The data center industry is poised to benefit from many of the investments proposed by the $1 trillion, bipartisan Infrastructure Bill currently making its way through Congress. The bill promises “historic investment” in the American economy by creating jobs that facilitate a response to climate and other environmental risks. Though it does not specifically call for investment in data centers, there are broad implications for the industry within two of the bill’s largest line items: electric grid improvements and rural broadband access.
The bill would stimulate development of additional energy generation projects, adding capacity to the grid and making it possible to build new data centers. As demand for data centers services grows, the power supply will need to exceed its pace. To obtain permits to build new facilities, utilities must have adequate energy resources available, which this bill would help create.
Additionally, the infrastructure bill explicitly intends to accelerate the renewable energy transition, which will support decarbonization efforts across the technology industry landscape.
A more reliable grid
Funding from the infrastructure bill would strengthen grid reliability, which is essential to maintain the critical services data centers provide. Reliability can be improved by increasing the grid’s resilience to environmental disruptions and aiding the flow of energy between regional grids during local energy shortages. Data centers protect and ensure the continued operations of IT infrastructure, which support critical services that drive commerce and communication. They must remain operational 24x7 and run equipment that draws large amounts of power. Improvements to the electrical grid that enhance energy reliability are crucial.
The bill would also expand access to high-speed internet by bringing broadband infrastructure to rural communities and lowering the cost of internet services. This would inevitably lead to an increase in demand for data center services. As more people and more systems come online, the importance of data centers becomes even more apparent.
Other features of the infrastructure bill could also support the data center industry. Environmental remediation of old industrial sites offers an opportunity to develop and work safely on an existing footprint without requiring the industry to expand into natural areas for new development. Increased investment in water storage, conservation and reclamation would allow data centers to responsibly draw and return water to the watersheds where they operate. Supporting projects that provide clean water and achieve environmental remediation is critical to the health of the nation
As demand for data centers services grows, the supply of clean renewable power will need to exceed its pace. Many in the data center industry have made bold commitments to net-zero operations that are
dependent on the development of a clean and reliable electric grid. The scale of renewable energy needed must be enough to power new operations while also displacing fossil fuel use at existing operations. We are pleased to see the bill’s explicit intent to accelerate the renewable energy transition, which is welcomed across the technology industry.
The water-electricity trade-off
Another important piece for the data center industry is access to water to operate facilities. The bill’s proposed improvements to water storage and reclamation would benefit the industry at large. However, many providers, including CyrusOne, have committed to operating without consuming water for cooling. However, water-free data centers replace water with a higher electricity demand.
This trade off allows the industry to preserve precious water in regions where it is scarce. When the electricity demand is met with carbon-free, renewable energy generation, we limit our environmental impact both locally and globally by reducing our contribution to greenhouse gas emissions and reducing our dependence on the large volume of water necessary to generate electricity from fossil fuels. This underscores the importance of expanding renewable energy deployment to achieve multiple environmental goals.
Finally, data centers and IT services are the backbone of numerous American companies. The bill’s proposed upgrades to transit systems, such as roads, vehicles, rails lines and airplanes that enable distribution for these companies, will benefit everyone, including data centers.
We welcome the bill not only for its impact, but for the sustainable ways it would impact our industry. We are committed to conserving water and energy through the effective design, maintenance and operation of our facilities. And we aspire to be strategic partners for sustainability with our customers. The bill will help this industry achieve its sustainability mission.