The booming demand for artificial intelligence (AI) is driving major tech companies like Microsoft, Google, and Amazon to explore unconventional sites, such as old power stations and industrial facilities, for building new data centers. As the tech giants invest billions into expanding their cloud computing and AI capabilities, they face increasing challenges in finding suitable locations with the necessary power infrastructure.
Traditional data center markets are becoming "heavily constrained" due to limited land availability and power resources, according to Adam Cookson, head of land transactions at Cushman & Wakefield’s EMEA data center advisory group. This has led companies to consider more complex sites, including decommissioned coal power stations, which often have the high power capacity and infrastructure needed for large data centers.
Microsoft is already planning to develop data centers on the sites of the old Eggborough and Skelton Grange power stations near Leeds, UK, with construction on the first site expected to begin in 2027. Similarly, Amazon is planning a data center campus at the site of the old Birchwood power station in Virginia, USA.
The tech industry's growing appetite for electricity to support AI development is intensifying the search for alternative data center locations. AI workloads often require different infrastructure compared to traditional computing tasks, allowing for more flexibility in site selection, even in less central areas. This reduced reliance on low-latency connections opens up opportunities to repurpose industrial sites that may have otherwise been overlooked.
However, converting old power stations into data centers is not without challenges. The process can be lengthy, expensive, and subject to bureaucratic hurdles, especially if the sites have been disconnected from the grid. Mark Dyson, managing director of the carbon-free electricity program at the Rocky Mountain Institute, cautioned that reactivating these sites could be difficult if they are no longer part of the local utility's plans.
Despite these challenges, the trend of repurposing industrial sites for data centers is gaining momentum. For example, Virtus Data Centres recently acquired two sites in Berlin, including a former solar farm and an old munitions factory in the UK, with plans to convert them into data centers by 2026. Similarly, Thor Equities Group purchased a former manufacturing plant in Georgia, USA, equipped with the necessary infrastructure for data center development.
The move towards converting old industrial sites into data centers mirrors strategies employed by the bitcoin mining industry, which has repurposed disused facilities like aluminum smelters for its energy-intensive operations.
As the demand for AI and cloud computing continues to grow, tech companies are likely to keep exploring innovative ways to meet their energy needs, turning to previously overlooked sites that can support the power-intensive demands of modern data centers.
