How MTDCs can help address today's data centre power challenges

Data centre operators often take different approaches to network design and platforms. However, every operator, regardless of size, has one thing in common: power, and how to get it and to conserve it.

For the first time in the history of the data centre industry, the ability to deliver power to the right place and at the right price can no longer be guaranteed. In fact, the decision of where to build the data centre is governed as much by these external factors as the operator’s business strategy. Let’s explore three primary factors that can challenge a data centre’s plans when it comes to power and examine the role of multi-tenant data centres (MTDCs) in addressing those challenges.

Power supply constraints

In a 2022 earnings conference call, Andy Power, president and CEO of Digital Realty — the world’s largest MTDC — revealed that a primary electricity provider in northern Virginia had warned customers of a bottleneck in eastern Loudon County that could delay deliveries until 2026. The issue was not reported as a power generation problem but rather a lack of transmission lines to carry the power required.

Sometimes, the forecasted demand for data centre power is enough to prompt governmental action. Following alerts from energy providers, the Office of the Mayor of London (UK) published a briefing paper describing a rapid influx of requests for new electricity connections throughout West London. Most new requests were from data centre operators seeking to co-locate adjacent to fibre-optic cables that pass through the region along London’s M4 corridor, home to many high-tech companies and one of the largest digital tech workforces in the country.

According to the Mayor’s office, “Data centres use large quantities of electricity, the equivalent of towns or small cities, to power servers and ensure resilience in service. The scale of electricity demanded by these data centres has created capacity constraints on both the distribution and transmission networks in the region, absorbing remaining electricity capacity in…(the) West London region for the remainder of the decade…major new applicants to the distribution network, including housing developments, commercial premises and industrial activities, will have to wait several years to receive new electricity connections.”

Politics at hand

Recently, Ireland has become a hotbed for data centre building activity. Their success is something of a double-edged sword. From 2015 to 2022, the power consumed by data centres in the Republic of Ireland (5,200 GWh) increased by 400%, representing nearly 20% of all power generated in the country in 2022.¹ The Irish government must balance its leading position in the global data centre industry with its responsibility to supply energy to its citizens and protect the environment. Politicians from multiple sides within the Irish parliament are therefore exploring what can be done and what part it should play in regulating data centre builds to ensure sustainable, abundant power — including suggestions such as capturing the potential of renewable energy sources like offshore wind and implementing moratoriums that require strategic review before granting approval for and connecting new data centres.²

Figure 1 illustrates the trajectory for data centre power consumption globally, particularly server power consumption — clearly supporting the need for highly efficient data centre designs as a key instrument to keeping federal regulators onside.

Figure 1: Annual global data centre power consumption per end-user category (TWh). Source: Techmonitor.

In Eastern Europe, the political decisions that have led to the current conflict in Ukraine have had a huge impact on the data centre industry in the region. Many Eastern European countries had previously benefitted from their geographic locations at the confluence of the West, Russia and Asia. Those governments are now having to revisit their ‘raison d’etre’ in the digital economy.

Social demography impacts

The third and final external lever affecting power availability and affordability for data centres is a shift in the world’s population centres. With regard to choosing optimal data centre locations, conventional business thinking says go after the low-hanging fruit first. For many years, that meant investing in a select number of markets in the United States and Western Europe. The US — with its large middle class, high disposable income and relatively few high-density metro areas — represented the easiest pickings. It also offered data centre operators the conveniences of a common language, regulatory system, supply chain routes and a history of delivering large-scale CapEx builds.

The European market was a bit more complicated but hardly impregnable. The idea was to start with Tier 1 cities, where power is readily available. The challenge was navigating the different national governments, local business practices and languages. But given that Western Europe is home to a large middle class and a multitude of well-financed international corporations, the reward was worth the effort. However, the cost of land and power in these European cities commands a high premium from data centre builds. Instead of focusing on a few key high-value Tier 1 cities, data centre operators have had to widen the search and settle for Tier 2 locations like Madrid, Marseille, Milan, Zurich, Berlin and Stockholm. This adds more intra-continental complexity with the need to manage operations across four additional countries and power grids, as well as three more languages.

