Predicted boom of data centers could impact energy demand, job marketThe inventory of space available in metro Atlanta's data centers could triple if all proposals are developed, including the planned expansion of the QTS facility near the Fulton County Jail. File/Credit: David Pendered
By David Pendered
Metro Atlanta may be on the cusp of a building boom for data centers, according to a new report from CBRE. The energy-hungry facilities could present new challenges and opportunities in a region better known for its office and retail commercial markets.
Challenges include providing electricity to data centers, which Georgia Power describes as, “notorious for their intensive energy consumption.” Data centers can have a power density 40 times greater than that of an office building, Georgia Power reported, citing the U.S. Department of Commerce.
Opportunities include possible job creation in new services that are evolving in the data center space, which CBRE’s report noted could include, “layering in managed services, more efficient build costs, changes in design, changes in requirement sizes and needs….”
The capacity of data storage in metro Atlanta would nearly triple if developers build all the product now in the pipeline, according to CBRE. The region now ranks sixth out of the nation’s top seven primary data center markets and is in a virtual tie for fourth place in vacancy rate.
The locations of the proposed facilities are not identified in CBRE’s report of the sector for second half of 2018, titled North American Data Center Trends Report. CBRE is a global commercial real estate services and investment firm based in Los Angeles with offices in Atlanta.
The data center sector is attracted to metro Atlanta in response to two incentives – one national and one regional:
- The sector benefits from provisions in the federal tax bill President Trump signed in 2017;
- The region’s comparatively low cost of land and electricity, as well as local development incentives.
Tim Huffman, CBRE’s senior vice president and director of data center solutions, put the two factors on similar footing in his overview of the metro Atlanta market:
- “Atlanta is one of the lowest total cost of ownership environments in the country for data center operations. Our cost of power is less than 4 cents per kilowatt hour.
- “The new tax incentive bill relieves operators and tenants of sales and use tax on facilities infrastructure and [information technology] hardware. In [the first three months of] 2019, we’ve seen a significant uptick in out-of-region projects considering Atlanta, as well as larger than normal local organic growth.”
An additional incentive cited in the report is metro Atlanta’s “generous incentive programs.”
CBRE analysts cited one data center expansion project that’s pending approval from Atlanta – at a location near the Fulton County Jail and southwest of the planned public park at the city-owned site of the former Bellwood Quarry.
QTS has filed an application with Atlanta for approval of an expansion that would create a data center of 1.4 million square feet, a facility nearly as large as Lenox Square. QTS has applied for a permit to build a center with 488,999 square feet. This size is significantly larger than the 300,000 square feet of new space identified in CBRE’s report.
The energy challenges presented by the data centers are contemplated in the Better Buildings Challenge. Atlanta participates in the program, which is an affiliate of the U.S Department of Energy.
The Energy Department’s BBA page on data centers observes that steps that seem minor can significantly reduce energy consumption. One measure calls for using outside air when it’s chilly enough to cool the equipment, rather than always relying on processed air.
Intuit has already implemented some cooling initiatives and has achieved a 20 percent energy reduction at its data center in Quincy, Wash. The facility is moving to its next phase, according to a video presentation by Intuit’s Dave Breland: “Our goal right now is on our outside lighting, and that is moving to an LED solution.”