Plugged In: Exploring Energy with Constellation - Episode 5

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Bridging Innovation and Energy Needs in Data Centers

Lynch discusses the challenges and progress in transitioning to sustainable energy solutions for clients in the data center industry. While sustainability is a priority for clients, the lack of available, reliable, and scalable renewable energy sources presents significant hurdles. One example is the Q Scale project in Quebec, which uses hydropower and repurposes waste heat for greenhouse farming, as innovative but not yet widely replicable solutions. Lynch also mentions the role of natural gas, coal, and emerging technologies like small modular reactors (SMRs) and battery storage as key areas of exploration, though these technologies face limitations in availability, cost, and scalability.

Shifting Strategies in Data Center Development

Lynch talks about the evolving challenges and opportunities in data center development. While power availability remains the dominant issue, other concerns like fiber connectivity have become less significant due to improved infrastructure and the long lead times in development. A key shift in strategy is focusing on "bringing the site to the power" rather than vice versa, leading to data center projects in regions like Louisiana, Indiana, and Pennsylvania, where power availability is greater. Additionally, the increasing size requirements for facilities have changed the dynamics of site selection, moving away from traditional hubs like Northern Virginia and Silicon Valley.

Innovations and Challenges in Data Center Design

Innovations in data center design aim to improve efficiency, sustainability, and water usage. This includes advancements such as liquid cooling for high-density racks, alternative backup power sources like hydropower, and improved battery storage for renewable energy. Lynch reflects on the industry's progress, noting how far efficiency has come. However, challenges persist, especially balancing the demand for newer, sustainable facilities with supply chain constraints and limited space. In the short term, many clients are forced to continue operating in older, less efficient facilities until supply and demand equalize. Lynch optimistically notes that these outdated facilities will eventually be upgraded or repurposed as new investments and technologies emerge.

Insights on Data Centers and Urgency Challenges

Lynch shares how CRBE is supporting clients in managing sustainability initiatives, including tracking carbon emissions and facilitating power purchase agreements (PPAs). He also highlights the urgency mismatch between the technology sector's demand for sustainable power and the slower pace of utility companies, noting the continued reliance on natural gas.
Lynch elaborates on the complex ecosystem of stakeholders involved in building large facilities like data centers, emphasizing collaboration with economic developers, utilities, and corporate teams. He points out the economic benefits of data centers for communities and stresses the importance of aligning economic development efforts with utility readiness. Additionally, he also mentions logistical challenges, including long lead times for critical electrical equipment, which can delay data center development.

The Intersection of AI and Data Centers

Lynch delves into the intersection of AI and data centers, exploring the differences and overlaps between these rapidly evolving fields. In terms of the current stage of AI development across the U.S., Europe, and Asia, it's still in its early stages, with significant opportunities ahead. There's a shift from large training models to inference-based and private AI, which will demand increased connectivity, power, and latency-sensitive infrastructure in urban centers.
He also discusses the growth of cloud computing and how enterprise clients may shift back to owning data centers to maintain control over their expanding technological needs, underscoring the inevitability of technological integration into all businesses.

The Future of Data and Sustainability

Hanna and Lynch reflect on their partnership and the role they play in addressing the power needs of the growing data economy. Lynch notes how power constraints have acted as a beneficial throttle to prevent overbuilding, referencing lessons learned from past infrastructure overinvestments. He also shares his optimism for the future, highlighting the need for innovation in data centers, AI, and security, alongside sustainable infrastructure to support emerging technologies.

Connect with Pat Lynch

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Pat Lynch, Executive Managing Director for CBRE’s Data Center Solutions, acts as an advisor, advocate, and partner in navigating the dynamic technology needs for his clients. Pat and his team of professionals develop custom mission-critical strategies that address specific industry challenges and help meet business objectives. Through creative problem-solving and transaction structuring, clients experience improved reliability and expense management, and operational efficiencies. CBRE’s Data Center Solutions has experienced significant growth under Pat’s leadership, resulting in a diverse client base in terms of size and industry.

Prior to joining CBRE in 2011, Pat led global real estate services for a number of technology companies including Level 3 Communications, Carlyle Group/Coresite, First Data Corporation, and MFS Communications. Having successfully completed multimillion-dollar transactions for site acquisitions and developments, his professional acumen includes data center and mission-critical facilities, global corporate service delivery, portfolio optimization, and leadership as a senior manager. Pat volunteers as a coach for a competitive junior high boys basketball team. He also serves on the board for the rocky mountain region chapters of the Association for Data Center Management (AFCOM) and CoreNet Global.

Connect with Constellation

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•  Follow Chuck Hanna on LinkedIn
• Learn more about Constellation sustainability solutions