Smart data center site selection: Navigating challenges for reliable and efficient operations
Gene Hinkel
March 20, 2025
5 min read
00:00:00
/
00:00:00
In today’s digital economy, data centers power everything—from cloud computing and AI to financial transactions and streaming services. But choosing the right location for a data center is more than just finding available land. The wrong site can result in power reliability issues, regulatory roadblocks, and operational inefficiencies that cost millions in lost revenue.
GE Vernova’s Consulting Services specializes in helping data center operators avoid costly mistakes by leveraging deep expertise in energy markets, infrastructure, and long-term grid planning. A well-chosen site means lower interconnection cost, lower energy costs, higher reliability, and a sustainable operation.
In this blog, I’m going to get into why that matters.
What can go wrong?
The risks of suboptimal site selection
Selecting an unsuitable location for a data center can have long-term consequences. Some of the most common pitfalls include:
Power availability and reliability issues
A data center is only as good as its power supply. Many operators underestimate future grid constraints, leading to power shortages or unexpected infrastructure investments. For example, one developer selected a site based on initial grid availability—only to find out three years later that new projects on the grid had clogged the system, requiring costly upgrades. (Learn more about this project in the spotlight below.) With GE Vernova’s grid modeling, we forecast 20 years ahead, identifying sites with stable, long-term energy capacity.
Environmental and climate risks
From hurricanes to water scarcity, natural conditions impact operational reliability. Data centers require significant cooling, often making water access a key consideration. We recently helped a client avoid building in an area with high water demand conflicts, steering them instead to a site with a sustainable cooling solution. Our site analysis can also help rule out high-risk locations prone to flooding, earthquakes, and extreme weather.
Fiber and connectivity bottlenecks
A data center without strong fiber connectivity is like a car without gas. Operators need to be near major fiber routes for low latency and high-speed data transfers. Choosing a site too far from established fiber infrastructure can lead to excessive costs and project delays. Our team helps identify strategic locations that align with both energy and network demands.
Regulatory and zoning requirements
Different municipalities have varying regulations around large-scale power usage, environmental impact, and industrial zoning. Recently, a crypto-mining boom in the U.S. led to zoning crackdowns, forcing several data centers to relocate after initial approvals. GE Vernova’s regulatory expertise helps ensure that operators choose a site that aligns with current and future policies.
How we help data center operators choose wisely
At GE Vernova’s Consulting Services, we go beyond simple site assessments. We provide a holistic, data-driven approach that evaluates every factor necessary for a successful data center operation.
Our site selection services include:
- Power pool identification: Locating areas with the most favorable energy pricing and access
- Generation surplus analysis: Making sure there’s ample power capacity now—and in the future
- Curtailment analysis: Identifying risks of forced energy reductions due to grid congestion
- Locational marginal pricing (LMP) assessments: Helping optimize energy costs over time
- Site condition analysis: Evaluating land suitability for buildability, climate resilience, and access
- Power mix analysis: Confirming alignment with renewable energy goals and grid reliability
- Congestion and line analysis: Avoiding bottlenecks that could drive up operational costs
With decades of expertise in technology, economics, and energy infrastructure, GE Vernova's Consulting Services team helps hyperscalers, colocation providers, and independent operators identify the most appropriate locations for their operations. Our insights help ensure not just immediate viability, but long-term sustainability and scalability for the next 20 years.
Case study:
Preventing a costly mistake through proactive site selection
One of our recent clients, a large-scale data center developer, initially identified a location that seemed ideal—ample land, competitive energy pricing, and a growing fiber network. However, before moving forward, they engaged GE Vernova’s Consulting Services to perform a comprehensive site selection analysis.
Our grid forecasting models revealed that within three years, additional energy projects in the area would overload the transmission network, leading to transmission congestion and costly infrastructure upgrades. Additionally, our climate risk assessment flagged the site as vulnerable to severe flooding, which could compromise long-term reliability
By leveraging our generation surplus analysis and congestion studies, we identified an alternative site just three miles away that provided:
- Stronger grid stability with lower risk of future congestion
- Better fiber connectivity for high-speed data transfers
- Reduced exposure to environmental hazards
Had the client proceeded with their original location, they would have faced millions in unexpected infrastructure costs and unreliable power supply—potentially delaying operations by years. Instead, with GE Vernova’s expert insights, they secured a future-proof site that supports their long-term business growth
The bottom line:
Strategic site selection is a competitive advantage
With power demands surging, grid congestion increasing, and environmental risks on the rise, site selection has never been more critical. Making the wrong decision can lead to higher costs, regulatory headaches, and reliability challenges that jeopardize your operation.
At Consulting Services, we help data center operators take the guesswork out of site selection to help ensure reliable power, strategic placement, and future-proof solutions. Whether you're expanding an existing footprint or building a new facility, our consulting team provides the expertise needed to make the right choice.
Gene Hinkle
Executive, Power Economics and Software, GE Vernova’s Consulting Services
Gene Hinkle leads a team that provides techno-economic analyses and software solutions for integrated system planning. Since joining GE in 2002, he has played a key role in renewable energy integration studies, evaluating the impact of high wind power penetration on grid operations, reliability, and economics. His work has supported major power system studies, including projects for ISO New England and PJM that analyzed renewable variability, forecasting, and system reliability.
With prior experience at Navigant Consulting, Gene has contributed to grid planning, generator asset valuations, and system reliability studies. A member of CIGRE and IEEE, Gene has co-authored several industry publications, and has received prestigious awards, including the 2017 CanWEA R.J. Templin Award and the 2014 UVIG Achievement Award for his contributions to wind energy integration.
Contact Us
Want to learn more about our site selection offerings?
