Arizona Emerging As Hot Spot for Data Centers Thanks To Availability of Renewable Energy

Arizona’s most plentiful attribute may also be the reason why it is emerging as a hot market for data centers.

Renewable energy is among the top emerging technologies being considered by data center owners to help address power and cooling costs, according to a Mortenson survey of corporate data center executives, data center developers and operators, and information technology providers at the 2014 Data Center World conference.

And thanks to Arizona’s abundant sunshine, the ability to implement solar power along with other green building standards makes Arizona particularly attractive for companies building or relocating their data centers. Arizona’s attractiveness for data centers has resulted in a concerted effort to make them part of the state’s economic development strategy.

“Data centers in the region provide an incredible impact, providing high skilled jobs while increasing the IT capacity in the region,” said Barry Broome, president and CEO of the Greater Phoenix Economic Council. “There continues to be robust growth in the mission critical sector, and we’ve made strategic investments within the market to accelerate the success of the industry.”

Eighty-four percent of respondents to the survey feel there is a need to consider renewable forms of energy, such as wind and solar, to manage future facility energy needs.

Energy is by far the biggest cost for data centers, making power and cooling considerations the most important drivers in determining location, design and construction of facilities. In fact, the top thing data center operators say they would most like to change about their facilities is greater energy efficiency. Nearly half of survey participants also believe a better Power Usage Effectiveness (PUE) rating is achievable through improved technologies.

“With the desire of these companies to have modern, state-of-the-art facilities with highly sustainable building approaches, Arizona has a real opportunity to become the premier environment for data center construction,” said George Forristall, Director of Project Development with Mortenson’s Phoenix office. “These centers will take advantage of new technologies focused on energy efficiency, with a particular focus on renewable energy to help make sure the economics of the facilities are as strong as possible.”

Costs for producing wind have decreased 58% and solar power by 40% in the past five years and they continue to fall, making renewables more cost-competitive with traditional fuel sources in many markets. At the same time, availability is steadily improving. Wind farms, for example, generate power 50% of the time now, up from 35% in 2007. In fact, several leading technology firms in the U.S. are already investing in power purchase agreements (PPA) with wind energy producers to lock-in energy costs over the long term. Mortenson has built several of the wind farms, located in Illinois, Iowa and Texas, that are a part of those PPA deals.

The Mortenson survey also covers such issues as:

• current and future use of Data Center Information Management (DCIM)

• leasing vs. owning facilities

• growth expectations

• LEED trends

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