← External Forces: Digital & Technology (all topics)
Data centres - electrical equipment demand
What it is
Data centres require dedicated substations, transformers, switchgear, UPS systems, busways and extensive cabling, with redundancy levels far above ordinary commercial buildings
They have become a distinct order category for electrical equipment makers rather than a subset of commercial construction
Impact on industries
- Fast-growing, high-specification demand that is independent of the utility capex cycle and pays for reliability rather than lowest cost
- Redundancy requirements multiply equipment content per megawatt against a conventional building
- Customers are well-capitalised and schedule-driven, so payment terms and order certainty are better than utility or government work
- Concentrated in a few metros and a handful of large developers, so the customer base is narrow
- Demand ultimately depends on the AI and cloud investment cycle, which is not an Indian variable