The Hidden Costs Behind Data Center Construction (and How to Avoid Them)

In 2013, US data centers used approximately 91 billion kWh of electricity and, according to the National Resources Defense Council (NRDC), this is expected to increase to roughly 140 billion kWh annually by 2020.

Building an efficient data center allows for a more powerful, economical solution to vast amounts of energy and money these centers are known to use. Controlling hidden costs behind costs per megawatt ($/MW) has become an important aspect of data center construction.

According to a white paper by Skanska, a multinational construction and development company, the following factors are the primary drivers of data center design, and each has a direct impact on cost:

  • Capacity: the owner’s capacity requirements influence the overall size of the building, affect MEP topology and MEP space requirements, and, when combined with density requirements, determine the dimensions of the data hall.
  • Data Hall Density: like overall capacity, density affects the size of the space and influences MEP topology and system layout.
  • Resiliency/redundancy requirements, or “tier” make up: the owner’s desired resiliency and redundancy standards define building type, MEP topology, building layout drawings and duplication of critical components and systems.
  • Scalable attributes: the amount to which an owner wants to enable scalability determines day one and future phasing requirements. An efficient plan also includes how much infrastructure is available on day one, as well as flexibility for future builds.
  • Ancillary costs: several additional costs affect data center builds, even when those costs do not directly support data center operations. These costs include office space, support spaces, storage and more.

The report, “The Hidden Costs Behind $/MW,” states that data center owner costs are not typically included in the construction build $/MW but they are indeed a part of the overall owner capital spend. Examples of such expenditures are: land, design and consultant fees, utilities, commissioning agent costs, permits, security systems, IT cabling, racks and containment.

Data center builds can also take on non-design related costs, some of which have considerable impact beyond $/MW, including:

  • Region: building a data center in a high cost market can have a major influence on total spending. For example, building in California versus North Carolina could have a significant different in cost.
  • Construction schedule: fast-track projects are subject to major cost additions related to overtime, shift pay and expedited equipment and materials fees.
  • Site selection: tight sites can incur additional building costs related to leasing lots for office space, laydown areas, remote storage, remote parking, weekend deliveries, safety and rigging impacts.
  • Weather: in addition to regional considerations, the timing of a project can also contribute to weather-related costs. Performing civil and structural work during exceptionally cold winters or rainy seasons will impact the cost and speed at which the project is delivered.

The efficiency of data centers has become a hot topic of late, considering the amount of energy such centers consume. Last month, a survey revealed 46% of people were uncertain as to whether their data center had improved in energy efficiency over the last two years. On the other hand, Facebook, one of the world’s largest users of data centers, broke ground on what it claims to be one of the most energy efficient data centers in the world.

The federal government has also recognized the need for efficient data centers. Earlier this year, a bill passed unanimously in the US House of Representatives that proposes a set of energy efficiency standards for federal data centers. The regulations are projected to save as much as $5 billion in energy costs by 2020.

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