U.S. Data Center Power Market - 2023-2030

Overview

U.S. Data Center Power Market reached US$ 2.8 billion in 2022 and is expected to reach US$ 5.0 billion by 2030, growing with a CAGR of 7.7% during the forecast period 2023-2030.

The data center power market in U.S. is experiencing significant growth, driven by various factors and initiatives aimed at improving energy efficiency and sustainability. Organizations, including cloud data centers, are actively pursuing green data center initiatives. The efforts focus on improving energy efficiency, reducing carbon footprints and adopting eco-friendly practices. Cloud vendors are increasingly using renewable energy sources, measuring power Usage effectiveness and planning to become carbon-negative.

Cloud vendors in U.S. are investing in renewable energy sources such as wind and solar power. It either own and manage renewable energy facilities or enter contracts with renewable energy providers. The shift toward renewable energy contributes to the growth of sustainable data center power solutions. Data center buildings are designed and constructed to adhere to energy-efficient building standards. It includes incorporating energy-efficient HVAC systems, equipment racks with cooling systems and energy-efficient doors and windows.

U.S. is home to some of the world's largest technology companies, including Google, Microsoft, Amazon and Facebook. The tech giants continuously expand their data center infrastructure to support their services, contributing to the growth of the data center power market. Data center operators are increasingly committing to carbon-free or carbon-neutral energy goals. Initiatives like the 24/7 Carbon-free Energy Compact, which involves major data center operators like Google, Microsoft and Iron Mountain, aim to transition data centers to run on renewable energy sources, further driving the growth of sustainable data center power solutions.

Dynamics

Rapid Growth in Demand of Data Center

The data center power market is experiencing significant growth due to increasing demand for data centers. According to "Web Tribunal" report, in 2021, global spending on data center systems reached an impressive US$237 billion, underscoring the importance of data centers in modern business operations. The government owns and operates over 1,500 data centers, reflecting the critical role of data centers in governmental operations.

Data centers are energy-intensive facilities and they consume approximately 2% of the total energy in U.S. It highlights their substantial power requirements. About 40% of data center operating costs are attributed to energy consumption, emphasizing the need for energy-efficient solutions in the industry. There are approximately 7,500 data centers globally, showcasing their global prevalence and significance. As data generation continues to rise, the data center power market is expected to expand further to meet the increasing need for storage, processing and distribution of data.

Renewable Energy Revolutionizing Data Center Power for Sustainability

Renewable energy solutions are driving the market for data center power, as data center industry is increasingly focused on reducing its environmental footprint. Renewable energy sources such as wind, solar and hydropower are inherently sustainable and produce minimal greenhouse gas emissions. By using renewable energy, data centers can significantly reduce their carbon footprint, aligning with global efforts to combat climate change.

Many regions and countries have implemented regulations and incentives to promote the use of renewable energy. Data centers that utilize renewable energy can benefit from these incentives, including tax credits and renewable energy certificates, while also complying with sustainability and environmental regulations. Advances in renewable energy technology, such as improved solar panels and energy storage solutions, have made renewable energy more reliable and cost-effective. The advancements make it more attractive for data centers to invest in renewable energy infrastructure.

Furthermore, EACs, such as Guarantees of Origin (GOs) in Europe and Renewable Energy Certificates (RECs) in North America, play a crucial role in documenting renewable energy purchases. It allows data centers to prove that the electricity they use comes from clean sources, enhancing transparency and credibility in sustainability reporting.

Grid Upgrades and Space Challenges

The data center power market is negatively impacted by the need to upgrade the power grid and address transmission bottlenecks is causing delays in power delivery from local utilities to data centers. As a result, the data center industry is likely to experience slower growth in key markets. With strong demand for data center space and limited availability, space is becoming scarcer and more expensive.

Furthermore, Expanding transmission capacity often encounters resistance from local communities. Many people do not want high-capacity power lines in their neighborhoods. It community resistance can significantly delay transmission projects, sometimes taking years or even decades for major projects to gain approval and be completed.

Some regions are facing severe power constraints due to high demand for commercial, residential and data center infrastructure. Silicon Valley, such as, is experiencing power generation issues, with substation sites not expected to be energized until 2028-2029. Grant County in Washington, known for its data center cluster, is also approaching capacity limits.

Segment Analysis

The global U.S. data center power market is segmented based on power, indicator, solution, service and data center size.

Power Usage Effectiveness a Key Metric for Data Center Efficiency

Power Usage Effectiveness (PUE) holds the largest segment in data center power Usage efficiency. PUE is a critical metric that measures the efficiency of power Usage. It represents the ratio of the total power used by a data center facility to the power delivered to the computing equipment. Typically, data centers have an average PUE around 1.8. However, data centers focusing on efficiency strive to achieve PUE values of 1.2 or less, indicating a higher level of energy efficiency.

Data center operators calculate instantaneous PUE by considering various components, including lighting, utility plugs, cooling, pumps, heating, ventilation, air conditioning (HVAC) and IT equipment. The components encompass the entire energy consumption within the data center facility, allowing operators to assess and improve its efficiency. Lower PUE values signify that a data center is using a smaller proportion of its power for non-computing purposes, making it more energy-efficient.

