Microsoft, Amazon and others are planning to turn old power plants and industrial sites into data centers

In recent years, the technology industry has seen a surge in demand for electricity for data centers as AI has become more prevalent. To meet this growing demand, companies such as Microsoft, Google, and Amazon are planning to convert old power plants and industrial sites into data centers.

Tech industry taps old power stations to expand AI infrastructure

Companies such as Microsoft, Google and Amazon are investing billions of dollars in building data centers to enhance their cloud computing and AI services, but building a data center requires vast amounts of land and electricity, making it difficult to secure land for new data center construction.

'Many data centre markets are heavily constrained in terms of land availability and power, so we are seeing increased interest in more complex sites such as older power stations,' said Adam Cookson, head of land transactions at property firm Cushman & Wakefield.

In the United States and some European countries, where the shift to renewable energy such as solar power generation is progressing, old coal-fired power plants are on the decline. Companies such as Microsoft have set their sights on these abandoned power plants and are converting them into data centers. These power plants and industrial sites are often built near water sources, in addition to having power transmission infrastructure that can withstand huge amounts of power usage. In data centers, intense heat is generated when performing huge calculations, so a large amount of water is required to cool the computers, and Microsoft draws water from a nearby river to cool the computers.

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In fact, Microsoft plans to build data centers on the former Eggborough and Skelton Grange power stations in northern England, with plans underway to complete the project in 2027. Amazon is also planning to build a data center on the former Birchwood power station in Virginia, USA. In addition, sources say there are several similar power plant deals in the works in Europe.

Real estate company Thor Equities Group has acquired old factories in Georgia, USA, and Chairman Joe Sit said, 'These factories are ideal for developing data centers because they have infrastructure such as transformers, water, sewerage and natural gas.'

However, some sources point out that converting such power plants into data centers would be a lengthy, expensive and government-involved process that may not always be practical. Daniel Thorpe of real estate group JLL also said, 'How much it would cost to repurpose power plants or industrial sites depends a lot on the details of the site, the scarcity of land and land prices.'