[Nowhere to Go IDC]① "Data Centers Are NIMBY Facilities"... Misunderstandings and Truths

Future Investments Bruised by NIMBY Phenomenon
It's Not That They Don't Build, It's That They Can't

Editor's NoteWhen you look up the word 'NIMBY' in the Britannica dictionary, it is defined as an acronym for 'Not In My BackYard.' It refers to collective actions by local residents opposing the installation of undesirable facilities. Typically, this includes prisons and waste landfills, but Internet Data Centers (IDCs) also struggle to find acceptance due to perceptions that they consume massive amounts of electricity and generate electromagnetic pollution. The demand for IDCs is skyrocketing annually with the rise of artificial intelligence (AI), cloud computing, and the metaverse. Although investments are expanding every year, suitable locations for construction are scarce. This article examines the current status of data centers nationwide and reports from the field to explore how the NIMBY phenomenon surrounding IDCs, which serve as fundamental infrastructure for future industries, can be eliminated.

[Asia Economy Reporter Kang Nahum] As the importance of digital transformation and data grows in the industrial sector, the value of data centers, often called 'data hotels,' is also rising. At the same time, as data demand increases, the number of data centers is rapidly growing, but most are concentrated in the Seoul metropolitan area, raising concerns about data safety, security, and power grid issues. While decentralizing data centers to provincial areas is urgent, many local residents oppose them due to the ingrained perception that 'data centers are undesirable facilities.' Moreover, as a technology-intensive industry, the employment effect is limited, making decentralization even more challenging.

Data Centers Concentrated Only in the Seoul Metropolitan Area and Major Cities... Vulnerable to Disasters

As seen in the 'Kakao incident' on the 15th, if an accident occurs at a data center, various services essential to daily life come to a halt. Because servers are concentrated in one location for management efficiency and cost reduction, power outages or fires can cause large-scale communication failures. Particularly, with 60% of data centers clustered near the Seoul metropolitan area, the problem becomes more severe. Disasters such as fires or earthquakes could lead to data loss and internet delays, potentially paralyzing life and communication infrastructure. Additionally, the burden of constructing additional power transmission and distribution infrastructure and the risk of grid congestion are also concerns.

Nevertheless, the reason for the concentration of data centers in the Seoul metropolitan area is that most domestic data centers operate as co-location facilities, leasing infrastructure to multiple companies rather than being used privately. The Pangyo data center of SK C&C, which caused inconvenience to nearly all citizens due to a recent fire, is a co-location facility serving clients like Kakao and Naver.

Co-location facilities tend to be built mainly in the Seoul metropolitan area because they need to be easily accessible for tenant companies and close to convenience facilities. Industry insiders explain that if tenant companies and data centers are located far apart, operational difficulties may arise, and there could be challenges in securing resident and skilled personnel.

Furthermore, in the financial sector, which values ultra-low latency data times under 1 ms for stock trading and other purposes, physical proximity is critical, making the concentration of data centers in the Seoul metropolitan area a key factor.

An industry insider said, "Most domestic data centers operate as commercial data centers (co-location), so they cluster in major cities where transportation and communication infrastructure are well established, and tenant companies can directly maintain and manage servers. There is also a risk of losses if a data center is built outside the metropolitan area but fails to secure tenants, so the metropolitan area is preferred."

Building Data Centers in Provincial Areas Hampered by 'Undesirable Facility' Perception

To solve the problem, major companies could operate their own data centers and decentralize them to provincial areas, but this is not easy. Although data centers filled only with PCs seem far from pollution, they are classified as one of the 'undesirable facilities,' and local residents often oppose them. There are two main reasons why data centers have gained the perception of being undesirable facilities: the stigma of being 'electricity guzzlers' and environmental pollution controversies.

Experts argue that the perception of data centers as undesirable facilities is a clear 'misunderstanding.' While it is true that data centers consume more electricity than typical office buildings, their share of total industrial power consumption is only around 2%. They also explain that with the recent spread of electric vehicles and the installation of charging stations everywhere, the power consumption of a medium-sized data center is comparable to that of these charging stations.

Professor Na Yeonmuk of Dankook University's Department of Computer Engineering said, "A typical medium-sized data center is about 1000 kW, and considering that a Tesla V3 Supercharger for electric vehicles charges at about 250 kW, the power consumption is similar to charging three or four vehicles."

Regarding concerns about electromagnetic waves and heat island effects caused by supplying power to thousands or tens of thousands of servers, experts say there is no clear evidence. Inside data centers, servers and storage devices are mounted on racks, and considering the power consumption of computing equipment, electromagnetic wave emissions are minimal, similar to laptops or PCs used continuously in households.

Moreover, each computer room is designed without windows for cooling purposes and is separated by double walls, so even if minimal electromagnetic waves exist, they rarely escape outside.

Professor Na said, "Most IDCs are in modern building forms and are no different from the buildings lined up on Teheran-ro. The view that data centers are environmentally harmful facilities is a clear misunderstanding. They should be seen as core facilities that provide non-face-to-face services and useful information in the digital age, enhancing convenience in daily life."