Tech Giants Eye Decommissioned Power Stations for Data Centers
Tech giants such as Microsoft, Google, and Amazon are considering repurposing decommissioned power stations into artificial intelligence (AI) driven data centres to meet the growing demand for services and the increased power consumption associated with AI.
A decommissioned power station can be a unique opportunity for a tech company, particularly a hyperscaler. These sites were originally designed for high power usage, and often come equipped with power transmission infrastructure. They are often also located near water sources, which can be a distinct advantage in planning the cooling systems required by data centres.
Speaking to the Financial Times, Adam Cookson, head of land transaction for Cushman & Wakefield’s EMEA data centre advisory group, said data centre markets are ‘heavily constrained when it comes to land availability and power’.
This analysis is especially true in Tier I markets, like FLAP-D European cities, in which traditional sites have been identified and converted with decades of investment by data centre owners and operators.
This has led developers to explore options in smaller markets and more complicated sites, like old power stations. He noted there are ‘increasing opportunities for owners of these assets’.
Data centre research lead at JLL, Daniel Thorpe, added the developers of large data centre campuses are generally the largest cloud computing providers, like Microsoft, Amazon, and Google, saying, usually, it is a large ‘hyperscale’ facility that would be looking at a power station.
While there are many advantages associated with converting power stations to data centres, the process is not without its challenges. The conversion process can be lengthy, costly, and bureaucratic, requiring businesses to gain zoning and local community approvals. Moreover, if a power plant has been disconnected from the grid, it may be difficult to reconnect and to refactor a location to house a data centre to modern standards.
Microsoft has already proposed developing data centres on the sites of the former Eggborough and Skelton Grange power stations in North Yorkshire, England. These sites, which have been dormant since their decommissioning, will be revitalised to meet the energy demands of modern data centres. Microsoft plans to begin construction at the Eggborough site in 2027, aiming to ‘bring this former industrial site back into employment use’.
