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Emerging Technologies and Risk Management in the Future of Data Centres

This article examines emerging technologies such as renewable energy, lithium-ion batteries, liquid cooling, and small modular reactors in data centres.

01/09/2025 · 4 minute read

As the data centre industry navigates emerging technologies and regulatory demands, it is essential for data centre companies to prioritise comprehensive protection and efficient resource management. Contact our experts to discuss how they can help support your business's future development.

Data centres are increasingly using alternative energy sources — such as solar, lithium-ion batteries, and nuclear power — to meet their growing energy demands while reducing their carbon footprint. Insurance has an important role in supporting the development of these facilities and managing the associated risks of various power sources.

Photovoltaic (PV) solar energy

Solar panels offer data centres with a sustainable and cost-effective way to generate electricity. While solar power may only supply a portion of a data centre’s energy needs, it provides a useful and reliable source of stop-gap power.

Large, flat roofs — common in data centres — are often ideal locations for installing PV panels. However, as with all electrical systems, solar installations carry fire risks. These include potential ignition sources from electrical failures, increased fire loads from combustible materials in the panels and roof assembly, and the impact of panels on fire spread and suppression efforts. Mitigating these risks requires proper installation, regular maintenance, and strict adherence to fire safety standards.

Lithium-ion batteries

Lithium-ion (li-ion) batteries are used in data centres as a space-efficient and high-performance alternative to traditional lead-acid batteries. They offer higher energy density, longer operational lifespans, and lower maintenance requirements, making them an attractive choice.

However, li-ion batteries pose a fire risk due to their potential for thermal runaway — a self-accelerating chain reaction that can lead to fires or explosions. When a li-ion battery overheats or is damaged, it can ignite and be difficult to extinguish. The resulting fire can cause extensive damage and pose serious safety hazards.

Data centres typically use gas-based fire suppression systems — such as nitrogen or argon — to mitigate fire spread. While effective, these systems are not foolproof. They may not fully prevent thermal runaway if the gases fail to cool the overheated cells. Additionally, the off gases produced during overheating can ignite with minimal oxygen, further complicating suppression efforts.

Liquid cooling systems

Conventional air-cooling systems are not sufficient to manage the extreme heat generated by graphic processing units (GPUs) and tensor processing units (TPUs) used in data centres. Liquid cooling can offer a more effective heat transfer solution, helping to reduce energy and water consumption. However, implementing liquid cooling in data halls — whether for server racks or directly on chips — can introduce significant risks.

Leaks are a primary concern. They can cause damage to high-value hardware or lead to rapid overhearing. GPUs can reach temperatures above 90ºc within seconds — a critical threshold where they may shut down or sustain permanent damage.

The danger can escalate when leaks occur onto Li-ion batteries, which serve as uninterruptable power supplies (UPSs) in data halls. The chemicals within these batteries react dangerously with water, and exposure to water or water-based coolants can trigger thermal runaway — a rapid, uncontrolled increase in temperature that can cause fire or explosions. While the water-ethylene glycol mixtures used in some cooling systems are generally not highly flammable, they can ignite if exposed to the extreme temperatures associated with li-ion battery thermal runaway.

Additionally, these systems may contain fluorocarbons, which are highly toxic if released, posing health and environmental risks and resulting in costly cleanup operations.

Small modular reactors

Many AI companies are exploring the use of small modular reactors (SMRs) to provide a reliable, carbon-free energy source for their data centres. SMRs are simpler and safer in design and offer a cost-effective and quicker alternative to — up to 300MW of power per unit. Several tech giants have already signed agreements to develop SMRs.

While SMRs produce a large amount of low-carbon electricity on a reduced footprint, they also carry a range of risks. As with many breakthrough technologies, risks such as high first-of-a-kind production costs, confidence in safety and reliability, concerns about nuclear waste management, as well as regulatory barriers in some regions, are key issues. Risk management and insurance are essential for the development of nuclear power.

Working with insurers to find solutions

Data centres are highly complex assets, with their high-value infrastructure and the potential for significant financial losses from various risks making insurance a vital component of their development and operation. 

That’s why engaging with an insurance broker early in the project is essential. A knowledgeable broker can advise you on the insurance implications of your plans, help develop a tailored risk management strategy, and identify opportunities to optimize your chances of success.

The Marsh Data Centre Insurance and Risk Management Services team provides comprehensive risk management and insurance solutions for data centre developers, owners, and operators. If you’d like to know more, please contact a member of our team.

Our people

Jason Payne

Jason Payne

Data Centre Lead, Real Estate Practice, Marsh UK

  • United Kingdom

Angus Baker

Angus Baker

Associate, Advisory, Marsh UK (Cyber Practice)

  • United Kingdom

Alastair Nicklin

Alastair Nicklin

Vice President, Power and Renewable Energy

  • United Kingdom

Ralph Baulcombe

Ralph Baulcombe

Specialist II - Advisory

  • United Kingdom

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