Rider Levett Bucknall recently held the latest in a series of roundtables with key data centre stakeholders including engineers, architects, contractors, and occupiers.
The crux of the discussion was around the conflicting conditions the sector is experiencing. The accelerating demand for data and digital services continues to drive the construction of data centres. However, this is set against a backdrop of extreme market conditions from supply chain issues to the energy crisis and uncertainty around costs and currencies. Alongside this sits the increasing pressure to meet ESG targets and ambitions, not to mention the ongoing competition for talent and resource to help build the sector.
With this mix of potent factors, there was much discussion around the table about how we tackle these issues to ensure the sector remains viable for the long term. We have summarised a few key take-outs from the session, with longer deep dives to follow.
Our thanks to all attendees for contributing to the thought-provoking debate.
No let up for demand
The need for new data centres continues to grow exponentially, people are busier than ever, and capacity is stretched to the limit. There is a real challenge to recruit the right people with the right skills but an admission that, as an industry, we need to get much smarter in how we go about this.
Conversation on how the industry builds the desperately needed talent and diversity, included one suggestion of following the example of the film industry. It has addressed head-on issues surrounding the haphazard nature of entry into the industry and inconsistent work practices. By collaborating to establish a clear career pathway, the sector ensured it had a talent pipeline. Within data centres, we are certainly starting to see the career pathway build with more industry links to schools and academies.
There was a consensus that to tackle the challenge of the pressing need for talent now. We have to break the mindset of chasing the same talent pool and be open to looking outside of the sector to bring in resource. We need to break the stigma of having to have data centre experience and look at transferrable skill sets. There was also real debate around the actions needed, both from individuals and companies, to tackle the lack of diversity and make the sector more inclusive – a must have in appealing to the next generation.
Power remains the number one issue
The race for power to supply the ever-growing pipeline of new data centres remains a major priority and will only intensify as all industries look for alternatives to petrol and gas. There was talk as to whether we could reach the point when data centres are being built with the knowledge that the power could be coming onstream 10-15 years later. However, with necessity being the mother of invention, there was no doubt in the room that we should – and will – see big developments in this area, such as Microsoft’s recent deal with Helion Energy to buy power from its fusion power plant due to be online by 2028.
Challenges were discussed from the pressure on the UK National Grid to cope with the step change in the amount of power needed, such as 100MW requirements, to the recognition that some data centre operators are already investing heavily to reinforce the network. As well as power in, the issue of harnessing the heat thrown off to be utilised by local communities, was recognised as an opportunity to be addressed. Lack of infrastructure combined with the fact that heat generated from one data centre is not consistent enough to feed a heat distribution network is an area where the industry should continue to look for solutions.
Is public misconception about data centres damaging the industry?
With the recent Panorama programme, a case in point about some of the misconceptions surrounding data centres, attendees shared views about whether, due to the historic secrecy in the industry, we have been our own worst enemies. With the economy intrinsically supported by data centres and the everyday actions of individuals from sending emails to creating TikTok videos, there is a real opportunity for a collective education piece. A need to own the story of what we do and sell it more effectively.
The public doesn’t see the innovations and sustainability efficiencies that are being made. As data centres will become more and more visible, we must take the opportunity to increase this understanding now. As well as combatting misconceptions, it was discussed that this would help with future recruitment and perhaps even lead to an interesting public debate around the trade-off between people accepting a fraction of a delay to non-critical services and the sustainability benefits that could bring.
Supply chain squeeze and lengthening lead times for materials
With the aftermath of the pandemic, the ongoing war in Ukraine and increasing costs, issues around both the cost for materials and uncertainty of lead times, continues to be a concern. With talk of prices fluctuating by 30% and lead times for items such as generators doubling from 30 to 60 weeks, this has a big impact on project management as well as how much of increased costs, if any, can be passed to the end user.
The unpredictable market is not helped by major companies placing large pre-orders that suck resource from the system. There was much debate about how we break the cycle of building in back-up to the already existing back-up, with ideas ranging from creating a culture of ‘if you don’t use it, you lose it’ to increasing the use of green energy and bringing in legislation to cool the market.
Location, location, location
The subject of where next for data centres and expanding into new territories in addition to the well-established FLAP/D (Frankfurt, London, Amsterdam, Paris, and Dublin) market was another hot topic. There was common agreement that entering any new market was a steep learning curve. Factoring in the differing ways the supply chain works is one key issue, for example, architects working in Spain are qualified by law to undertake structural and MEP designs, making fees more competitive and attractive. But although a huge amount of due diligence is undertaken prior to arrival, there was consensus that a lot of learning happens when the team is on the ground.
Even when moving within the same country, there can be differences in labour laws, planning regulations and languages that take time to factor in. There was contractor comment that they often took their own supply chain to work alongside local labour and if they were approached with regards to supporting a territory where they didn’t think they could provide a strong resource, they would not compete. Combining the need for global standards and protocols with a focus on local practices is a constant balancing act that takes time and investment in the long term.
Do we need government investment and regulation?
And finally, with the industry being critical to the UK economy, views were shared on whether we should see increased government investment to support the power infrastructure needed. And as we are on the precipice of AI and quantum computing creating a seismic change in usage, do we also need to see increasing industry or government legislation to sit alongside this? With last year’s consultation seeking views on the security of data centres and cloud services, clearly the government sees this as a critical area. Could we even get to the point where we see a personal tax to support much needed investment in infrastructure, based on the amount of data used?