Key Data Center Industry Partnerships and Acquisitions Continue Addressing Power Demand And Efficiency
Energy. It’s production, use and efficiency improvements continue to be a major focus of the data center industry, driving a continued run of partnership and acquisition announcements as almost every significant player in the business looks to be able to deliver on a more sustainable future.
Siemens and Compass Partner for Custom Power Solutions
Siemens and Compass Datacenters have entered into a multi-year agreement for the supply of custom modular medium-voltage skid solutions, aiming to expedite data center construction and meet the escalating demand from cloud and hyperscale customers.
Compass Datacenters specializes in designing and constructing data center campuses for major technology companies with a focus on meeting the individual needs of their customers. The collaboration with Siemens involves the delivery of up to 1,500 modular medium-voltage skid units over the next five years. These units integrate multiple electrical components, including medium-voltage switchgear and transformers, into a single prefabricated solution. The goal of this integration is to streamline construction processes, reduce installation times, and lower overall costs.
The first deployment of this solution is scheduled for the second half of 2025 at Compass’s new data center campus near Chicago. This rapid deployment timeline aligns with the expected growth in the data center market, driven by advancements in artificial intelligence (AI), cloud computing, and the exponential increase in global data generation.
Siemens’ modular medium-voltage skid solution features maintenance-free 8DJH 36 gas-insulated arc-resistant medium-voltage switchgear and transformers. The compact design enhances energy efficiency and extends the service life of the equipment, contributing to sustainability goals. By consolidating critical power components into a single unit, the solution simplifies deployment across various environments, facilitating faster and more efficient data center construction.
According to Brian Dula, Region CEO of the Electrification and Automation business at Siemens Smart Infrastructure USA:
Tools like artificial intelligence and cloud services provide great opportunities as well as some challenges in terms of the scale of growth. At Siemens we are ‘productizing’ the critical components necessary so companies like Compass can build new data centers faster while reducing on-site work and costs. It is the prefabrication, modular, and fungible design of our technology that provides the bedrock needed to meet the demand the industry is calling for.
With projections indicating double-digit expansion through 2030, efficiency improvements are critical to that growth as power availability is unlikely to grow at a comparable rate, at least in the short term. Factors such as AI and HPC deployments, cloud computing proliferation, and the surge in global data consumption are driving this demand.
The entire industry is under pressure to scale operations rapidly while maintaining efficiency and sustainability and the partnership between Compass and Siemens allows both companies to capitalize on this growth by delivering scalable, cost-effective, and sustainable data center solutions.
And, as we have continued to see over the last year, this partnership underscores the importance of both industry partnerships and the deployment of technological innovation as critical components of the growth of the data center industry.
Vertiv Expands Cooling Technologies with Chinese Acquisition
At the end of 2024, Vertiv announced that t its Chinese subsidiary has acquired certain assets and technologies from BiXin Energy Technology (Suzhou) Co., Ltd, a manufacturer of chillers, heat pumps, heat-recovery solutions and air-handling units.
The Chinese company has a strong presence China and other Asian markets and had been working with Vertiv since early in 2024 delivering Vertiv-branded products in their market. According to Giordano Albertazzi, Chief Executive Officer, Vertiv:
This acquisition supports our capital allocation strategy, which includes adding technologies that are early in the maturity curve to our portfolio. BSE’s solutions and technologies complement and reinforce Vertiv’s existing chiller portfolio and will assist us in addressing growing air and liquid cooling demand to support high-performance compute and AI. Vertiv has the most complete critical digital infrastructure portfolio and BSE further strengthens our technology offerings that we can provide to customers globally.
Along with the additional exposure to the Asian markets, the acquisition expands Vertiv’s already significant portfolio of chillers, cooling technologies, and related products.
BSE's expertise in oil-free, magnetic-bearing centrifugal water-cooled and air-cooled chillers, which offer cooling capacities of up to 5.5 megawatts, complements Vertiv's existing solutions. These chillers are known for high efficiency, low maintenance, quiet operation, and reliability which are attributes crucial for data centers and HPC environments.
Said York Zha, BSE’s CEO:
“We’ve enjoyed an outstanding partnership with Vertiv and look forward to becoming a part of the company. “We’re excited to combine our portfolio with Vertiv’s to deliver a highly efficient and reliable offering of chiller and heat-recovery and reuse solutions for data center customers globally.”
BSE’s significant market presence is enhanced by it’s product certification and industry association relations, including being an Air Conditioning, Heating, Refrigeration Institute (AHRI) certified test facility, a China Refrigeration and Air-Conditioning Industry Association (CRAA) member and recognized as a China High and New-Technology Enterprise.
US Government Commits to Assure Future Power Availability and Pricing
On January 2, 2025, the U.S. General Services Administration (GSA) announced a landmark 10-year electricity procurement contract with Constellation New Energy, Inc., marking the largest energy purchase in GSA's history. This is a ground-breaking agreement, according to GSA Administrator Robin Carnahan who said:
This historic procurement locks in a cost-competitive, reliable supply of nuclear energy over a 10-year period, accelerating progress toward a carbon-free energy future while protecting taxpayers against future price hikes. We’re demonstrating how the federal government can join major corporate clean energy buyers in spurring new nuclear energy capacity and ensuring a reliable, affordable supply of clean energy for everyone.
The agreement encompasses the supply of over 10 million megawatt-hours (MWh) of electricity to 80 federal facilities across the PJM Interconnection region, which includes parts of 11 mid-Atlantic and Midwest states and the District of Columbia. This volume is equivalent to powering more than one million homes annually. A significant portion of this energy will be sourced from carbon pollution-free electricity (CFE), notably nuclear power, aligning with federal sustainability objectives.
