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The explosive growth in data center construction and the related increases in demand for the electrical system installation and supply and logistical services they require is quite unlike anything the electrical business has ever seen. Over the years there’s been booms in speculative office construction, energy-efficient lighting retrofits and the installation of power quality industrial automation products. But the dollars being spent on new data centers – and the electrical construction materials that help power them – may very well be unmatched.
By all sorts of different economic metrics, data center construction continues at an impressive rate. The U.S. Census Bureau recently started breaking out data center construction in its monthly Value of Private Construction Put in Place data, and through Nov. 2024, data centers were enjoying one of the highest year-to-date growth percentages of any project category, with a +43.1% increase to $31.5 billion in spending. The overall power demand new data centers are putting on the U.S. electrical grid is getting more intense, too. A recent Goldman Sachs research report said data centers currently consume 1% to 2% of overall power, but that this percentage will grow to 3% to 4% by 2030.
Why the doubling of power demands? AI ( artificial intelligence) is a big reason. That Goldman Sachs report said a ChatGPT query needs nearly 10 times as much electricity to process as a Google search, and that despite the steady growth of data centers to date, they have displayed a stable appetite for power, even as their workloads mounted. It also said that as the pace of efficiency gains in electricity use slows and the AI revolution gathers steam, data center power demand will grow 160% by 2030.
This all means big business for electrical contractors, design engineers and other electrical professionals involved with data center construction. While electrical products and related installation services typically account for 10% or so of the total cost of the average construction project, they can easily account for more than twice that percentage in a data center. Along with the cost of service equipment, cable tray or conduit, fiber-optic/data and power cabling, connectors electrical cabinets and other basic electrical system materials, these facilities require sophisticated cooling, standby generators/power backup and security or signaling systems as well. The U.S. Chamber Technology Engagement Center (C-TEC) said in a post that the American Society of Professional Estimators found electrical equipment costs are approximately 25% of a data center project.
Data centers will continue to get larger in the next few years, and the equipment within will get more sophisticated. According to CBRE real estate research, “The rise of AI and machine learning is driving significant changes in data centers, including increased use of graphics processing units (GPUs) and liquid cooling to reduce the heat from these more power-intensive applications.”
The demands for more power are forcing a notable shift in the locations where new data centers will be built. While the famous “Data Center Alley” west of downtown Washington, DC, in Virginia’s Fairfax and Loudon Counties has the densest concentration of data centers in the nation, new facilities there having a tougher time being approved there by the local power company, Dominion Energy, because of their additional demand for power and water. A recent Bloomberg report said Dominion Energy “expects the time it takes to connect large data centers to the electric grid to increase by one to three years amid a surge in requests, bringing the total wait time to as long as seven years.” This post said the longer wait times only apply to data centers requiring 100 MW or more of power and won’t affect projects already in the evaluation process. A post at www.datacenterknowledge.com said in March 2024 northern Virginia had 245 data centers covering 25,000,000 sq ft and consuming 3.6 GW of power.
Despite the concerns about power availability in some markets, the size of data center projects is very definitely increasing. Electrical Marketing logged more than 30 data center projects value at more than $500 million that either broke ground or were in the planning stage in 2024, with nine of these projects valued at more than $1 billion (See table below). While the Washington, DC, metro is struggling to cope with additional power demand, other states are going all out to attract new data centers. For example, the Atlanta metropolitan area saw an unprecedented amount of data center development in 2024. Through mid-year 2024, CBRE said the data centers under construction in Atlanta increased by 76% year-over-year to 1,289.1 MW. There’s more to come in Georgia. Late last year, plans surfaced for Project Sail, a massive 13-building data center project in Coweta County southwest of Atlanta that would have 4.9-milliion-q-ft under roof. A post at www.govtech.xom said the Project Sail project is valued at $17 billion.
Louisiana is getting in on the data center action, too. Meta recently announced plans for a $10-billion development in Richland Parish in northeast Louisiana. Meta said in a Facebook post said, “We are excited to announce that Richland Parish, LA, will be home to Meta’s newest data center — our 23rd data center in the United States and 27th in the world. This custom-designed four million-sq-ft campus will be our largest data center to date.” A post at www.datacenterdynamics.com said this data center campus will cover more than 4 million sq ft and is expected to begin in December and to continue through 2030. Turner Construction Co., DR Construction and M.A. Mortenson will build the data center, according to a post at www.turnerconstruction.com.
