Power to the Data Center: Challenges and Solutions

The New Dynamic

It’s no longer a matter of simply building a data center facility. Developers must consider the source of power generation and the infrastructure to support it. Sustainability objectives are driving solar farm construction, but renewables alone can’t meet data center availability requirements. Independent power producers and utilities are stepping in to close the gap by bringing transmission lines to the data center.

This approach has several benefits. Data center developers can site their facilities virtually anywhere rather than near a source of power. Combining renewables with grid power also provides the redundancy needed for five 9s availability.

However, developers face increased lead times, costs and risks. Real estate must be acquired for transmission lines and solar farms. Transmission lines also need easements and rights of way. With so many data centers under construction, labor and materials are severely constrained. The lead times for some products are measured in years.

Long Timelines, Increased Complexity

As a result, it can take five or six years from land acquisition for power access or a solar farm to the point when transformers are ready to deliver power to the data center. Add another year and a half to construct, build out and commission the data center facility. That’s seven years or more before the developer can begin seeing a return on investment.

Any misstep can derail the project. Products must be available in the right place at the right time to avoid delays. Developers backed by venture capital can buy products in advance, but the products must then be stored and secured.

Tax incentives further complicate the process. Federal programs provide tax incentives of up to 30 percent for qualifying projects, and state programs may provide income, property, and sales tax incentives. However, understanding the requirements can be difficult, and the deadlines for these programs seldom align with project timelines.

Wesco’s Grid Services

By partnering with our customers, Wesco’s grid services team utilizes our broad experience to provide both innovative and effective grid services and solutions. From project planning to estimating, procurement and sourcing, material packages, remote asset management, project management, and a wide array of customizable project services, we can help you improve labor efficiency while driving sustainable cost savings.

With Wesco, you gain a partner that delivers the best solution, customized for each unique project. From design development to project completion and close-out, we are dedicated to being a valuable resource to our customers in all phases of a project. Using our collective knowledge and expertise means we can deliver seamless project execution, with on-time and on-budget results.

Conclusion

Bringing power to the data center presents many challenges and comes with a significant amount of risk. Wesco helps reduce that risk, accelerate project timelines, and ensure a successful outcome.

¹McKinsey & Company: Investing in the Rising Data Center Economy, 2023