While it is easy to intellectualise the complexities of adding a large data centre to an operator’s existing portfolio, it can be difficult to truly grasp the challenges awaiting hyperscale and cloud providers looking to grow their footprint. Tables 1 and 2 help put the issues in context. Table 1 shows the population and MTDC power available in the world’s seven strongest economies — the G7. In these prime markets, the average MTDC power demand per million people is a whopping 48.7 MW. This is the IT power load required to support a world-class digital economy.

Table 1: Available MTDC power for G7 countries. Source: 451 Research and CommScope.

Table 2 compares the same metrics for some of the fastest-growing markets in Asia, which also happens to be the fastest-growing MTDC region. Even with Singapore and Australia positively skewing the metrics for the region, the average IT load per head of population among those seven countries is less than one-tenth of that of the G7 countries.

Table 2: Available MTDC power in Asia. Source: 451 Research and CommScope.

Based on these and other findings from across the APAC region, it is clear that localised growth in data, population and 5G delivery demand is outpacing growth of data centre capacity. This suggests that aggressive build initiatives—at both the government and private levels—are needed if data centre capacity is to keep pace with the population and demand for more data.

The role of the MTDC

Given the costs and uncertainties inherent in local power supplies, political instabilities and shifting demographics, data centre operators are rethinking their vertical integration strategies and the wisdom of building their own facilities. This is particularly true of organisations in which the data centre is a support function as opposed to the primary revenue generator (think soft-drink manufacturer versus cloud service provider). As a result, more cloud-based and hyperscale operators are opting instead to partner with MTDCs that have existing capacity around the world.

In many ways, this new partner model offers more benefits than challenges. MTDC operators are real estate savvy and are optimised to satisfy tenants’ evolving demands for world-class white space and reliable and affordable power. Perhaps more importantly, MTDC facilities are located in prime metro areas — perfect for cloud-based and hyperscale operators that need to support low-latency and ultralow latency mobile edge compute instances for 5G, Industry 4.0 and IoT applications. Best of all, these facilities already exist, enabling larger data centres to roll out services quickly and easily with a high and faster return on investment. Figure 2 illustrates how the servers, and therefore the whole operation, can be spread across a multitude of locations in an effort to provide edge computing. MTDCs play a part in supporting this rollout.

Figure 2: Server distribution to support edge computing. Source: Nokia, 2023.

To ensure the operations at various MTDCs fit their intended purposes and can be interconnected as needed, a structured base build must be planned at the start of the project; this is especially true when external factors dictate siting the MTDCs across a campus, city or region. Industry standards can provide valuable guidance for designing data centre infrastructure during the base build process, including the North American ANSI/TIA-942 Telecommunications Infrastructure Standard for Data Centers and the European EN-50600 Standard for Information Technology – Data Centre Facilities and Infrastructures.

Efficiency is the key

The three primary factors of power, politics and population growth lead to a few conclusions that need to be considered when building an MTDC.

• Efficient power usage: As much grid energy as possible should be used to power the IT equipment instead of being wasted by inefficient hardware.
• Efficient design: The base build should be flexible enough to be upgraded in support of new customers and data halls (wherever they are located).
• Efficient supply chains: Explore how partners and supply chains can help build data centres in new locations. A holistic global approach to product selection can enable a partner to stage product sets—delivering them using a just-in-time approach to delivery. It can also simplify and speed installation in the field.

References

1. Central Statistics Office of Ireland 2023, Data Centres Metered Electricity Consumption 2022, <<https://www.cso.ie/en/releasesandpublications/ep/p-dcmec/datacentresmeteredelectricityconsumption2022/keyfindings/>>
2. Bray J and Curran I 2023 ‘Cap on data centres ruled out despite surge in energy use’, The Irish Times, 13 June 2023, <<https://www.irishtimes.com/environment/climate-crisis/2023/06/13/coalition-rules-out-cap-on-data-centres-despite-surge-in-energy-use/>>

Top image credit: iStock.com/gorodenkoff