Data centers in the Paris Region: constrained growth?

25 March 2016ContactDaniel Thépin, T. Vinette (IAU îdF), Olivier Paugam (Paris Region Prefecture)

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Daniel Thépin

As the invisible storage centres of the digital society, data centers are essential to the e-economy. Because of the numerous benefits it provides as a location, the Paris region has one of the highest concentrations of data centers in Europe. However, to identify new opportunities for hosting more data centers, the Paris Region must anticipate the demands of their future development.

Data center: behind this rather obscure term very little-known to the general public, lies the infrastructure that has been indispensable to the development of the Internet and, more broadly, of what is known as “the digital economy”.   
This does not mean that it is a recent concept, as data centers are closely linked to the history of computing and information technology (IT). Originally, however, these facilities were referred to as data-processing centers and were mainly set up by large organisations such as banks, IT manufacturers, telecom operators, research centres and government departments, which built them to meet their own needs. With the development of the Internet, the number of applications requiring high-performance and secured data storage installations has multiplied. Moreover, the growing complexity of standards and the increasing need to integrate a great diversity of businesses (such as electric power, air conditioning, service networks, security, etc.) have led more and more companies to entrust the hosting of their data to specialised hosting providers. These have built data centers that are ultra-secure IT centres connected by telecommunication networks designed to host data, applications and hardware belonging to third-party companies. In a way, along with telecommunication networks, data centers are the tangible reality of the virtual economy.

A sixfold increase in Internet data volume by 2020

Needs linked to use of the Internet have been increasing exponentially. Gartner, an IT research and advisory company, estimates that the volume of data available on the Internet in 2015 amounted to eight zettaoctets1. This is equivalent to the capacity of 250 billion DVDs or to a music library with close to 300,000 songs (stored in the mp3 digital audio format) for each of planet Earth’s seven billion inhabitants.
IDC, a provider of IT market intelligence and advisory services, expects this figure to increase sixfold by 2020 (to 44 zettaoctets), notably due to a surge in cloud computing services (see the glossary) and to the multiplication of the number of objects connected to the Internet (see the glossary).
In view of this, the number of data centers in the world is likely to increase very sharply, regardless of the progress made by processors and storage media.
In 2014, the www.datacentermap.com website listed 3,200 data centers across the world (exclusively colocation facilities provided by hosting providers), 40% of which in the United States alone. With 138 colocation data centers, France was ranked fourth in the world, behind the United Kingdom with 207 sites and Germany with 168 sites.

The Paris region: an attractive location for data centers

Paris Region is the Capital region named “Ile-de-France” in French. This area concentrates 12 million of inhabitants, 6.1 million of jobs and 31 % of the national GDP. The Paris Region is home to about one third of French data centers, which makes it the third or fourth-ranking data center location in Europe, behind London and Frankfurt and just ahead of or behind Amsterdam (depending on the estimates), while Madrid comes in fifth.
Today, the Paris region is an attractive location for data center operators for several reasons: first, its economic weight; second, its geographical position, which shelters it from the main natural risks; third, good availability of land away from flood-prone areas; and fourth, high quality electricity supply at attractive prices (ranked 10th among OECD member states for industrial rates2).    

Most data centers are located in the north of the Paris region’s dense core area   

At first sight, the data centers in the Paris region are seemingly scattered across numerous sites. But in terms of the surface area of hosting capacity, they are actually located in the heart of the Paris metropolitan area, particularly in the northern part of this core area.
Three major territorial areas can be distinguished: the core city of Paris; the La Défense CBD3 and its surrounding municipalities; and, especially, the territorial area known as Plaine Commune (made up of the towns of Aubervilliers, Épinay-sur-Seine, L’Île-Saint-Denis, Pierrefitte-sur-Seine, Saint-Denis, Stains and Villetaneuse).
Today, Plaine Commune features the highest concentration of data centers in Europe. They started locating there in the mid-1990s. There are now some 15 of them representing a total surface area of 180,000 sq. m. The reasons for this success are this territorial area’s specific characteristics, which also summarise the essence of the site selection criteria that must be met when deciding where to locate a data center, namely: the pre-existence of an electric power supply and distribution system originally installed to meet the needs of heavy industry; good access to transport infrastructure; direct access to major Internet backbone networks; the availability of land at affordable prices and situated outside natural risk zones; proximity to high concentrations of potential customers for data centers, notably major digital industry players located in the Plaine Saint-Denis territorial area.

