[No Place for IDC] ⑤ Kakao Siheung IDC Invested 4 Years Ago... Resident Opposition Obstacles

Concerns Over Delays Despite Early Investment Decision in Siheung IDC
Ansan IDC to Complete Next Year... Smooth Progress with Full Local Government Support

Editor's NoteWhen you look up the word 'NIMBY' in the Britannica dictionary, it is noted as an acronym for 'Not In My BackYard.' It refers to collective action by local residents opposing the installation of undesirable facilities. Typically, this includes prisons and waste landfills, but Internet Data Centers (hereafter IDC) also struggle to find acceptance due to perceptions that they consume enormous amounts of electricity and generate electromagnetic pollution. Demand for IDCs is skyrocketing every year with the growth of AI, cloud computing, and the metaverse. Although investments are expanding annually, suitable locations for construction are scarce. Through a nationwide survey of data centers and on-site reports, we examine IDCs and diagnose how to eliminate the NIMBY phenomenon surrounding IDCs, which are fundamental infrastructure for future industries.

The Kakao 1st Data Center, located on the Hanyang University ERICA Campus in Sangnok-gu, Ansan-si, Gyeonggi-do, is currently under construction with the goal of starting operations in January 2024.
[Photo by Kakao]

[Asia Economy Reporter Yuri Choi] On the 8th, a protest against high-voltage power lines was held in front of the Baegot 1-dong Administrative Welfare Center in Siheung-si, Gyeonggi Province. Dozens of local residents, including an emergency response committee formed by residents of Baegot New Town, gathered. Holding banners and placards reading 'Immediate Withdrawal of High-Voltage Power Lines' and 'Strong Condemnation of KEPCO Threatening Residents' Lives,' the residents succeeded in canceling the briefing session on the power cable construction project that Korea Electric Power Corporation (KEPCO) had planned that day. Due to residents' opposition, Siheung City issued a construction suspension order to KEPCO, which refused to accept it and filed an administrative lawsuit, escalating the conflict.

As KEPCO's power cable construction project falls into uncertainty, innocent victims include Kakao. Following the recent 'Kakao blackout incident,' Kakao urgently needs to build its own data centers. Along with the Ansan Data Center scheduled to open next year, completing the Siheung Data Center is a top priority. However, if the power lines themselves cannot be installed, operating the data centers will be impossible, causing disruptions to stable operations.

Kakao's Second Data Center in Siheung Faces Backlash from Residents Opposing High-Voltage Transmission Lines

The transmission line completion project connecting Sin-Siheung and Sin-Songdo is worsening, causing concern for Kakao as well. Kakao plans a second data center with a power capacity of 100 megawatts (MW) on Seoul National University Siheung Campus. A KEPCO official stated, "Currently, the load on the Siheung substation exceeds its supply capacity, necessitating the prompt construction of a new substation. This is to prevent overload when large-scale businesses or complexes enter Siheung. If construction does not proceed, there could be issues with the stability of power supply."

Kakao plans to begin construction of the second data center in 2024, when the first data center becomes fully operational, aiming for completion in 2026. Administrative procedures such as urban planning permits and detailed site selection remain, so progress could be hindered by resident opposition. Despite having decided on investment early, obstacles have emerged from the project's initial stages.

Kakao decided to pursue data center construction in 2018. Although its revenue first exceeded 2 trillion won, operating profit margin was only 3% due to all-around investments, yet it committed to large-scale investment. This indicates that infrastructure investment was considered alongside business expansion. However, with a minimum of 4-5 years required from planning to operation, a fire occurred, and due to inadequate backup systems, the Kakao blackout incident ensued. While responsibility for system deficiencies cannot be avoided, concerns arise that delays caused by local opposition to essential data centers for platform companies could lead to repeated blackout incidents.

Ansan City Actively Attracts First Data Center... Economic Benefits Expected

In contrast, the Kakao first data center, actively attracted by Ansan City, has begun construction and aims to operate by January 2024. The city promised full support for data center attraction, and Kakao engaged in investment cooperation including industry-academia facilities.

To attract the data center, Ansan City applied for site designation in March 2020 and received approval from the Ministry of Land, Infrastructure and Transport. A task force (TF) for data center attraction was formed to promote related administrative support and investment cooperation. Kakao decided to invest 400 billion won to build a data center and industry-academia cooperation facilities at Hanyang University ERICA Campus in Ansan. Ansan City expects economic effects from the facility attraction including ▲production inducement effect of 803.6 billion won ▲value-added inducement effect of 371.5 billion won ▲job creation effect of 2,700 people.

The Kakao first data center is planned to be a mega-scale facility capable of operating over 100,000 servers. The total data storage capacity for 120,000 servers will reach 6 exabytes (EB). Through this, Kakao expects its own disaster recovery (DR) stage to reach the hot site level (a stage where a system identical to the main site is operated, second only to a mirror site with equivalent facilities and resources to the main site).

Particularly, the focus is on disaster response capabilities to prevent power outages even in case of fire. The fire response scenario is divided into four stages to minimize the possibility of power interruption. The firefighting system proceeds in the order of ▲activation of internal fire extinguishers in the uninterruptible power supply (UPS) room and battery room panels upon spark or temperature rise ▲activation of fire extinguishing gas in the battery room ▲sectional shutdown and cooling water spraying in the fire area ▲fire department firefighting. Additionally, a customized fire response manual is jointly developed with fire authorities, and regular joint fire drills are planned. Kakao will bear all costs necessary to prepare for firefighting operations.

Preparations are also underway to ensure no power supply gaps under any circumstances. Power of 40,000 kilowatts (kW) is supplied from the Nam Ansan substation, and if the main power supply is unexpectedly interrupted, backup power will be used via the Seongpo substation. To prepare for line issues, a dedicated line between the first and second data centers will be installed at a cost of 60 billion won.

Hong Eun-taek, CEO of Kakao, emphasized, "Above all, we will strive to expand various budgets such as infrastructure and manpower," adding, "We plan to build disaster prevention facilities such as fire protection and seismic resistance more safely, learning from this incident, in our own data centers."