Datacenter developer says power issues holding up new builds
- Reference: 1730205576
- News link: https://www.theregister.co.uk/2024/10/29/datacenter_developer_says_power_issues/
- Source link:
David Sleath, chief executive of Segro, said in an interview with [1]The Times that he would be investing "hundreds of millions and more" in building new bit barns, but for the issues with getting the projects wired up to the national grid.
"The single biggest constraint is access to power," Sleath said. He claimed that this is a perennial problem, but one that is becoming a bigger issue now because it's holding up funding in critical sectors that the current government believes are important to "the UK success story."
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In some cases, Segro's development teams face a wait of "a number of years" for local substations to be upgraded in order to increase grid capacity, Sleath said. The company, which is listed on the [3]London Stock Exchange and Euronext Paris, has a current market capitalization of just over £11 billion ($14.2 billion).
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This isn't a problem in the UK alone, as power shortages were listed as the top concern for datacenter companies across North America, Europe, Latin America and Asia-Pacific, in a [6]report from global commercial real estate firm CBRE published in July.
It found there was increasing difficulty in securing datacenter capacity in all markets, thanks to construction delays and power challenges. These have forced some local governments to take steps such as simplifying permitting and integrating more renewable energy into the grid in an attempt to address power constraints.
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In the US, a [8]recent report from management consultants Bain & Company warned that utility companies have been caught out by the surge in demand from datacenter expansion, as they have previously faced flat or shrinking consumption. Energy use could outstrip supply in just a couple of years unless the companies can quickly turn around and boost capacity.
Much of this datacenter boom is being attributed to the current interest in developing and training AI models, of course, along with an expansion of cloud services through which the hyperscale companies aim to deliver AI services to the market.
The UK government recently recognized the importance of datacenters to the modern digital economy by [9]designating them as critical national infrastructure (CNI), putting these sites on the same footing as water, power grid and emergency services systems.
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As The Register [11]reported at the time , a side effect of this new policy is that these facilities are no longer subject to the same planning restrictions as before, so more of them are likely to get the go-ahead as developers will often be able to override local objections to additional infrastructure being built in a particular area.
Just by chance, Britain's Department for Science, Innovation & Technology (DSIT) confirmed this month that [12]four US tech firms have committed to the UK as a place to invest in their data facilities, saying the move would ensure the country has the necessary infrastructure to train and deploy the next generation of AI technologies.
[13]Energy exec punts datacenter power options out to long term
[14]European datacenter energy consumption set to triple by end of decade
[15]Google Cloud burst by 12-hour power outage in German region
[16]Aspiration to deploy new UK nuclear reactor every year a 'wish', not a plan
But investment could easily be diverted elsewhere if those datacenters face a lengthy delay to get connected to the power network.
According to The Times, the UK National Grid said it was "committed to connecting viable projects to the grid as quickly as possible," while a government spokesperson told them it was working with energy market regulator Ofgem to reform the outdated connections process and speed up delivery of new infrastructure, including substations.
Not everyone would be pleased by datacenter expansion, in any case. It has been claimed that they do not bring much benefit such as jobs to the local area, and they are also likely increasing greenhouse gas emissions.
A recent report claimed that the industry is set to emit 2.5 billion tonnes of emissions worldwide between now and the end of the decade, [17]three times more than if generative AI had not been developed. ®
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[1] https://www.thetimes.com/article/data-centre-investment-held-up-by-electricity-supply-9l6jzqkxf
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZyEUuCqfLBQIO550D__p6gAAAQw&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.londonstockexchange.com/stock/SGRO/segro-plc/company-page
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZyEUuCqfLBQIO550D__p6gAAAQw&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZyEUuCqfLBQIO550D__p6gAAAQw&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2024/07/04/datacenter_demand_driven_by_ai/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZyEUuCqfLBQIO550D__p6gAAAQw&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2024/10/11/energy_companies_ai_dcs_consultant_report/
[9] https://www.theregister.com/2024/09/12/uk_datacenters_cni/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZyEUuCqfLBQIO550D__p6gAAAQw&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[11] https://www.theregister.com/2024/09/17/objections_to_datacenter_builds_cni/
[12] https://www.theregister.com/2024/10/15/uk_datacenter_investment/
[13] https://www.theregister.com/2024/10/25/schneider_exec_dc_power/
[14] https://www.theregister.com/2024/10/25/eu_dc_power/
[15] https://www.theregister.com/2024/10/25/google_cloud_frankfurt_outage/
[16] https://www.theregister.com/2023/08/01/aspiration_to_deploy_new_uk/
[17] https://www.theregister.com/2024/09/06/datacenters_set_to_emit_3x/
[18] https://whitepapers.theregister.com/
No, it's a ploy to allow developers to use two or more servers for a Hello World! program. Using just one server is so yesterday's tech these days.
Hmm
Developers and data-centres both coming to realise resources aren't infinite? There's hope yet.
Where there's hope, there's opportunity, surely?
David Sleath, chief executive of Segro, said in an interview with The Times that he would be investing "hundreds of millions and more" in building new bit barns, but for the issues with getting the projects wired up to the national grid
Hmm.. so something is holding up hundreds of millions of investment because of some scarcity. Perhaps... Maybe, just maybe Segro could, I dunno, diversify and exploit that scarcity by building co-powered datacentres! Revenues from both building bit barns and powering them! Win-win.. no? Unless there's something that would make that investment a bit bubble shaped I guess.
The problem's not power supply, it's the datacentres
Lovely inversion of the problem. "We'd be building facilities that would suck in gigawatts of power if only you'd supply it to us".
Our grid works really well for "normal" loads, including running an increasing number of cars (well over a million now). What it's not so great for is supporting the AI grift where datacentres come at 400MVA a time (https://www.theregister.com/2024/09/13/hyperscale_customer_to_take_massive/) - say the equivalent of a Coventry or Leicester wanting to plug in just-like-that.
My organisation has their own small-scale bit-barn. They want another megawatt (Maybe two) from the grid to power all those shiny new GPGPUs but the grid have said a big fat "No". They've also been told there's no more water for cooling either.
I hope the AI/LLM hype-bubble bursts soon.
Why do I get the feeling that attempting to satisfy the demands of bit-barn operators by adding supply infrastructure will be about as effective as solving traffic congestion by building more roads has proved to be…
Yup, we shouldn't have turnpiked all those roads in the first place. The canals were good enough to start the industrial revolution. Having the parish turn out labourers every so often to pound a few cart-loads of stone into the ruts was quite adequate.
What the experts are saying…
“Who needs the power company? Hand me the end of that electrical cable, porcupine.”
-Moe Howard
"But investment could easily be diverted elsewhere if those datacenters face a lengthy delay to get connected to the power network."
Fine. Go elsewhere. As you point out later in the article, the number of jobs created by these data centres is negligible.
Hang on a minute lads, I've got a great idea
Given all the nimbyism about pylons through Norfolk/Suffolk/Essex etc, why don't they build the datacentres on the coast where the powerlines come in from the wind farms?
There has always been limited power in the UK for data centre builds, Digital Reality Meridian Gate on Marsh Wall even when it was owned by Telecity had limited power, was one of the main reasons a number of customers moved out.
New builds have been limited for some time by available power. One reason the Slough estate with Equinix and others has its own power station.
They ought to build in France were they have excess nuclear power, or maybe in the Nordic countries, good power from natural sources.
Developers and data-centres both coming to realise resources aren't infinite? There's hope yet.