Data centres as an infrastructure asset class are crucial for the digital economy and a huge investment opportunity. The complexity of operational issues is something those new to the sector may not anticipate and interest is likely to increase. We have identified key challenges post-pandemic to consider.
First, the degree of operator involvement in design development to meet the very prescriptive performance requirements. Operators require greater access to the design and construction team, and the liability for the design must not be diluted by that process. Any changes during construction should be avoided, in order to preserve the programme.
Data centre work is complex and so too is the supply chain. Operator agreements must enable developers to change the supply chain and materials in response to supply chain failure. Skills shortages and staff availability are also a concern.
Customers demanding to take up quicker than they and the developers envisaged places further stress on construction programmes and power sourcing, leading to developers needing creative delivery strategies.
Data centres require access to significant amounts of uninterrupted power. Customer requirements and ESG imperatives consequently drive significant innovation in energy efficiency and self-generation from alternative energy sources. With tax incentives and credits also under detailed consideration, the energy component of running costs is a key part of its price and international competitiveness.
Navigating the planning system has its own challenges. Debates around use classes persist and not all authorities recognise the need for future data centre infrastructure. Proposals may not fit with local political priorities and ambitions for available commercial sites. Sustainability policies, including carbon offset requirements and biodiversity net gain, may need to be catered for. A careful engagement strategy here is essential.
Fiona Edmond is a construction, engineering and projects partner and Mark Smith is a real estate partner at Charles Russell Speechlys