“We know that to move forward, standing still is not an option,” Rees Westley, RLB Partner, says. Decisions involving energy and operations should be made cautiously, consciously and progressively to ease the burden of future challenges.
Energy is the lifeblood of the global economy. From heating our homes to powering our factories, everything we do depends on a reliable flow of affordable energy. Yet, as those working in the data centre industry, or the built environment, can attest, we are facing a looming energy challenge of distribution infrastructure and power availability.
Recent research conducted by RLB underscores this, revealing that 70% of the respondents foresee supply chain shortages and disruptions curtailing digitalisation in Europe in the next five years.
In response to this challenge, we’ve witnessed a notable shift with companies previously focused on other sectors now expanding their offerings to include the development of data centre space, maximising the lucrative formula of land and power. Where land and location have historically driven growth, we’re witnessing a proliferation of secondary hotspots for data centre expansion. In our research, 42% of respondents indicated a preference for ‘new and alternative’ destinations as a result of supply chain constraints, with Italy (65%), Germany (58%) and France (54%) as the most likely destinations.
Goldrush era for energy
With the land availability somewhat addressed in the short term, we are now entering the gold rush era for energy with those able to attain it ahead in the race for acceleration. As we embark on this new chapter in data centre provision, what are the considerations for developers, operators and stakeholders when it comes to energy and what may be the future for the energy dilemma?
Governance
The decarbonisation and decentralisation of energy networks across the UK and Europe has already begun. The UK energy regulator over the years has been at the forefront of driving deregulation to ensure a sustainable and competitive marketplace – which the industry has embraced – making the UK one of the most competitive and agile energy markets in the modern world.
An unprecedented period of growth in the technical and digital markets combined with a shift away from fossil fuel-derived energy has seen an exponential demand for electricity resources. There is currently in excess of 700GW of electricity applications in the UK’s National Grid pipeline against a national average of ~ 62MW peak demand, and with the current planning and access to grid infrastructure, this is significantly slow in reaching the system.
The new Labour government’s removal of the ‘de facto ban’ on onshore wind that places it on the same footing as other energy developments in the National Planning Policy Framework (NPPF) will slightly ease some pressure. But we still find ourselves in an undersupply/over-demand position which has reduced developers’ options for connecting to licenced national electrical networks, creating secondary challenges in advancing development across real estate sectors.
To avoid protracted lead times in the securing of capacity on projects, developers across UK and European markets will need to adapt and evolve their approach to development and power provision. This approach will likely see a greater reliance on decentralised energy strategies and include investment into self-sustaining power generation and energy storage.
National Grid levels
Traditionally, data centres have drawn power from lower levels of the National Grid, competing against other energy-high demands including residential and commercial usage. As demand grows, exploring options to tap into higher grid levels will become imperative.
Data centres and technical hubs have come into increased scrutiny in recent years over the exponential strain that they are putting on the national electricity networks. This has included claims that digital and technical development has started to impact commercial and domestic development.
Distribution Network Operators (DNOs) and Distribution System Operators (DSOs) typically supply the electricity required for commercial and residential development. Usually at voltages from ~100kV down to low voltage (LV) levels, the early development of data centres and technical hubs typically required connections into secondary substations and domestic medium voltage networks.
When an application for power is made this will typically be offered from a surplus on the network or will trigger a requirement for reinforcement measures. This type of reinforcement can occur locally to a site or all the way back to a Grid Supply Point, which can often culminate in extensive expansion of a distribution network. In the instance of a data centre development, these works may provide capacity for a single facility whilst congesting the distribution network and preventing other developers from accessing the system.
As data centres and technical hubs have grown in capacity, and with the advancement of technologies like AI, so has the power infrastructure required to support the developments – and we are now typically seeing connections from the distribution system at medium voltage (MV) and high voltage (HV). This is again causing development congestion on the distribution networks but at much higher voltages. Taking connections at the higher distribution levels and from the transmission network will be much more conducive to supporting residential and smaller commercial development it will also alleviate development congestion on the secondary electrical networks.
Sustainability measures
The UK’s commitment to energy security, as outlined by the British energy security strategy introduced in 2020, looked to make the UK ‘energy independent’ moving its reliance from fossil fuels to alternative energy supplies such as wind, solar and nuclear. This has been echoed by the new Labour government with a commitment to double onshore wind, triple solar power and quadruple offshore wind, ensuring clean power by 2030. With over 60 elections globally, we know that sustainability will remain a top priority for any government in power.
Therefore, industry stakeholders must look ahead to ensure that sustainable energy sources such as wind and nuclear are not only reliable but also accelerated in their deployment. This might involve initiatives like enhancing wind power reliability and expediting the adoption of nuclear small modular reactors.
Data centre developers and operators need to be far more accountable for the impact that they are having on both communities and the environment. Decentralised energy systems have been described as being pivotal to ensuring a robust, secure and sustainable energy future.
Regulation and self-regulation (mandated targets) are required to ensure accountability. Developers should be investing in decentralised energy systems, offsetting pure demand requirements and providing solutions for a fair and more sustainable future. Investment into sustainably generated power projects must align with the development of demand facilities.
In conclusion
With operators expected to commission 65% more data centre capacity in 2024, the race to secure energy will gather pace. Understanding how we source the energy required for this growth, work within governance and meet sustainability targets will be key to success and allow us to advance at the pace required for modern-day requirements.
Read the article in Intelligence Data Centres
FURTHER INFORMATION:
