“Our increasing use of this,” said Bill Thomson, vice president of marketing and product development at DC BLOX, a multi-tenant data center, holding up his smartphone, “more and more applications being driven by that, and our use of it, is what’s driving the need for more data center space.”
Thomson spoke on the weekly Broadband Breakfast podcast about the growth of the data center industry, and also the infrastructure demands these facilities place on electric utilities and their need for communications infrastructure. Data centers are part of the new “digital economy” supporting the countless apps and other digital platforms serving consumers, businesses and government.
“A significant impact on the growth of the data center industry is available power,” he said, adding the emergence of AI is set to “have massive impacts on the data center and power infrastructure.”
A standard data center serving a “hyperscale” technology company like Amazon Web Services (AWS), or Google, generally needs about 1 million square feet of space and requires about 200 megawatts of power or more, Thomson said, indicating those concepts could already be outdated.
“The next generation of AI data centers … aren’t going to fit in the design model that we’re building for today,” he said. “The design, the density, the type of cooling … all of those things are going to change when you get to the densities required for a true AI data center.”
The U.S. colocation data center market has doubled in size in four years and vacancies are at a record low of 3 percent, said Melissa Farney, director of marketing at TECfusions: “Demand is just going out the roof.”
“We just can’t even get there fast enough,” Farney said during the panel. “Keeping pace with the skyrocketing demand is absolutely critical. It requires rapid ability to deploy and scale at the same time.”
Rather than building new data center facilities, TECfusions has been retrofitting existing sites, which are usually old defunct industrial facilities. These offer both the size requirements for a data center but, perhaps more importantly, the power requirements. These developments benefit by still having large amounts of power allocated to, and serving them, she said.
“Site reuse is allowing us to deploy very, very quickly, with minimal modification,” she said. TECfusions will often add supplemental electric power, with an on-site microgrid development.
The power requirements for data centers could in fact, advance the development of clean energy, Thomson said, given the leverage of major data center players like AWS, Google or Apple. These technology companies will often structure a power purchase agreement that funds the development of clean energy, which is in turn accelerating the development of clean energy.
The growth of data centers — and their electricity needs — is happening alongside the transportation sector’s transition to electric vehicles. Not only are personal vehicles morphing into battery-electric plug-in models, so is the heavy-duty vehicle market. Heavy-duty charging infrastructure is popping up around major ports in cities like Los Angeles and Oakland, Calif., while a pilot project to electrify the Interstate 10 shipping route between Los Angeles and El Paso, Texas, is underway.
Smart Freight Centre, a nonprofit focused on decarbonizing the freight sector, and Terawatt Infrastructure announced the launch of a coalition of trucking companies and charging infrastructure to support battery-electric trucking.
Pacific Gas and Electric (PG&E), a major investor-owned utility in California, has transitioned to a “high electrification forecast for the current planning cycle. And that’s more supportive of building grid capacity, proactively, and therefore more supportive of faster transition to electric vehicles,” said Nick Morelli, then PG&E analyst and decarbonization strategist, during a July 2023 webinar organized by the Zero Emission Transportation Association.
Aside from the negotiations with electric utilities, data centers can also get bogged down in the public approval process. To make them more palatable to public and elected officials, developers will focus on the broadband infrastructure they can bring to a region, industry watchers have said, noting data centers can provide middle-mile fiber access to rural communities.
Bringing fiber “past towns and into towns, that’s going to help businesses and schools and libraries and everyone. That’s really great,” said Hunter Newby, an entrepreneur and investor and owner of Newby Ventures, during the Broadband Breakfast event. “Just building big, macro data centers without bringing that local, community, interconnection dimension doesn’t win a lot of favor.”
Regardless of their unceasing appetite for energy, data centers — and the quickly emerging electrified transportation — are a requirement for a society and economy functioning in the modern world; Farney identified a “direction correlation” between a country’s energy consumption and its wealth.
“It’s building a better world. It’s boosting employment. It’s boosting GDP,” she said. “It enables our industrial output and quality of life, and we can’t do any of what we want to do every single day without them.”
