements on Power Usage Effectiveness (PUE)
Data centers that start or have started operations before July 1, 2026, must be constructed and operated to achieve a sustained annual average Power Usage Effectiveness (PUE) of less than or equal to 1.5 as of July 1, 2027, and less than or equal to 1.3 as of July 1, 2030. Data centers that begin operations on or after July 1, 2026, must achieve a PUE of less than or equal to 1.2. PUE describes the ratio of the annual energy demand of the entire data center to the energy demand of the information technology.
Power supply from renewable energies
With regard to the share of electricity from renewable sources, data center operators will be required to cover 50% of their electricity consumption from January 1, 2024, and 100% from January 1, 2027, with electricity from renewable sources.
Introduction of an energy and environmental management system
Data center operators are required to establish an energy or environmental management system by July 1, 2025. This includes continuous measurement of the electrical power and energy requirements of the main components of a data center and the adoption of measures to continuously improve the energy efficiency of the data center. From a non-redundant nominal connection capacity of 1 MW, there is also an obligation to validate or certify this system from January 1, 2026. The same applies to data centers with a non-redundant nominal connected load of 300 KW or more that are owned by or operated for public bodies. Under certain conditions, some data centers are exempt from this obligation. The obligation also does not apply to data centers that are scheduled to go out of operation before July 1, 2027.
Further provisions
In addition, operators of data centers are required to publish information about their data center for the previous calendar year by March 31 of each year and submit it electronically to the federal government. The required information includes inter alia total electricity consumption, PUE, and the percentage of energy reused. This information is stored in an energy efficiency register for data centers established by the federal government and transferred to a European database on data centers. The information must be transmitted for the first time by May 15, 2024, or July 1, 2025, depending on the nominal connection capacity.
In addition, operators of data centers offering services to third parties must present to their customers the energy consumption per year attributable to the respective customer as of January 1, 2024.
Violation of the obligations under Section 11 EnEfG (in particular compliance with the PUE and ERF values) and incorrect communication of information under Section 13 EnEfG constitutes an administrative offense and can be sanctioned with a fine of up to EUR 50,000 or EUR 100,000, depending on the violation.
In addition, the German government has the option of providing for exceptions and exemptions from the above-mentioned regulations for data centers for climate-neutral companies by means of a statutory order. It remains to be seen which requirements will be placed on climate-neutral companies and which exceptions and exemptions will be introduced.
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