Geographical Penetration

Data Center Energy Consumption and U.S.'s Leadership Efforts

Data centers are known to be one of the most energy-intensive building types, consuming 10 to 50 times more energy per floor space compared to typical commercial office buildings. It high energy consumption is driven by the increasing demand for data processing and storage. According to U.S. department of energy, the data centers collectively account for approximately 2% of the total electricity Usage in U.S. It substantial electricity consumption is a result of the growing reliance on information technology, including cloud computing, streaming services and data storage.

As the country's use of information technology continues to grow, the energy consumption of data centers and servers is also expected to increase. It growth further solidifies U.S.'s significant market presence in data center power. The U.S. Department of Energy (DOE) collaborates with federal government agencies, national laboratories and the private sector to research and develop energy-efficient data center solutions. The partnerships and research efforts contribute to U.S.'s leadership in data center power management.

Competitive Landscape

major global players in the market include: General Electric, Eaton, Schneider Electric, Intel, Sunbird DCIM, Vertiv Liebert, LocknCharge, Cisco, Panduit and Belden.

COVID-19 Impact Analysis

COVID-19 pandemic has had a significant impact on the data center power market, the shift towards remote working and the need for robust IT environments to support remote operations led to a surge in demand for data center services. As more businesses and individuals relied on digital connectivity, data centers played a crucial role in providing the necessary infrastructure. The pandemic highlighted the importance of flexible IT architectures. Companies needed to adapt quickly to changes in operating models, including enhanced health and safety provisions, support for remote working, automation of business processes, improved cybersecurity and migration to pay-per-use commercial models.

The pandemic drove increased awareness of the benefits of cloud services. Many businesses migrated their IT platforms to the cloud to enhance cybersecurity measures and ensure business continuity. It resulted in a higher demand for data center services, as cloud solutions rely on data center infrastructure. Data centers with flexible infrastructure were well-suited to meet these evolving requirements.

Russia-Ukraine War Impact

The Russia-Ukraine war has had several significant impacts on the data center power market. Before the war, Ukraine had a considerable number of data centers and IT service providers. While some data centers managed to stay operational, many went offline due to the conflict. Internet traffic in the hardest-hit areas was dramatically affected. Russia has faced increasing isolation from the rest of the world, potentially leading to an isolated internet network. Internet and cloud service providers have stopped servicing Russian clients, posing connectivity challenges for Russian data centers.

The war has had ripple effects on data centers globally. Internet connectivity in various regions, such as Iran, has been affected due to cable cuts in Ukraine. Mobile providers in neighboring countries like Poland and the Czech Republic have prepared to take over mobile networks in Ukraine if the main provider faces disruptions. Data centers in Europe are likely to experience higher power costs. Power expenses are a significant operating cost for data centers and Europeans were already dealing with rising power costs before Ukraine conflict.

By Power

• AC-Power
• DC-Power

By Indicators

• Power Usage effectiveness (PUE)
• Energy efficiency ratio (EER)
• Mean time between failures (MTBF)
• Mean time to repair (MTTR)
• Carbon Usage effectiveness (CUE)

By Solution

• Power distribution
• Power monitoring
• Power backup
• Cabling infrastructure

By Services

• Design and consulting
• Integration and deployment
• Support and maintenance

By Data Center Size

• Small and Medium-sized data center
• Large data center

Key Developments

• In July, 2023, Huawei made significant strides in sustainable data center solutions at the 2023 Global Smart Green Data Center Summit. Huawei unveiled three new data center facility solutions aimed at improving efficiency while maintaining a low Power Usage Effectiveness (PUE) as low as 1.15. Huawei also introduced an intelligent management solution, iManager-M, designed to boost productivity and energy efficiency for data center operators. It cloud-based software displays accurate Key Performance Indicators (KPIs) and allows for remote operations and management, eliminating the need for local servers and reducing capital expenditure.
• In October 2022, PhonePe, a leading fintech platform in India, announced the launch of its first Green Data Center in India. The data center leverages technologies and solutions from Dell Technologies and NTT. The Green Data Center represents a significant step toward more efficient data management for PhonePe, offering benefits such as enhanced data security, improved power efficiency, simplified operations and cloud solutions.
• In January 2023, ECL (Energy Cloud Labs), has introduced a groundbreaking data center model powered by hydrogen. The innovation aims to accelerate the sustainability goals of data centers by reducing their reliance on traditional power sources. ECL (Energy Cloud Labs), has introduced a groundbreaking data center model powered by hydrogen. The innovation aims to accelerate the sustainability goals of data centers by reducing their reliance on traditional power sources.

Why Purchase the Report?

• To visualize the global U.S. data center power market segmentation based on power, indicator, solution, service and data center size, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of U.S. data center power market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global U.S. data center power market report would provide approximately 75 tables, 77 figures and 204 Pages.

Target Audience 2023

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies