On Sept. 18, NAIOP hosted a sold out breakfast at The Orleans on the topic of Data Centers & Utilities – The Path Forward. Panelists were:
- Steve Boyce, VP Mission Critical, Novva Data Centers;
- Jeff Brigger, director of business development & major accounts, NV Energy;
- Colby Pellegrino, deputy GM for resources, Southern Nevada Water Authority;
- Steven Roberts, VP construction development, Switch, and
- Moderator Brent Nasset, site development consultant, Kimley-Horn & Associates.
The discussion began with Nasset describing the outsized impact of data center investment at a national level, going so far as to say without growth in the data center market, the national economy would dip into negative territory. In Nevada, as in the rest of the country, data centers have seen exponential growth. This growth is not without its challenges however, as data centers require up to 100 times more energy investment than a traditional building project.
Why Nevada?
Roberts described some of the high-level benefits of bringing data centers to Southern Nevada, which include: great soils, a reliable grid, low latency, a tax friendly business environment, and close proximity to customers in California. Boyce also highlighted some of the more notable constraints with data center development, namely heat, water and power supply. Boyce also explained that Nevada has plenty of land, but it needs to be unlocked from the Bureau of Land Management.
Trends in Data Center Development: More Energy Consumption, Flexibility
Responding to both the market demand combined with technological and supply-side constraints in data center development, Boyce and Roberts identified a highly flexible mindset they use while bringing new spaces to market. Boyce described how his team often changes substantial portions of the project while under development, and how “you guys in the room hate it,” but that is what it takes.
Both developers use closed loop water systems and air-cooled technology to minimize their consumption of water, but those come with a higher power load requirement. Both identified significant density increases in racks, saying a rack used to consume 15kW, now a rack could consume 150kW or even up to 2MW/cabinet. They are both innovating rapidly to meet market demand.
Projected Gap: Demand is Outpacing Supply of Power
Brigger noted that the requests for power supply are growing. NV Energy is a fully integrated utility, which includes generation, transmission and distribution systems across the Silver State. Currently, the entire system sits at about 9KMW (peak). Brigger noted that another 4.5 – 5KMW have already been signed and power committed to those projects. Astoundingly, another 21 – 22KMW of requested load has been identified. Accordingly, NV Energy needs to double or triple the size of the current system to meet projected demand.
Brigger said the utility has been planning for increased power needs for some time. One of the most notable transmission projects, Green Link, is set to deliver the first phase of new lines next year, with additional phases to the west and north currently going through permitting and siting.
The panel briefly touched on the concepts of nuclear power generation and self-generated power or micro-grid technology as a potential solution to supplying more power. Brigger described the nuclear power generation technology as at least eight years away from being a real option. Roberts agreed, adding that a micro-grid was not what their customers are looking for: they want the reliability of a utility-scale grid. Boyce has one project in Utah that includes self-generation, but he also pointed out that was a unique circumstance.
Water Supply is Thoughtful, Measured
Pellegrino also identified long-range planning efforts that are paying off for the region. Already a national leader in water reclamation, reuse and recycling, Southern Nevada Water Authority is responsible for maintaining levels of water service to existing residents and businesses while providing for the area’s growth. She credited a highly concerted effort to providing a level of consistency across municipalities in water regulation.
Pellegrino noted that while Nevada only has rights to 1.8% of the Colorado River allocations, the federal government may cut that by more than a third, which is why ongoing negotiations over water rights are so crucial to the state. When asked about the potential for desalination plants in California that could be piped into Nevada to supply more water, Pellegrino replied that the cost required to do that would be astronomical. An alternate to desalination that is being considered is reclaiming and recycling water that is currently being piped into the Pacific Ocean from Southern California and piped into Nevada for use here.
Data Centers Will Go Where Power is Available
The outlook on future data center development in Clark County is bright, with optimism clearly running through the discussion. Power supply will be the leading constraint in new data center development but thankfully there are very smart people who have been planning for this for a long time already.
