How data centers are an opportunity for load growth in member communities
EnergyLines September 2020
The storage of digital data is big business. The data center market in the U.S. is expected to grow to more than $69 billion by 2024, according to a report compiled by market data and trends analyst Arizton.
This growth has not been slowed by the pandemic; if anything it has given it a boost. This can be seen as leading cloud vendor, Amazon, reported a 65 percent backlog for cloud services in the second quarter, according to the Wall Street Journal. Demand is growing as businesses look to transition digital operations to the cloud.
From the data-driving apps on our phones to business storage needs for email, websites and commerce, data centers are dedicated facilities that store this information so businesses don’t have to house, protect and backup data locally.
The increase in demand for information storage has led to facilities as large as 100,000 square feet full of servers, known as hyperscale data centers. The Economic Development department at Hoosier Energy has been identifying sites to attract the development of these facilities in member communities.
“This is a great way to bring large data center players like Amazon to rural America,” said Hoosier Energy Economic Development Manager Jeremy Sowders.
Hyperscale data centers are attractive because they average 100 MW of energy use. Helping meet this potential energy demand are projects like the recently completed Duff to Coleman 345 KV line. This helps reduce energy congestion in the Midcontinent Independent System Operator territory and opens up the opportunity for energy-intensive tech business expansion in the region.
Location, location, location
Finding a suitable data center location requires certification including energy capacity available, long haul internet connections and low environmental risk.
The Business Enterprise Park in Greensburg, Ind., fits the bill. Served by Decatur County REMC, this site has been earmarked for data center development. To attract developers, this shovel-ready site is posted on HoosierSites.com. Properties like this help Commercial and Industrial (C&I) businesses find sites to locate or expand in member communities.
Securing a data center takes more than a website and determination. Diverse partnerships are needed to show results. From local economic development organizations to consultants and property developers, Sowders has been building these relationships to attract member-focused C&I business growth. Brett Abplanalp, CEO at Decatur County REMC, has taken notice of the work being done by the economic development team at Hoosier Energy.
“This is an exciting opportunity for potential growth of our cooperative and community. We are fortunate to have such strong economic development partnerships and support from our community and power provider,” said Abplanalp.
Indiana’s new advantage
Sites like the one in Decatur County benefit from recent state legislation that provides tax exemptions that expire after 25 years unless the investment is more than $750 million, and then the exemption extends to 50 years. That is the longest exemption offered in any state. Combine that with Hoosier Energy’s economic development rider that provides discounted energy costs for the first six years of a project and Indiana is a very attractive location.
“As we look at similar sites in member communities, the work we have already done gives us the opportunity to go out and market sites to developers and to help members bring jobs, investment and load to their communities,” said Sowders.
Hoosier Energy is working with member cooperatives and economic development professionals to identify additional sites for data center development in Jeffersonville, Vincennes, Oden and Lanesville.