Amazon's selection of Pickaway County as the site for its data center campus shows that a community doesn't need to be a technology hub to attract billions of dollars worth of investment.
The need for vast amounts of power to power the complex, energy-intensive demands of artificial intelligence and to store growing data has data center operators scouting sites across Ohio and the Midwest. .
The wave of data centers that began in central Ohio nearly a decade ago is concentrated primarily in New Albany, home to Amazon, Google, Facebook parent company Meta and other companies.
Several additional projects are in the works, with Amazon last year announcing it would spend an additional $3.5 billion to build five more data centers in New Albany as part of a $7.8 billion investment in the region. This is the second largest investment in the state after Intel's $28 billion project. Located in Licking County.
But in recent years, companies have begun to look elsewhere.
“It's a more dynamic and far-reaching story than it was even a few years ago,” said Jacob Albers, head of alternative insights at Cushman & Wakefield, a commercial real estate firm that studies data centers.
For example, Google built data centers on the south side of Lancaster and Columbus.
Outside of central Ohio, Aligned Data Centers has purchased 129 acres in Sandusky for the development of a new data center campus. There was once a General Motors factory on this site.
Amazon is now setting its sights on a 234-acre property along State Route 104 that it purchased for $49.1 million, according to Pickaway County property records.
“It's like every county in the state of Ohio is potentially being assessed, just like every county in the neighboring state is being assessed,” Albers said.
“This has been going on for some time. They continue to look for suitable sites in the region,” said the president and chief executive officer of the Columbus Partnership, a civic and business organization made up of the region's CEOs. CEO Kenny McDonald said.
“We are constantly evaluating new locations based on customer demand. We recently purchased land in Pickaway County and are conducting due diligence on potential locations for our data center,” said Hilliard. Amazon, which also has a data center in Dublin, said.
electricity, electricity, electricity
Central Ohio has long been touted as a prime location for data centers due to its abundance of affordable land, few natural disasters, smart workforce, and abundant supply of affordable electricity. It has been.
The company that developed the data center says the area will become a cloud computing hub and provide a fiber network connecting major cities on the East and West Coasts.
“It's been a pretty ideal market for data center growth. We started seeing interest a few years ago, and now we're seeing even more interest,” Albers said.
McDonald said the assumption is that adequate amounts of power will always be available and in everyone's construction schedule.
“We cannot take for granted that the amount of electricity used by these cloud centers will continue.”
The particular property you are considering building a data center on requires long-term planning to ensure that a sufficient amount of electricity is available and that there are power lines to power the site. he said.
Albers said there are anecdotes of future projects being postponed in the region due to lack of power availability.
Meanwhile, some companies are helping to pursue renewable energy projects to generate the electricity needed to run data centers.
Amazon, for example, buys power from and helps operate 17 solar farms in the state and one of 11 wind farms in Ohio.
The e-commerce giant says it has been the largest corporate purchaser of renewable energy over the past three years, with more than 400 projects around the world.
Artificial intelligence will drive demand for data centers and electricity
A data center is basically a warehouse with rows of computer equipment that holds and runs everything we do online.
“Data centers have been important to everyone's lives for some time,” McDonald said.
But it is artificial intelligence that is driving the demand for more data centers and the increased amount of power to run them.
“This is no longer just an interesting side note to the economy, it has become an essential part of running everyone's business,” McDonald said.
Some applications, such as ChatGPT, require much more power to run than everyday searches, McDonald said.
The increase in data centers comes at the same time as the state introduced a sales tax exemption on equipment used in data centers. The state will provide incentives to projects with an investment of at least $100 million and annual payroll of at least $1.5 million over three years.
The use of exemptions continues to increase. The state projects the tax cuts will cost the state $127.4 million in revenue losses in the next fiscal year, which begins July 1, nearly $5 million more than the current fiscal year.
Is there a problem with the availability of electricity in New Albany? Or not?
A recent Cushman & Wakefield report says power supplies for New Albany's data centers are under strain.
“Like many other markets, the New Albany cluster is experiencing increasing constraints on electricity availability,” the report states. “With power supplies increasingly years away, operators are increasingly looking for available sites far from the development frenzy.”
New Albany spokesman Josh Poland countered that there was a problem. He said he and his report referenced multiple data center projects in New Albany at various levels of development.
“We have not felt any impact from the power issue,” he said.
The federal government's latest short-term energy forecasts predict a 2% increase in electricity consumption by commercial and industrial customers this year, but demand will vary in different regions of the United States.
“Global nonresidential electricity consumption is projected to grow fastest in areas of the country with high concentrations of new large-scale computing customers, such as data centers,” the report said.
American Electric Power said data center growth is increasing electricity demand in central Ohio, with total demand expected to double between 2018 and 2018.
“Data centers are rapidly using up available capacity on the central Ohio power grid,” the company said. “We are working on building new infrastructure to add capacity, but this process will take time. For now, we are carefully managing the power demands of our lines and equipment. , the power usage from the data center poses no threat to the power grid in central Ohio. ”
mawilliams@dispatch.com
@BizMarkWilliams