Given the heightened focus on climate control and sustainability, data centers worldwide are working full throttle to develop cooling solutions that utilize less power and consume less water, providing opportunities in a rapidly developing technology: immersion cooling. Liquid cooling is rapidly moving from a niche innovation to a critical infrastructure requirement impacting not only data centers but also battery energy storage systems (BESS) and electric vehicle (EV) charging stations.¹

“Nearly one-third to one-half of the total power consumed in a data center goes into conventional air cooling and heating, ventilation and air conditioning (HVAC) systems,” says Pooja Sharma, project manager at Kline.

Thermal impact of data centers is also observed on water usage, where tons of water is required to keep data centers cool. In particular, data processing centers that are employed for artificial intelligence (AI) applications by giant corporations consume tremendous volumes of water.

Globally there are more than 11,000 data centers spread across the world. Global data center capacity is projected to grow at a CAGR of 10%-15% in the next decade, and nearly 60% of this new capacity will be focused on developing compute-dense capabilities, largely driven by the AI rush. "This will put increasing demand on electricity consumption, especially in regions seeing substantial growth in data center capacity, such as the U.S., EU, Ireland, Denmark, India and China,” says Sharma. “There is an imperative for higher performance, smarter, more energy/cost-efficient and sustainable data centers.”

The industry is beginning to move toward alternative forms of technologies in an effort to improve thermal management and reduce the overall power consumption in data centers. According to Sharma, who highlighted findings from Kline’s Immersion Cooling Fluids in Digital Infrastructure report: “Immersion cooling can help solve these challenges in compute-dense environments. This technology offers superior performance compared with other technologies, pointing to value potential and opportunities.”¹

Market segments are adopting immersion cooling technology at different rates. Taking advantage of this growing space will require a sector-specific and compelling value proposition balancing the key needs: performance, cost and sustainability.

The biggest challenge for data center operators in shifting the entire facility from air-cooled to immersion-cooled is that the existing cooling infrastructure is depreciated faster than planned, which has a negative effect on the return on investment (ROI) of the new liquid cooling installation. At the same time, the total cost of ownership is lower, central processing unit (CPU) and graphics processing unit (GPU) performance is higher and the environmental benefits are potentially huge. For equipment to meet tomorrow’s business needs, immersion cooling technology has become a necessity.¹

The BESS market is experiencing strong growth primarily driven by sectors like power generation and renewable energy generation where batteries are employed to give better grid stability and continuous power transmission, especially in high load situations. Lithium batteries in such set-ups come with the need of thermal management—nearly 90% of the batteries used in the U.S. today are using indirect liquid cooling. Immersion cooling seems to be the next step-up into this technology, which is likely to take the performance of the batteries to the next level but is also able to offer fire safety benefits. This application is fairly new and so is currently seeing the emergence of its value chain.

In the EV market, there is a growing trend towards fast chargers to make the adoption of EVs easier. The caveat here is that as EV charging speeds increase, so does the heating up of the power electronics that are inside the charging stations. Liquid cooling is being looked at as a feasible technology for keeping these systems cool.

REFERENCE
1. Kline’s Immersion Cooling Fluids in Digital Infrastructure report. Available at https://producthub.klinegroup.com/public/overview/1001228/immersion-cooling-fluids-in-digital-and-energy-infrastructure-2025.

This article is adapted, by permission, from Kline & Company, Inc. To read the original article, visit www.klinegroup.com.

Pooja Sharma is a Project Manager at Kline + Company in the Energy practice. You can reach her at pooja.sharma@klinegroup.com. Kline + Company is an international provider of world-class consulting services and high-quality market intelligence for industries including lubricants and chemicals. Learn more at www.klinegroup.com.