By: Brian Meeley

Along with the expected dominance of the wide-ranging impacts of AI at this year’s ITW 2024, much of the hum centered around another closely linked issue: power. Access to available power infrastructure, let alone abundant clean energy sources, is the biggest limiting factor on digital infrastructure expansion in top-tier markets.

Global commercial real estate and investment management company JLL expects to see a ‘bring the data center to the power’ rather than a ‘bring power to the data center’ approach for AI training facilities. The reality is both more varied and more complicated.

datacenterHawk’s Steve Sasse presided over an expert panel exploring these issues and contrasting the US and Latin American markets. Josh Snowhorn, CEO of Quantum Loophole, described key focus areas for their master-planned campus in Maryland. Ricardo Alario, CEO of ODATA and Alessandro Lombardi, Chairman of ELEA Digital offered contrasting views from Brazil and across LATAM.

The session, featuring insights from various experts, underscored the complexity of managing power needs for large-scale data centers, particularly in diverse geographical and regulatory landscapes.

The Scale and Complexity of Power Procurement

QL ITWOne of the most pressing issues discussed was the sheer scale of power requirements for modern data centers. Josh Snowhorn detailed Quantum Loophole’s development of a 2,100-acre campus with up to 3 gigawatts of power capacity. This site, a former Alcoa aluminum smelter, already had substantial transmission infrastructure, making it the largest single site for industrial power in North America. However, this comes with unique challenges, such as upgrading 200+ mile transmission lines to support this massive power draw.

“So, our issues are really about getting transmission lines in, upgrades to those lines, all the way down the line,” said Snowhorn. “And then, what kind of power sources can actually feed us ultimately.”

In the U.S., the demand for data center power is growing exponentially. In 2023 alone, there was a 4-gigawatt absorption, with 1.7 gigawatts in Q1 2024. The Dallas area, for instance, has seen requests totaling 24 gigawatts—equivalent to the output of 24 nuclear reactors. Such figures illustrate the immense pressure on existing power infrastructure and the need for substantial upgrades and new construction to meet this demand.

Challenges in Latin America

QL ITWBrazil is interesting because they actually have a glut of clean energy and a grid – in certain areas – with more than enough capacity. ODATA, for example, are seeing early signs of interest in building AI training clusters where the power is.

“So yes, that is starting,” observed CEO Ricardo Alario. “But it’s not necessarily to serve cloud services in these countries. It is to actually serve a global demand of machine learning, training, that sort of thing. So, it’s not there yet. But we’ve definitely seen a lot of interest.”

He went on to point out that, in LATAM, Brazil goes to the top of that AI training cluster list, because of a lot of capacity in a grid that is extremely sustainable.

The discussion also covered the challenges faced in Latin America, where understanding local markets and regulations is paramount. Ricardo highlighted that building data centers in regions like Mexico City and Brazil requires deep local knowledge and adaptation to specific regulatory and supply conditions. For instance, the generator supply in Chile is limited by its 50 Hz power grid, necessitating specific procurement strategies.

In Mexico, the centralization of the electrical industry under government control presents its own set of hurdles. The Comisión Federal de Electricidad (CFE) handles generation, transmission, and distribution, but investment limitations have led to significant power shortages, exacerbated by the influx of manufacturing and nearshoring activities.

Community Engagement and Environmental Considerations

The session underscored the importance of community engagement and environmental sustainability in data center development. Quantum Loophole faced opposition from local communities with deep historical ties to the land, such as farmers in regions settled since the 1600s. Overcoming this required extensive outreach, hiring local workers, and investing in environmental projects like creating a natural carbon sink by planting over a million trees on a donated 600-acre eco-reserve.

Local Adaptation and Supplier Challenges

The need for local adaptation was a recurrent theme. Building data centers in international markets demands a nuanced approach to dealing with local suppliers, adhering to regulations, and community expectations. For example, global generator suppliers may not cater to the specific needs of every country, necessitating local sourcing and adaptation.

The Future: Scalability and Technological Adaptation

Looking forward, scalability and flexibility in data center design are critical. With the rapid evolution of technology, data centers must be built to accommodate future advancements, particularly in AI and high-performance computing (HPC). This includes planning for increased power densities and the integration of new cooling technologies to handle the higher thermal loads from advanced hardware.

The experts also discussed the concept of self-generation of power on data center campuses. While this can offer some advantages, such as reducing dependency on external power grids, it also introduces new challenges. Operating combined cycle gas turbines or peaker plants requires specialized knowledge and infrastructure, which many data center operators currently lack.

From power infrastructure upgrades to on-site generation options, partnering in new ways with new players came up time and again. That, and the very different timescales of the power and digital infrastructure industries. Highly regulated electric utilities move at a very different pace than data center developers. The sheer size of the AI training opportunity could ultimately bring the two closer to being on the same page.