How do you think power grid constraints will impact the growth of the data center sector? Do you foresee impacts on facility sizes or site selection?
BARRY H. EPSTEIN, ENVIRONMENTAL PARTNER
“Many of the companies with the greatest growth of data center needs also are leaders in achieving 'net zero' (or negative) carbon emission goals in the very near future. Yet grid constraints are affecting the ability to deliver renewable energy through congested segments of the grid to such high-load end users. As a result, large electricity-consuming facilities, such as data centers, may seek co-location with, or location in proximity to, renewable power generation sources to avoid grid congestion issues.”
GARY S. MCKITTERICK, REAL ESTATE PARTNER
“The availability of reliable, stable power and power redundancy are critical to data center site selection. AI demand and use has triggered a material increase in power demands. Several energy experts are predicting the increased computing power needed for AI will result in the electricity currently consumed in data centers to double by 2030. A major challenge in the industry, and a constraint to growth, is production of cost-efficient reliable energy.”
ALYKHAN SHIVJI, REAL ESTATE PARTNER
“Facilities will get larger and sites outside of traditional hubs, with more latency challenges, will nonetheless become more viable. Alternative power sources like natural gas and nuclear are already becoming more prevalent in the data center industry but they require scale for it to be worthwhile to build a micro grid or deploy a small modular reactor. The facilities used to train generative AI and LLMs have the largest power demands and don’t need the same level of proximity to end users that has been critical to the development of data center markets across the country.”
