Data center development is simultaneously growing by leaps and bounds as well as suffering from its own success. The easy-to-develop sites have been snapped up and demand for additional data and cloud services continues to grow, forcing developers to look beyond the obvious locations for sites. This can entail running into less-than-obvious delays in the development process.
Data centers reliably store and transmit the deluge of information that makes modern life possible. The factors driving the need for data centers — enterprise demand for cloud services, dependence on 5G cell networks, artificial intelligence technology, edge computing capabilities, social media use and streaming needs — will continue to grow exponentially in the coming years.
According to a September 2022 report by advisory company Arizton, approximately 2,825 megawatts of power capacity will be added to the data center market in the next five years. The same report forecasts the U.S. data center construction market will reach $25 billion by 2027, up from $20 billion in 2021.
Data centers are utility-intensive property types, and the sites that can support their formidable power, communication and water needs often require high-level considerations right from the start.
How can the development process for such projects be streamlined when conventional locations for these facilities are growing scarce? Solutions require in-depth knowledge of the challenges data centers face plus insight into creative solutions, according to Megan Baird, an associate, and Keith Simpson, director of engineering, with Bohler, a land development consulting and technical design firm. Both are professional engineers (P.E.s) with extensive experience in the new realities of data center development.
Challenges for Developing Data Centers
Fitting in with the Community, Avoiding Pushback
“Data centers make good neighbors,” Simpson explains. They generate almost no traffic and do not draw on the town’s resources such as police, fire departments and schools the way other property types do. However, misconceptions about data centers often center on their size, their appearance and their perceived potential to create noise and traffic.
The conventional arguments against data centers are relatively simple to refute, Simpson explains. Noise can be mitigated by keeping sound on-site with natural or man-made buffers. A wide variety of options can be employed to make these facilities more visually appealing, including “Avoiding the ‘gray box’ model. Artificial windows, changes in front elevation and better color combinations mean that these data centers can have character and fit more harmoniously within the surrounding community.”
Still, it is important to address these concerns right from the start with key stakeholders and the community, especially as certain facilities are moving closer to residential areas.
Edge data centers are smaller facilities that require less power, have a smaller footprint and can help users avoid latency issues. The need for these facilities in more and more suburban settings provides opportunities to reassure communities and get them on board with data centers, minimizing the risk of objection or delay during public hearings.
As always with data centers, power is the limiting factor. The size of the buildings and the increase in computing power per rack typically requires additional substations on site to provide the large amounts of energy needed to run such a facility. Although adding electrical support infrastructure is often necessary, locating and building these structures can be challenging in terms of materials logistics, where to physically place them and the time associated with permitting for the transmission lines, and then designing and building the substation.
Impacts for Data Center Developers
Being tactical about land planning and site selection can forestall a host of difficulties, says Baird. She explains that everything — from buildings to equipment to utilities to grading to stormwater — can be implemented more efficiently with the right planning and the right due diligence.
“By spending more time upfront in the planning and strategy phase, you could delay your start,” Baird explains. “But delaying a start might mean getting permits faster and ensuring you’ve got agencies on board.” Streamlining processes that involve the Army Corps of Engineers and environmental permitting agencies can save time down the road — particularly with strategic construction phasing. “Time is money,” adds Simpson. “Any time we can shorten the construction timeline is a great opportunity to save cost, too.”
“There’s a common industry understanding that there are no easy sites left,’” says Simpson. “Consequently, any site selected will need careful vetting. Early in the development process, it’s essential to consider floodplains, resource protection areas, endangered species habitats, environmentally sensitive locations and more. With properties like data centers, developers must account for anything out of the ordinary in the sites that are available. With these sorts of considerations, the usable area in any site might be much less than what you originally anticipated.”
Simpson also explains that it’s important to get entitlements and zoning in place even before moving on to a site plan for construction approval. Due diligence in concert with a strategic plan can help avoid expanding timelines. It may also be best to avoid environmentally sensitive areas entirely if possible.
Working with local data center experts like the Bohler teams can also save time and confusion. “It’s key to work with someone who’s both a local expert and current on regulations. This way, a developer can pivot quickly and implement different timelines. You may want to take some steps concurrently to save time or make up for lost time. Making sure you have the right team involved to advise you is essential.”