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Power shortage hindering data center market growth

There is record global demand for new data centers, but power availability is hindering market growth. This is one of the key findings of the new CBRE report: Global Data Center Trends 2023.

“Large corporations are finding it difficult to find adequate data center capacity,” the report said. “Low supply, construction delays and power challenges are all impacting markets.” The report covers North America, Europe, Latin America and Asia-Pacific.

The report said that in Northern Virginia, which is home to a US nexus of data centers, “power availability issues reflect transmission and distribution issues, not power generation.” “Power supply concerns raise questions about future growth, but the bottleneck should ease by 2025 or 2026.”

In Europe, the report said, “the data center industry’s largest customers are acquiring power capacity in such increasing amounts that it is outpacing absolute growth.”

Other notable findings include:

  • Some secondary markets with strong power supply are poised to attract more data center operators.
  • Northern Virginia remains the world’s largest data center market, with 2,132 megawatts (MW) of total inventory.
  • Northern Virginia, Silicon Valley, Dallas/Ft. Worth and Chicago markets saw record amounts of construction last year.
  • Prices are rising due to lack of data center capacity. Rental rates in Singapore for a requirement of 250 to 500 kilowatts (kW) are the highest at $300 to $450 per month, while the lowest in Chicago is $115 to $125.

Rapid growth in artificial intelligence, streaming, gaming, and self-driving cars are expected to continue to drive strong demand for data centers. This will drive innovations in data center design and technology as operators aim to deliver capacity that meets the increased power density requirements of high-performance computing.

Source: www.bdcnetwork.com

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