A degree of concentration that has reached its limits

Over the past 20 years, most new data centers (belonging to hosting providers) in the Paris region have been installed in the northern part of the inner Paris suburbs, especially in the territorial area known as Plaine Commune. Today, this area is close to suffering from a capacity crunch in terms of both electric power supply and land availability, so this concentration of data centers has now reached its limits. Moreover, if this situation were to last it could raise the longer term issue of a possible imbalance between the north and the south of the Paris region. This would be unacceptable because the growing digitisation of the economy has turned the supply of data centers into an important factor for local development.

Is a data center a useful local development tool?

By its very nature, the activity of operating data centres is performed remotely, but it cannot totally overcome the constraint of the need for relative proximity to users. This constraint has proved especially important in the case of equipment housing, which requires that customers should be able to work on their equipment at very short notice, and, to a lesser extent, regarding the provision of data replication services (see the Glossary) because of the latency constraint.  
Furthermore, data centers are often nodal points of telecommunication networks and thus help enhance the digital connectivity of the territorial areas in which they are located.
Finally, they have local knock-on effects, which are more difficult to measure, arising from a need for closeness, felt more particularly by small and medium-sized enterprises (SMEs) that wish to outsource the storage of their IT data or applications.

The beginning of a rebalancing in favour of the southern Paris region

Against this background, the recent actual or announced location of new data centers in the towns of Vélizy (78), Vitry-sur-Seine (94), Magny-les-Hameaux (78) and, very shortly, Lisses (91), to mention just a few examples, confirms the trend towards a redeployment of such facilities to the southern half of the Paris region. This process has been strengthened by the restructuring of the data center market. As a result of new business developments and the rise in cloud computing services (see the glossary), the boundary between private data centers (owned by companies, institutions, etc.) and colocation data centers (owned by data hosting providers) is becoming increasingly blurred.  
Telecommunications operators, for example, after having redeveloped and modernised their “historic” data centers and after having often reduced the number of sites, now also offer companies their hosting services, which are identical to those offered by hosting providers.   
In the medium term, the redeployment of the hosting capacity of data centers towards the south of the Paris region presents a dual challenge: first, to complement the existing sites, which are unlikely to be able to absorb the expected increase in demand for hosting capacity; second, to facilitate the local development of a digital economy that also offers a reasonable degree of proximity.

An essential prerequisite: the availability of strong electrical power

In addition to the requirement for the lowest possible rate of exposure to natural risks, there are numerous other site selection criteria, as we have seen, including site accessibility, the quality and cost of telecommunication infrastructure, etc. However, by far the most important criterion is the availability on a potential hosting site of a strong, secure and economical electrical power supply.  
Among the numerous other factors that need to be taken into account for site selection are the availability of a competitive market and operators’ environmental concerns, which lead them to seek an energy mix that gives renewables an increasing share.

The average size of data centers has increased tenfold over the last decade

Data centers’ energy needs are all the greater because their average size has been growing steadily over the last ten years, from 1,000 sq. m. to 10,000 sq. m. in the case of the most recent facilities.
Thus, a large facility with a usable floor space of over 9,000 sq. m. built in the town of La Courneuve consumes around 65 MW (megawatts) per year, i.e. a level equivalent to that of a town with 50,000 inhabitants. Electricity consumption in the town of Aubervilliers, in which six data centers have been located, has doubled. And the electrical power consumption of the 14 facilities in the Plaine Commune territorial area is equivalent to that of a city with 250,000 inhabitants.
Another amplifying factor is the fact that data centers tend to overestimate their needs. In anticipation of their growth in size, they reserve some of the power-generating capacity of the ERDF public electricity distribution network. They sometimes book power capacity far greater than their real consumption levels. This over-booking is a problem because ERDF can no longer market such power-generating capacity, which has been reserved at little cost and may not necessarily be used. Some people have criticised these practices, which have also proved to be a way of preventing competitors from locating nearby because of a lack of available power-generating capacity.
Thus, data centers have a great impact on local electrical power consumption, so much so that they are likely to lead to structural imbalances.
In the Paris region, given the expected increase in the number of data centers and the need for their more diffused deployment, they will weigh more and more heavily on electricity distribution grids.

