The Data Center Frontier Executive Roundtable features insights from industry executives with lengthy experience in the data center industry. Here’s a look at the insights from Drew Thompson, Associate VP, Commercial, Connectivity and Industrial Group, Black & Veatch.
Drew Thompson is an Associate Vice President in the Commercial, Connectivity and Industrial group at Black & Veatch, where he helps clients address the sustainability, reliability, resilience, and environmental impacts of critical infrastructure assets. With over 30 years of industry experience, he focuses on sustainable buildings and infrastructure, renewable generation, zero-emission transportation infrastructure, and commercial water management.
Some of Drew’s recent technology projects include: quick delivery data center modular data centers, global data center site due diligence and site design, and data center infrastructure upgrades (substations and water recycling); crypto-mining conceptual facility design for connection to utility scale renewable power generation; hydrogen storage in a solid state; the Missouri Hyperloop feasibility study, facility modifications to convert a diesel bus fleet to electric bus fleet; the facility strategy for 100 AV/EV (autonomous/electric vehicle) fleet requirements; a NASA study of EV infrastructure requirements for future transportation with eVTOL (electric vertical take-off and landing); and design development for an indoor agriculture facility, as well as hyperscale data center buildings globally, and sustainable infrastructure for the data center projects.
Here's the full text of Drew Thompson's insights from our Executive Roundtable:
Data Center Frontier: After this landmark year of unprecedented anticipation for artificial intelligence and machine learning (AI/ML) technologies amid escalating requirements in the traditional cloud, the data center sector is poised to experience even greater urgency of demand. As we proceed into a widely forecasted “new twenty-year cycle" of growth, what will be the most key factors for enabling the industry’s ability to meet such demand next year and beyond? What persistent challenges stand most to inhibit this ability?
Drew Thompson, Black & Veatch: Today, technological advancements and unforeseen developments like AI/ML have become much more than influencing factors; these advances are rewriting the specs of the industry. As a result, AI has had a significant impact on the trajectory for data centers, their development and their operations.
For example:
• AI’s computational requirements and processing needs have moved the average 20-100 MW of power consumed by a new data center to what is becoming a more common 500 MW data center.
• This spec has shifted demand for an enterprise data center to a new standard HPC (High Performance Computing) data center and changed the development protocols for location, powering the sites, and building access within communities.
• The need for specialized hardware has taken us from CPUs to GPUs and TCUs high density racks running at +/- 200kw per rack . While this is changing the schematics for both the data center and it’s infrastructure on campus, utilities are struggling to meet demand within their chartered purpose. Privatization of the grid is one area we see growing quickly.
• Liquid cooling solutions and other technologies to manage heat generated by the chips/racks is rapidly evolving and changing the infrastructure needed to support these data centers.
• Managing associated heat and power requirements is a crucial consideration
• The most prohibitive challenges facing data center owners and operators today are quite possibly Regulatory Compliance and Security. Cybersecurity, physical security, industry specific regulations, all offer protection to highly sensitive data and insights. Regulatory Compliance makes it feasible to build an equitable platform for data use and computation that serves the many, not just the few.
Meeting these demands raises creative challenges for the best minds in the business. AHJs [agencies having jurisdiction] are struggling to support public policies that expand and protect businesses they serve.
New designs and sites that respond to community and market, with the ability to manufacture the equipment needed, the willingness to be responsive to Scopes 1, 2, and 3 in a sustainable environment, and the ability to do more with less, are nuanced factors influencing data center development across the globe.
There is little doubt ingenuity and discovery will prevail in the challenges posed by new technology.
Data Center Frontier: Especially in dense urban markets facing slim availability of critical land and power stakes, "adaptive reuse" of vacant office, retail and other commercial real estate properties for data center design and construction development remains a gathering trend in North America. For investors and providers thinking of adapting a site for reuse as data centers, what makes a particular property a better or worse candidate? And what are the relative considerations for brownfield vs. retrofit development in such cases?
Drew Thompson, Black & Veatch:
• Existing buildings that have high structural loading capacities are more attractive for retrofit, as upgrading the structure may be the largest cost and schedule hurdle to adaptive reuse. This is especially true in high density urban areas where the data center would be multiple floors.
