Future outlook
The search for power reshapes the market
It is well known that data centres are power-hungry.
The rapidly expanding market is placing ever greater pressure on electricity grids across the globe, and at the same time shining an increasingly bright spotlight on the large carbon footprints of these essential assets. This challenge of becoming carbon neutral is difficult to solve. While the industry is conscious that data centres need to become more sustainable, it is less confident that this can be achieved in the near future. Three-quarters of those we surveyed believe the sector will not achieve carbon neutrality by 2030. A critical path to decarbonising data centres relies on the wider investment in national grids as they switch to renewable sources of energy generation. However, the investment needed to upgrade and reorientate grid capacity – while keeping the lights on for customers through carefully managed ‘outage programmes’ – is creating backlogs for new connections. 80 percent of those we surveyed said delays or challenges in securing power to sites have had a severe impact on data centre delivery.
of those we surveyed said delays or challenges in securing power to sites have had a severe impact on data centre delivery.
now deem access to power availability is more important than location of the data centre itself.
These delays or challenges are leading to a new shift in priorities for the industry. Delivering data centres on time is thought by 82 percent of survey respondents to be more important than the cost of that delivery. Linked to this, an incredible 92 percent now deem access to power availability is more important than location of the data centre itself. As demands on national grids increase, we may well see this prioritisation of power gain greater prominence – especially alongside the expansion of hyperscale data centre markets designed to support AI development. Early engagement with grid operators, can identify constraints early on.
“Power availability and capacity will continue to challenge developers and operators in 2024 and beyond. As demand accelerates for new data centre developments across the region, reducing their environmental impact is one of the biggest challenges the industry faces, with pressures from customers, investors and regulators to deliver sustainable solutions.”
Simon Kearney, Data Centre Lead, Australia & New Zealand
New horizons for investment
The need for access to power reinforces the changes in costs seen in our data this year for emerging markets.
With power constraints compounding existing challenges in established locations, clients are increasingly exploring new regions for investment. With fewer large-scale competitors for power resources, data centres in less competitive locations are likely to find themselves further ahead in the energy connection queue. Delivery costs in emerging markets will be elevated because of the ongoing need to mobilise skilled resources from overseas to manage the projects, driving up the overall labour costs. Further investments in local skills and resources continue to be required. Overall, the resilience and adaptability of the data centre sector is seen across the board, forging new paths where old ones are becoming blocked. However, fresh thinking will be needed to make sure that old challenges – around skills, supply chains and power – do not simply follow the industry on its journey into new markets.
Which technology do you anticipate becoming the most prominent for DC power generation in the future?
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