Tech giants are looking to repurpose old power stations for data center demand

The rising demand for AI is driving leading tech companies to explore alternative solutions for powering their data centers. Microsoft, in particular, is considering the potential use of nuclear energy to meet these needs.

The challenges confronting firms like Microsoft, Google, and Amazon extend beyond securing affordable and green energy sources, however. They are also grappling with the problem of identifying suitable locations for new data centers that provide the necessary infrastructure, including sufficient power and connectivity.

As traditional locations become saturated, the tech titans are increasingly considering more unconventional sites, including repurposing old industrial facilities and decommissioned power stations.

Not without problems

The Financial Times, quoting Adam Cookson, head of land transactions for real estate firm Cushman & Wakefield’s Emea data center advisory group, says “many data center markets are ‘heavily constrained when it comes to land availability and power,’ which in turn [has] fueled interest in smaller markets and ‘more complicated sites’ such as old power stations”.

Camilla Hodgson, who authored FT piece, notes, “Coal power stations are being decommissioned in parts of the US and Europe, but may have attributes that a data center campus would need. Industrial sites will typically have been designed for high power usage, for example, and might come with power transmission infrastructure and be located close to a water source.”

The conversion of such sites is not without challenges of course, particularly when it comes to reconnecting them to the power grid. However, repurposing old industrial locations is increasingly being seen as a more viable option than building new facilities entirely from scratch.

According to the article, Microsoft plans to develop data centers at the sites of the decommissioned Eggborough and Skelton Grange power stations near Leeds, England, with construction at Eggborough expected to begin in 2027. Amazon is reportedly planning a project at the site of the old Birchwood power station in Virginia, USA.