Data centers will continue to be big business for electrical contractors for the foreseeable future, and many of the larger electrical contractors have been in this niche for many years. If it’s a new business for your company, check out what some of veteran contracting firms in that market have to say about data centers. Cupertino Electric says on its website (www.cei.com) that it has “designed, installed and commissioned more than 11.5 million square feet of data center space since the 1990s.”
EMCOR also promotes the work it does in data centers and says on its website (www.emcor.com) that its companies have “completed 875 mission-critical data center projects since 2006, including 450-plus electrical projects; 250-plus mechanical projects; 100-plus facility service projects; and 75-plus fire projects”. There’s also a lively discussion underway on the technical aspects of data centers and getting into this business segment in one of Mike Holt’s Forums at https://forums.mikeholt.com/threads/data-center-technician-insight.2582315/.
The demands for more power are forcing a notable shift in the locations where new data centers will be built. While the famous “Data Center Alley” west of downtown Washington, DC, in Virginia’s Fairfax and Loudon Counties has the densest concentration of data centers in the nation, new facilities there having a tougher time being approved there by the local power company, Dominion Energy, because of their additional demand for power and water. A recent Bloomberg report said Dominion Energy “expects the time it takes to connect large data centers to the electric grid to increase by one to three years amid a surge in requests, bringing the total wait time to as long as seven years.” This post said the longer wait times only apply to data centers requiring 100 MW or more of power and won’t affect projects already in the evaluation process. A post at www.datacenterknowledge.com said in March 2024 northern Virginia had 245 data centers covering 25,000,000 sq ft and consuming 3.6 GW of power.
Despite the concerns about power availability in some markets, the size of data center projects is very definitely increasing. Electrical Marketing logged more than 30 data center projects value at more than $500 million that either broke ground or were in the planning stage in 2024, with nine of these projects valued at more than $1 billion (See table below). While the Washington, DC, metro is struggling to cope with additional power demand, other states are going all out to attract new data centers. For example, the Atlanta metropolitan area saw an unprecedented amount of data center development in 2024. Through mid-year 2024, CBRE said the data centers under construction in Atlanta increased by 76% year-over-year to 1,289.1 MW. There’s more to come in Georgia. Late last year, plans surfaced for Project Sail, a massive 13-building data center project in Coweta County southwest of Atlanta that would have 4.9-milliion-q-ft under roof. A post at www.govtech.xom said the Project Sail project is valued at $17 billion.
Louisiana is getting in on the data center action, too. Meta recently announced plans for a $10-billion development in Richland Parish in northeast Louisiana. Meta said in a Facebook post said, “We are excited to announce that Richland Parish, LA, will be home to Meta’s newest data center — our 23rd data center in the United States and 27th in the world. This custom-designed four million-sq-ft campus will be our largest data center to date.” A post at www.datacenterdynamics.com said this data center campus will cover more than 4 million sq ft and is expected to begin in December and to continue through 2030. Turner Construction Co., DR Construction and M.A. Mortenson will build the data center, according to a post at www.turnerconstruction.com.
Data centers will continue to be big business for electrical contractors for the foreseeable future, and many of the larger electrical contractors have been in this niche for many years. If it’s a new business for your company, check out what some of veteran contracting firms in that market have to say about data centers. Cupertino Electric says on its website (www.cei.com) that it has “designed, installed and commissioned more than 11.5 million square feet of data center space since the 1990s.”
EMCOR also promotes the work it does in data centers and says on its website (www.emcor.com) that its companies have “completed 875 mission-critical data center projects since 2006, including 450-plus electrical projects; 250-plus mechanical projects; 100-plus facility service projects; and 75-plus fire projects”. There’s also a lively discussion underway on the technical aspects of data centers and getting into this business segment in one of Mike Holt’s Forums at https://forums.mikeholt.com/threads/data-center-technician-insight.2582315/.