Making a data centre work: key considerations
- Water source – Data centres rank among the highest energy-consuming commercial industries. They are hives of electronic processing which generate high levels of heat, in turn requiring large volumes of water for cooling purposes. Securing a suitable water supply is therefore a key consideration for any data centre development, and is one of the main challenges in United Kingdom, particularly in areas that experience warmer summers and are therefore prone to drought periods and hosepipe bans.
- Energy source – The Chief Executive for National Grid in the UK has predicted that power data centres will increase six-fold in the next ten years. The explosion in the use of AI models in the day-to-day activities of organisations and individuals, and (if the technology proves reliable and scalable) a new era of quantum computing, will inevitably accelerate the trend. Energy networks in the UK are already constrained, so one of the major challenges of data centre developments is the sourcing of an uninterrupted supply of energy. There are a number of solutions available, and which should be considered before the development stage; for example, grid connection or co-location with energy companies that generate power.
- Cyber security – Security requirements will depend on the nature and size of the data centre. Security measures may include the actual physical protection of the data centre by way of specialised staff to control ingress / egress points, video surveillance, and rapid response teams to respond to emergencies. IT-security solutions will also be considered in order to protect the digital content that a data centre houses from cyber threats and attacks, for example by the deployment of firewalls, intrusion detection systems, encryption, and access controls. A comprehensive disaster recovery plan will also need to be developed, as will employee training.
- Real estate – There are a number of different real estate considerations relating to data centres. For example, developers may start from scratch by buying and developing the land that data centres are located on. Alternatively, land may be leased from private or public landowners at a premium, or developers may seek to strike a deal with utilities companies and 'co-locate' their data centres on their land. Developers may, in consideration of ESG principles, integrate nature and biodiversity into their construction plans in order to reduce the impact on the environment. Data centres also rely heavily on cabling infrastructure, so developers will need to ascertain if a new data centre will use what’s already underground (which may mean negotiating complex arrangements with third parties), or whether to create new infrastructure (a major undertaking).
In addition to the challenges and topics mentioned above, a key component of any commercially sound data centre project, will be considering how to deliver the project across its lifecycle. Therefore, developers will need to consider how to structure their project. Determining, at an early stage, for example, what project development rights are required, and the corporate vehicle that will benefit from such development rights, will establish which documents are required and identify any interdependencies between key practice areas such as commercial, real estate and planning.
How we can help you
Clearly, there is much to consider. Our experienced team can advise on all aspects of data centre projects, from inception to commercialisation. Please contact Sam Hodgson or Claira Rodden to continue the discussion.
Please contact article authors Sam Hodgson, Claira Rodden or Satinder Kainth to continue the discussion.