This procurement represents GSA's inaugural long-term, multi-agency electricity purchase that includes bundled CFE. By securing a fixed electricity rate for a decade, the contract offers federal agencies budgetary stability amid fluctuating energy markets and rising demands from sectors like data centers and AI facilities.
With this commitment there should be additional benefits for the domestic nuclear industry by hopefully facilitating license extensions for existing plants and investments in new technologies, which are projected to enhance industry output by approximately 135 megawatts.
In the announcement Maria Korsnick, President and CEO of the Nuclear Energy Institute said:
Always-on, secure, clean nuclear energy is widely recognized as key to an affordable and reliable low-carbon electric grid. GSA’s procurement of 2.4 million MWh of electricity over the next decade from Constellation’s nuclear plants builds on commitments by the private and public sectors to invest in reliable, clean energy while promoting innovation and growth in the nuclear industry.
Giving the Government Some Skin in the Game
The initiative advances the erstwhile Biden-Harris administration's commitment to transitioning federal operations to 100% carbon-free electricity by 2030. By integrating substantial nuclear energy into its energy mix, the federal government underscores its dedication to reducing carbon emissions and promoting clean energy solutions. Following through with the reduction of administrative requirements for launching new nuclear power plants and restarting existing facilities should see the government acting on these plans in order to meet their own energy needs.
The GSA contract shows a major endorsement of the need for nuclear power to achieve carbon neutrality. It also reflects a broader trend of both public and private sectors investing in nuclear power to meet escalating energy demands in a way that meets sustainability goals. The agreement is anticipated to stimulate further investments in nuclear infrastructure and technology, reinforcing the nuclear as a primary source of clean and carbon-free power generation.
GSA's historic electricity contract with Constellation New Energy sets a precedent for large-scale, long-term procurement of carbon-free energy by federal agencies. It shows a strategic approach to achieving sustainability goals while ensuring energy reliability and fiscal prudence. This initiative not only supports the federal government's carbon reduction targets but also contributes to the broader adoption of clean energy technologies nationwide.
Previous government commitments to the nuclear sector include backing for the restart of the Palisades Nuclear station in Michigan and planned funding for Constellation’s restart of the Three Mile Island reactor.
2025 Off to a Fast Pace In Facing Data Centers' Power Needs
As widely reported, leading into this year, the data center industry is now witnessing even more numbers of significant partnerships and acquisitions aimed at addressing escalating power demands while also enhancing energy efficiency. All such strategic moves now must be viewed as part of an ongoing cycle informing the sector's commitment to sustainable growth and operational resilience in the face of unprecedented power demands.
Blackstone's Acquisition of Potomac Energy Center
As reported by Reuters, Blackstone Energy Transition Partners, a division of Blackstone, announced the acquisition of the Potomac Energy Center, a 774-megawatt natural gas-fired power plant in Loudoun County, Virginia, for approximately $1 billion. This strategic move highlights the increasing value of power assets situated near major data center hubs.
Loudoun County, hosting about a quarter of the U.S. data center capacity, is pivotal for such investments. The Potomac Energy Center, established in 2017, is noted for its efficiency and modern infrastructure. The surge in AI applications and data center operations has amplified the demand for reliable power sources, making such acquisitions integral to supporting the industry's growth.
TerraPower and Sabey Data Centers' Collaboration
As noted at The Verge, TerraPower, a nuclear energy startup founded by Bill Gates, has entered into a partnership with Sabey Data Centers to explore the deployment of advanced nuclear reactors for powering data centers in the United States. This collaboration aims to meet the rising electricity demands driven by AI and data-intensive applications.
TerraPower's reactors are designed to be safer and more manageable than traditional nuclear plants, presenting a viable alternative to fossil fuels. The partnership is considering potential sites in Texas and the Rocky Mountain region, with a demonstration project anticipated by 2030.
This initiative reflects a broader industry trend towards integrating nuclear energy solutions to ensure sustainable and efficient power supply for data centers.
Google's Investment in Intersect Power
As again reported by Reuters, Alphabet's Google recently participated in an over $800 million funding round for clean energy developer Intersect Power, alongside TPG Rise Climate and other investors. This investment aligns with Google's strategy to expand its data center capacity while adhering to sustainability goals.
By colocating data centers with new clean energy plants, Google aims to reduce power grid constraints and streamline project timelines. The initial phase of this project is scheduled for partial operation by 2026, reaching full capacity by 2027. This approach not only addresses the growing energy demands of AI applications but also reinforces Google's commitment to environmental stewardship.
Strategizing Sustainable Data Center Energy
Key takeaways for the data center industry from these partnerships seem to coalesce around a few points:
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Strategic Energy Asset Acquisitions: Investments like Blackstone's purchase of the Potomac Energy Center underscore the importance of securing reliable power sources near data center hubs to meet increasing energy demands.
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Innovative Energy Partnerships: Collaborations between data center operators and advanced energy solution providers, such as TerraPower and Sabey Data Centers, highlight the industry's pursuit of sustainable and efficient power alternatives, including nuclear energy.
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Integration of Renewable Energy: Google's investment in Intersect Power exemplifies the trend of integrating data center operations with renewable energy sources, aiming to enhance sustainability and reduce reliance on traditional power grids.
These developments reflect the present data center industry's proactive approach to addressing power demand challenges and its commitment to sustainable growth through strategic partnerships and investments.