Future rise in power consumption: the need to adapt the electrical power grid

According to the Regional Environment and Energy Agency (the DRIEE), by 2030 data centers alone will account for a quarter of the increase in the power requirements of Greater Paris, i.e. 1,000MW out of an estimated total of between 3,000 and 4,000MW (a 20% increase).
This expected rise in consumption due solely to these infrastructure facilities is significant: it amounts approximately to the requirements of a metropolitan area with one million inhabitants. It will mainly impact the region’s electricity transmission and distribution networks because the region imports more than 90% of the power it consumes. Meeting this overall power demand, and notably the specific demand of the new data centers, will therefore require structural changes to the
In cooperation with EDF (France’s electricity utility), RTE (France’s electricity transmission operator) and the DRIEE (the Regional Environment and Energy agency), ERDF (which manages France’s public electricity distribution network) has started major works aimed at adapting its distribution network, notably by building facilities that provide the appropriate interfaces between the transmission and distribution networks, namely the source substations.

There are now some 160 facilities of this kind in the Paris region.
For historical reasons, the network of source substations is denser in Paris and its inner suburbs, given that each substation caters to the needs of 100,000 inhabitants. The network is obviously less dense outside the dense core of the Paris metropolitan area, which means that priority is being given to building new facilities in such areas.   
Regarding source stations alone, by 2020 it is planned to refurbish 50 of them and to build eight new ones. Such adaptations of the power distribution network are designed to respond to the overall development of electrical power consumption. This means the works take into account trend growth forecasts relating to pre-established uses of power spread over relatively wide geographical areas.
Under such a scheme, data centers present a number of challenges because of their characteristics. A data center operator has to be capable of using a site with a surface area of a few thousand square metres to supply a quantity of power equivalent to the electricity consumption of a medium-sized town. Moreover, the power thus delivered must meet specific requirements in terms of quality and availability. The answer lies in the construction of special structures featuring dedicated and redundant equipment.

Anticipating the need to provide additional long-term infrastructure capacity

The issue of where to locate new source sub-stations is all the more sensitive as these are big facilities with large surface area footprints: 5,000 sq. m. in urban areas. And the time needed to build them is lengthy: up to 10 years may elapse between the decision to build a new source substation and its commissioning (whereas the lead time to build a data center is only three years).
Given that these lead times are the absolute minimum and given the specific requirements of data centers, the main question is: can the development of available electrical power match the pace at which the new data centres are established?    
Some parts of the Paris region can still increase their infrastructure capacity, as evidenced by the ongoing construction of a major site in the town of Lisses (Essonne county). However, other parts are already at nearly full capacity, such as Plaine Commune, whose capacity seems to have reached a limit which should, however, be extended thanks to the planned opening of a new source substation in Aubervilliers at the end of 2017.   
Ultimately, it will be necessary to rely on well identified new locations featuring affordable land, high standards of security and sufficient pre-installed electrical power generation capacity or capacity that can be mobilised within time limits suitable for location decision-making.  
This can only be done successfully by involving the various regional planning stakeholders, particularly local players. Data centers pose a challenge in terms of electrical power capacity. In order to meet this challenge effectively, it is necessary to have a very precise view of future possible location sites.

A fresh look at how to promote data centers

Although data centers are essential to the development of the digital economy, they are still viewed negatively as inaesthetic, energy-intensive, sources of noise pollution and poor direct generators of new jobs. As a result, the areas in which they are located rarely promote or highlight them.
And yet, there are several solutions that could be promoted to improve perceptions of data centers: the redevelopment of brownfield sites; making beneficial use of heat in local heating networks, a solution too rarely implemented in the Paris region; incorporating data centers into local development models; and finally, efforts to promote data centers at a regional level, because although the Paris region is a leader in hosting data centers, it certainly does not make this sufficiently known to the world.

GLOSSARY
Cloud computing: consists of the remote use of IT resources that you are not equipped with and do not even own.
Connected object (Internet of things): any object connected to the internet (a computer, a home, a household good, etc.) that can be programmed remotely (identification by IP address) or can be self-programmed.
Source substation: a facility that provides an interface between the electricity transmission and distribution networks.
Data replication: reproducing data on another server that is capable of instantaneously taking over in the event of a fault in the first application. This backup procedure is also known as mirroring. 

1. One zettaoctet = one trillion gigaoctets or 1 000 000 000 To (teraoctets).
2. International Energy Agency: 2012 data.
3. Central Business District