Substation Ownership Becomes a Power Strategy for Hyperscale Data Centers

As hyperscale data centers are becoming more predominant, they are outpacing the ability of local utilities to supply power. One solution is for the data centers to construct and operate their own substation, allowing the utility to only be responsible for bringing a high-voltage transmission line to the site. A new trend has emerged in the data center industry, one that is likely to remain for years to come.

Black & Veatch Delivers EPC Support for 300MW Hyperscale Data Center Substation

For decades, Black & Veatch has answered the call for the engineering, procurement and construction (EPC) of substations across the globe, and in more recent years, the company has worked closely with data centers to help manage their power requirements. Recently, a large hyperscale data center developer turned to Black & Veatch for its substation needs.

Phased Delivery and Procurement Strategy Keeps Project on Schedule

The 300MW substation was not wrapped up in a complete EPC package, but circumstances dictated each phase be handled on its own. The developer leased out the space to a single client, which put a firm schedule for development into motion. The developer emphasized that on-time delivery was the single most important aspect of the entire project, and Black & Veatch is working aggressively to fulfill that commitment.

The most challenging aspect to maintaining the project schedule was the procurement of long-lead equipment. Working closely with the client, the project team found creative ways to modify the schedule ensuring the project meets its goals. Circuit breakers were the major item that needed procurement attention and with today’s supply chain challenges, they can often require several years of lead time. Our strong connections to global suppliers and decades of procurement relationships enabled us to meet the circuit breaker needs for this client, as well as the procurement needs of a second site. Given the critical importance of the project schedule, construction commenced promptly without being hindered by procurement challenges.

Contract Model Adds Transparency and Budget Confidence

Black & Veatch was also able to put together a contract approach that facilitated the client’s requirements and the schedule. For this project, our team used an “Open to Closed Book” contract, which provides a target price for the project, then will “true up” the accounting as the construction progresses. The client is presented with the bids from subcontractors and is involved in the selection process. Once that is completed, the book is closed and the price is firm. This benefits the client because it provides transparency and cooperation with greater accuracy of project costs and less change orders.

Proven Expertise in High-Voltage Substation Design and Compliance

Black & Veatch has a century-plus of experience in the power industry, and its experience in high voltage and substations has proven to be a differentiator. High voltage construction and installation varies dramatically depending on technology, system requirements and site conditions. Our teams understand how to evaluate these considerations and how to effectively balance costs and environmental aspects. Our deep connection with the utility market includes many areas of specialization, including seismic and geotechnical engineering. Substations can integrate both static and dynamic reactive power and our team of specialists understand the NERC regulations applicable to substations.

As data center projects grow larger, owners need answers to vital questions concerning power availability. Clearly, the trend toward substation ownership for hyperscale projects is increasing, and Black & Veatch has many solutions that allow the projects to stay on their targeted schedule.