Navigating the Data Centre Building Boom: Opportunities and Challenges Ahead

The growing reliance on AI technology is creating a surge in the need for new data centres across the USA, Europe, and Asia Pacific, which is expected to drive construction growth in 2024 and 2025. However, the increasing regulations in many countries regarding the environmental impact of data centres are leading to rapid changes in their locations, designs, and power sources.

The amount of data being generated globally is staggering. In 2023 alone, an estimated 129 trillion gigabytes of data were created, and this amount is projected to double over the next two years. This includes everything from uploaded videos and social media posts to the trading of cryptocurrencies. The sheer volume of data being produced is unprecedented and continues to grow at an exponential rate.

The exponential increase in data volume is driving a significant need for data centres such as London North. These data centres face considerable power requirements exacerbated by the need for chillers to efficiently manage the substantial heat generated by energy-intensive server racks, ensuring that the hardware remains operational and doesn’t degrade.

The increasing dependence of businesses and consumers on advanced language models like Chat GPT and other AI tools, which need extensive training to improve their algorithms, is expected to lead to a significant surge in demand for these technologies.

The demand for data centres in the United States is experiencing rapid growth as companies race to meet the needs of the artificial intelligence (AI) industry. This surge in demand is expected to result in significant increases in overall capacity, rack density, and energy usage. In response, many data centre providers are looking beyond traditional, densely populated cloud markets and expanding into more remote areas where land and power resources are more readily available. This strategic expansion is driven by the anticipation of future AI deployments.

In some countries, the demand is rapidly increasing and becoming a problem. In Ireland, which currently hosts 82 data centres, state-owned utility company Eirgrif says that data centres now use as much electricity as the country’s entire domestic housing stock. To allay concerns about the capacity of its grid, the company has said it will not connect them up until 2028.

Although data centre buildings are unlikely to undergo significant changes in the future, with most remaining constructed on-site using steel slabs, there is a growing trend among data centre developments to secure their own dedicated power sources.

Last year, Google entered into a 150MW power purchase agreement with Danish energy giant Ørsted, committing to purchase power from its Helena Wind Farm in Texas for the next 15 years. This move is part of a growing trend, with other companies also stepping up. For instance, US-based Equinix secured seven windpower offtake agreements in February, with German renewables developer WPD, for the construction of wind farms in France.

To meet this escalating demand, data centres will need to shift away from traditional grid operations. However, the question of what will take its place is a complex one to answer.