• Access to sufficient electrical grid power for current and future expansion of data centers continues to limit expansion, making existing properties with agreements for large power capacity (ideally greater than 50 MW) very attractive top data center developers.
• Between the electrical power consumed by the computer systems, as well as the supporting infrastructure such as cooling, power costs are a significant operating expense and locations with lower utility costs are more attractive to data center developers.
• HVAC systems and backup generators are crucial to reliable operations of data centers, but contribute significantly to external noise levels. Sites with minimal acoustic requirements are more desirable to data center developers.
• Data centers are expensive, making sites with economic incentives more desirable. This could be in the form of tax exemptions from electricity consumption of data center equipment and tax credits for hiring workers.
• Zoning and permitting can be significant barriers to data center development, making locations with permitting and planning pre-approved for data center attractive.
Data Center Frontier: The range of available and proposed technologies to remediate looming need for sustainable onsite energy generation at large data center campuses ranges from still barely-within-reach SMR and green hydrogen speculation, to possibly more readily feasible and pragmatic means including renewable microgrids, clean fuel cells, and more efficient generator and battery practices and technologies. Which onsite power generation solutions present the best outlook for investors, developers and providers seeking to balance short- and long-term ROI considerations with the industry’s clear and present drive toward sustainability?
Drew Thompson, Black & Veatch:
• Data center operators are planning to rely on a combination of on-site power solutions to meet their needs in the future including classic renewables, nuclear and hydrogen power at scale. Properly designed microgrids will allow data centers to draw upon several sources of power based upon availability and financial benefits to provide for the Gigawatt-scale sites being planned.
• 7x24x365 facilities are utilizing temporary on-site natural gas generators to overcome shortfalls in utility capacity and to provide for bridging power. They are planning to convert them to backup power generators or to future-proof them with combined cycle generation, carbon capture or hydrogen fuels capabilities for the long term.
• Several SMR [Small Modular Reactor] technologies have recently progressed their licensing applications with the Nuclear Regulatory Commission, offering new hope that dedicated Nuclear Power will become a reality in the next three or four years. Older and proven reactor technologies, such as Gen III boiling water and pressurized water reactors, will likely meet the least resistance to “on-site” licensing. The newer Gen IV reactors may take longer to be licensed, although they will likely be more efficient and better suited for SMR applications when ready. We expect it will take a decade or more before “on-site” SMR’s can generally be made available to data center campuses, due to prevailing public opinion and that only a few of the SMR technologies currently being developed will survive the regulatory and public review scrutiny. Until then, utility PPA agreements and behind-the-meter power currently available at some existing nuclear facilities remain the only viable option for nuclear power in the short term. And even then, moving the data center to those few successfully licensed SMR locations should prove to be the preferred solution to achieving “on-site” nuclear power for some time.
Data Center Frontier: For providers of equipment to the North American data center industry looking to bring supply chains for critical infrastructure closer to their customers, what are the main opportunities going into 2024, geographical and otherwise, for an expansion of U.S. manufacturing capabilities?
Drew Thompson, Black & Veatch:
• International equipment providers are developing dedicated manufacturing and distribution facilities near high demand data center communities, and in some cases for specific data center operators.
• Global design and construction firms are working with systems integrators and distribution companies to develop improved template designs that better support early procurement programs.
• Realizing the need for onshore manufacturing was a major outcome of the pandemic. To alleviate the U.S. reliance on overseas equipment supply, the CHIPS Act, Inflation Reduction Act, and many state legislations were passed to incentivize and facilitate the construction of certain manufacturing facilities in the US. Additionally, many manufacturers are moving their operations to Mexico to be closer to the end customer. The anticipated outcome is a higher supply of equipment and equipment subcomponents readily available in the U.S.
• New manufacturing facilities in North America have the opportunity to leapfrog the development of overseas facilities by anticipating the needs of our post-pandemic society. One trend in modern construction has been modular fabrication. The benefits of modular construction are being realized as a solution to historical construction concerns, including safety, sustainability, and field staffing shortages. Combining new fabrication methods with modular construction is an opportunity for equipment suppliers in the modern construction industry.
