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Technology giants are in a building spree. There is a dramatic need for new data centers to support the growing use of AI and cloud computing.
AMECO is tracking about 300 proposed data centers, though this number fluctuates as new centers are proposed. These data centers are geographically dispersed across the U.S., with clusters in Texas, the Atlantic coastal states, the Pacific Northwest and the Southwest.
Understanding hyperscale data centers
While all data centers serve similar functions, there is a key distinction between general data centers and "hyperscale" data centers. These centers are operated by major players like Amazon, Google and Microsoft, and are driven by the needs of AI giants like Open AI. AMECO is currently tracking more than 40 planned hyperscale data centers.
Challenges and opportunities: A strategic approach
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These 340+ projects alone represent a great opportunity for construction firms across North America. However, beyond their construction, we must also consider the second-order effects of so many data centers coming online.
For example, how much power is required for these data centers? Hyperscale data centers consume immense amounts of power. A McKinsey report equates the energy usage of a single hyperscale data center to that of approximately 80,000 homes. This presents a significant challenge.
That’s a lot of power needed which means the U.S. power grid is facing a formidable challenge.
Peak energy demand is projected to grow to 38GW by 2028, straining the current power grid. A third-order effect of this data center boom is a coinciding boom in power industry construction. Meeting this demand will require new generation capacity to come online rapidly.
Power solutions and construction efficiencies
Although green solutions like solar and wind can help increase capacity, they are not capable of providing the continuous, reliable energy needed for 24/7 data center operations or for the millions of Americans charging their EVs overnight.
New nuclear technologies show promise, but even optimistic projections do not foresee small modular reactors as a viable option until the 2030s.
This gap will likely be filled by an increase in natural gas power production and coal plants extending their lifecycle. AMECO is tracking about 90 proposed simple cycle and combined cycle gas plants or unit additions across North America. This represents a huge opportunity for the industrial construction industry, but it also brings a set of challenges, such as a limited skilled labor pool and increased demand for rental equipment and construction supplies.
Success in this gas power construction boom will hinge on efficiency and budget certainty. Construction indirect services are often overlooked or treated as an afterthought in project planning, which can lead to costly mistakes. Engaging an integrated partner to provision and execute sitewide services can improve productivity and lower project costs.
Construction projects traditionally suffer from a siloed approach, with parties working independently until their specific phase begins. AMECO has been providing construction indirect Site ServicesTM to large construction projects for more than 75 years. AMECO has found that engaging a Site Services provider early in the planning process — whether by owners, EPCs or CMs — to manage sitewide indirect services can unlock significant construction efficiencies. This approach ensures that scaffolding is erected precisely when and where it’s needed, reduces the number of rented equipment pieces, allows tool cribs to support every contractor on site and ultimately lowers project costs. Additionally, craft productivity improves when the right resources are available onsite at the right time, eliminating wasted time and improving schedules.
The data center boom — and ensuring there is enough reliable power to bring them online — is a prime example of transforming a challenge into an opportunity.
For more information, visit ameco.com.
