Data centers to Northern Nevada: No signs of slowing
Data centers represent one of the hottest sectors of industrial development in Northern Nevada.
By Rob Sabo
Tuesday, October 24, 2023
A decade ago, the words “data center” weren’t often used round these parts.
Today, data centers represent one of the hottest sectors of industrial development in Northern Nevada. Apple kick-started regional data center development by investing more than $1 billion in its data center near Tahoe Reno Industrial Center. The facility is powered in part by a 19.9- megawatt solar installation near Yerington.
Apple was quickly followed by large data centers from Switch and Google. EdgeCore Digital Infrastructure recently announced plans to construct a 1.5 million square-foot data center at TRIC, and Novva Data Centers has a 20-acre campus with 180,000 square-feet of data center space. And earlier this month, data center park investor Tract of Denver purchased 2,200 acres of land at TRIC to construct the largest data center park in Northern Nevada.
It’s a burgeoning industry that shows no sign of slowing, especially in today’s technology-driven world. Northern Nevada’s affordable costs for power and land, coupled with a pro-business and regulatory climate and lack of corporate income tax, are just a few of the reasons why the data center industry has proliferated in the region.
Taylor Adams, president and chief executive officer of Economic Development Authority of Western Nevada, told NNBW that the nascent industry has cemented itself in Northern Nevada and is here for the long term.
“We have created with our regional partners an environment that is right for this use,” Adams said. “We are one of the premier locations in America for data centers, and we are so excited to see the industry growing here.
“Data centers bring high-paying jobs, and job counts are a little lower,” Adams added. “Data centers are a great piece of business because they allow us to continue to grow our tax base and create economic growth in the region without the need for tremendous employee loads.”
Tract currently has the most ambitious plans for data center development in Northern Nevada. Its land investment will eventually accommodate a wide range of end-users, and its power requirements — Tract will bring 2 gigawatts of power to its data center park — are enough to power a medium-sized city.
Grant van Rooyen, chief executive officer and managing partner of Tract, unpacked the many attributes that make Northern Nevada an ideal location for data center facilities. State tax incentives, favorable power pricing rates, proximity to fiber routes and a great workforce are all fundamental to attracting data centers to Northern Nevada and Tahoe Reno Industrial Center, van Rooyen said.
“Interstate 80 is important because that’s where all the long-haul fiber is in this area. Data centers that can’t be connected to at-scale material connectivity starting at the fiber level are not particularly useful, so Northern Nevada is very well located in respect to fiber,” van Rooyen said.
“It’s also 3 milliseconds away from the Bay Area for data transmission. There’s much better power pricing, and the development environment from a regulation perspective is far more predictable for the companies that are in the business of vertical construction and delivering data center facilities.”
New data center hubs continue to proliferate in many areas throughout the U.S., and while the Greater Reno area may not have been on the data center roadmap much more than eight years ago, van Rooyen said, new locations quickly become “ordained” for data center development when they have all the right characteristics. Northern Nevada checks all those important boxes.
“Northern Nevada, and specifically, Storey County, have a wonderful set of attributes for data center development,” he said. “That is attractive today, it will be attractive tomorrow, and as long as public policy at the county and state level remains pro development and pro business, the use case will be attractive in this area for a very long time.”
Data centers have tremendous power requirements, and NV Energy was early in positioning Tahoe Reno Industrial Center to accommodate large power users, said Jeff Brigger, director of development and asset manager for NV Energy.
“We developed a pretty comprehensive transmission network plan for that entire industrial center,” Brigger said. “That plan has spurred a lot of this additional growth in the data center industry.
“We meet regularly with (Storey County) to identify high growth areas early on and make the plans we need to accommodate growth and support economic development throughout the state,” he added.
Those infrastructure investments are reaping current dividends, and future improvements to the broader statewide power transmission network will further improve reliability and capacity in Northern Nevada, as well as open up new areas for potential industrial and data center growth and renewable energy transmission. NV Energy’s Greenlink initiative will upgrade power transmission capabilities in Northern Nevada and support additional power load demands throughout the region.
The western portion of the two-phase Greenlink initiative will bring a 525 kilovolt transmission line 350 miles from Las Vegas to NV Energy’s Fort Churchill Generating Station just outside of Yerington, while the northern portion will do the same running 235 miles from Ely to Fort Churchill. The first line is scheduled for completion at the end of 2026, while the second is expected to be in service in late 2028.
From Fort Churchill, NV Energy will run three new 345-kilovolt lines northward. Two lines will terminate at Tahoe Reno Industrial Center, while the third will run to Reno to support additional load growth in the Truckee Meadows, Brigger said.
“This investment will support the entire Northern Nevada region,” Brigger said. “It’s really the lynchpin in developing the infrastructure we need.”
Jeff Sutich, executive director of the Northern Nevada Development Authority, told NNBW that NV Energy’s infrastructure investments will likely lead to additional data center development opportunities in Fernley, Silver Springs and Yerington.
“They are creating these big power corridors,” Sutich said.
Data centers also historically have required a great deal of water to cool their facilities. Companies at Tahoe Reno Industrial Center use effluent water from a pipeline connected to the Truckee Meadows Water Reclamation Facility at the east end of Sparks, said Austin Osborne, Storey County Manager.
And emerging data center cooling technologies will also enable lower water usage, said Sutich.
“A lot of companies are moving toward air cooling, and Nevada is perfect for that because we get such cool night time air,” he said. “It lowers the power and water constraints because you can bring that cold night time air into the data center to cool it off. That opens up the whole region when it comes to water (usage).”
One more ancillary benefit of Northern Nevada’s data center industry is that it’s highly recession-proof. Regardless of the direction of the national economy, the region’s data centers will be up and running 100-percent of the time and staffed by well-compensated technical workers.
“Regionally speaking, these types of uses are bringing high-paying, long-lasting careers to Northern Nevada that didn’t used to exist,” Storey County’s Osbourne said. “Tesla, Google, Switch and companies like them have transformed Northern Nevada forever and have enabled Northern Nevada to be somewhat immune from the boom-and-bust economy that once defined this area by diversifying and advancing our economy and ultimately the quality of life for Northern Nevadans.”