Bridging the Data Divide: How Urban Data Centers Will Evolve with SMRs, Reuse, and Pragmatic Solutions
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On September 23, 2024, I attended the USGBC National Capital Region's Building Transformation Forum in Reston, Virginia, where industry leaders gathered to discuss the future of data centers. The event featured two dynamic panel sessions, each bringing valuable insights into the challenges and opportunities for sustainable data centers.
The first panel, Decarbonization in Data Centers: Meeting Society’s Data Needs, Sustainably, featured experts like Athavan Rajasundaram, Jeff Gyzen, Suresh Pichai, and Ryan Snow. They explored the urgent need to balance data demand with sustainability goals, focusing on reducing carbon emissions and the growing power demands of data centers.
As Athavan Rajasundaram, Principal at AZ Energy Consultants LLC, pointed out, “Data centers are essential infrastructure, but they also come with significant energy demands.” His statement underlined one of the key issues: the strain on urban power grids. With data center power consumption projected to reach 11% of total U.S. electricity demand within the next decade, it’s clear that relying on the existing energy grid will not be enough. It is projected that data centers in the U.S. could go on to consume between 4.6% and 9.1% of total electricity by 2030, with the most aggressive scenarios driven by increased AI and machine learning demands pushing that number closer to 9%. This trend reflects the increasing energy intensity of modern data centers, especially as AI systems require significantly more power than traditional IT workloads.
During the same panel, Jeff Gyzen, Global Practice Group Director for Arcadis, elaborated on the future role of Small Modular Reactors (SMRs). “SMRs are a pragmatic solution to the growing energy needs of data centers, especially as we move closer to urban environments where traditional power sources just can’t keep up,” he said. Gyzen’s point emphasized that SMRs—smaller, safer, and more flexible than conventional reactors—could offer a critical alternative for providing steady, low-carbon energy without overwhelming urban grids.
But energy supply isn’t the only challenge. The physical presence of data centers in urban environments often sparks community resistance, or NIMBYism (Not In My Backyard). As Suresh Pichai, Principal at Arcadis, highlighted, “Urban data centers bring necessary infrastructure closer to end users, but they also require thoughtful engagement with local communities.” Pichai’s focus on adaptive reuse is one way to address this issue. Instead of building on undeveloped land, transforming vacant office spaces into data centers could reduce the physical and environmental footprint. I think these would be smart solutions to the challenge of location constraints while also addressing concerns about noise, aesthetics, and urban heat islands.
Ryan Snow, Regional Director of USGBC, added, “The future of data centers lies not just in cutting-edge technology, but in how we engage communities and prioritize sustainability across every phase of development.” His comments resonated with the panel’s focus on embodied carbon and the need for sustainable design, retrofitting existing buildings, and rethinking construction practices to meet decarbonization goals.
Following the in-depth exploration of decarbonization strategies, the second panel shifted focus to sustainable construction practices for data centers. The second panel, titled Sustainable Strategies for Data Centers, brought in Chris Gorthy and Mike Humphrey from DPR Construction. They shared practical insights into the rapidly evolving landscape of data center construction and operations, focusing on implementing sustainable practices at scale with interesting project examples and use cases.
Chris Gorthy, Advanced Technology Core Market Preconstruction Leader at DPR Construction, shared detailed insights into how exponential growth in data demand is forcing a paradigm shift in design and construction practices. "Our reaction to the increasing computing power and speed can't be linear—it has to match the exponential growth we're seeing in the industry," he said. Chris highlighted how alternative cooling technologies like water cooling and server density improvements are essential in reducing the environmental footprint of data centers. “We’re now building data centers that deliver 2 megawatts per month on average, and that’s growing. This is where innovations in prefabrication and efficiency improvements really make a difference,” he added, emphasizing the speed at which new facilities are coming online.
And he’s right. Prefabricated construction, which involves assembling components off-site before transporting them to the final location, not only reduces waste but also cuts down on the environmental footprint of building processes. Modular and prefabricated construction methods significantly reduce embodied carbon for data centers. These approaches can decrease waste by 10-15% compared to conventional methods, optimize material use, and shorten construction time. Studies have shown that modular construction can achieve 30-45% embodied carbon savings versus traditional on-site building techniques. Key benefits include using lighter materials like timber instead of carbon-intensive reinforced concrete, more efficient transportation of prefabricated modules, and easily integrating energy-efficient systems. Additionally, modular units are often designed for disassembly and reuse, further extending their lifecycle and reducing overall environmental impact.
Mike Humphrey, Northeast Region Co-Leader at DPR Construction, stressed the importance of balancing speed-to-market with sustainability. “The rapid pace at which we are building data centers—particularly in Northern Virginia—means we have to get really efficient, not just in construction but in how we manage power, water, and embodied carbon," he said. Mike spoke about the practical challenges of keeping up with this growth while ensuring that every project aligns with community values and environmental goals. "We have to engage communities early, even before the design phase, to ensure that we're not only addressing power demands but also looking at how we can benefit the community long-term."
His remarks helped me reflect on the tradeoffs to data centers and their locations. While proximity to users offers benefits like reduced latency and improved physical security, locating data centers near populated areas presents several challenges. Noise pollution from cooling systems and backup generators can disturb nearby residents, potentially requiring acoustic design and mitigation strategies. The substantial power consumption of data centers may strain local power grids, necessitating infrastructure upgrades. Heat generation from facilities can contribute to urban heat island effects, impacting surrounding buildings. Space constraints in urban areas may compromise data center design or capacity. Additionally, security and privacy concerns may arise for both operators and residents, requiring enhanced measures that could affect local aesthetics or accessibility. Traffic increases during construction, and ongoing operations can strain local infrastructure. These factors highlight the need for careful planning and community engagement when integrating data centers into urban environments.
The discussions at the Building Transformation Forum shed light on the nuanced path forward for data center development. As the demand for data processing grows exponentially, urban centers will become focal points for new facilities. But these hubs can't rely on traditional greenfield construction or outdated grid systems. Instead, the future of data centers must embrace pragmatic solutions like adaptive reuse of vacant office buildings and innovative energy technologies like Small Modular Reactors. These strategies provide a dual benefit—addressing both space constraints and the growing need for energy security, all while minimizing the carbon footprint.
Looking ahead, it’s clear that data center development must evolve to balance the competing demands of energy, sustainability, and urban integration. The modular and prefabricated construction methods discussed offer clear advantages in reducing embodied carbon and optimizing material use, with up to 45% savings over traditional techniques. Such approaches reduce waste and allow for the disassembly and reuse of components, extending the lifecycle of data centers while minimizing environmental impact.
Additionally, balancing speed-to-market with sustainability remains a core challenge. As data centers are built at unprecedented speeds, particularly in regions like Northern Virginia, the focus must be on integrating energy-efficient systems, managing water and cooling technologies, and engaging local communities early in the design process. The proximity of data centers to urban areas may offer benefits like reduced latency, but it also introduces challenges such as noise pollution, increased traffic, and heat island effects. Careful planning and collaboration with local stakeholders will be essential to ensure these facilities not only meet the demands of the digital age but also enhance the quality of life in the communities they serve.
As we continue to see data center demand surge, the conversations sparked here at the Building Transformation Forum must evolve into tangible actions. By embracing these sustainable practices, we can redefine how technology and cities coexist for the benefit of society. A holistic approach, driven by innovation, community engagement, and sustainable practices, will be crucial in shaping the next generation of data centers. By rethinking how these facilities are designed, built, and integrated into urban environments, we can ensure that they not only support our technological future but also contribute positively to our cities and the environment.