The Next Generation

Debunking myths about the future of telecom hotels


There is a lull in the fast-paced development of telecom hotels due to the severe downturn of the stock market—particularly technology stocks—and the lack of capital available to fund technology-related buildings.

Consequently, engineers can take a breather to look back and examine what was learned during this period, when "speed to market" and system reliability requirements were the mantras, and construction budgets held a secondary position. Because the next generation of critical facilities will require even more tenant flexibility and have to clear higher economic hurdles, mechanical and electrical engineers will be challenged to develop an increasingly flexible and cost-effective support system for these critical facilities.

The developers of the next generation of telecom hotels will face many new obstacles. Besides being more reluctant to take the risk of increasing their equity participation and finding financing more difficult, developers will have to tackle a poorer quality of credit for a typical tenant in a telecom hotel due to the stock market's demise and deteriorating business fundamentals. In addition, most local electric utilities are not equipped to extend their transmission and distribution networks to accommodate the large requirements of telecom hotels.

Finally, utilities have begun requiring significant surcharges to deliver power which exceeds the demand of a typical office building (5 to 10 watts per square feet).

When one adds the need for being close to a fiber hub and the need for building flexibility to accommodate multiple uses, the engineer faces an array of obstacles different from the past telecom hotel boom.

The most significant of these is the need for a complete reevaluation of proposed mechanical and electrical systems to ensure that the design addresses the financial hurdles of the developer. In other words, the engineer is challenged to provide reliable and flexible systems while minimizing the financial impact on the developer and tenants.

This quandary can be simplified if the engineer debunks a myth that has arisen around the telecom hotel construction boom: the assumption that all telecom hotels need 200 watts per square foot from day one. The following will illuminate why this is usually not the case. Telecom basics

There are many terms used interchangeably with telecom hotels: carrier hotels, carrier hubs, co-location centers, co-hotels, data centers, cyber centers or server farms, to name a few. These facilities house the computer servers for internet service providers (ISPs) and the switching devices required to route voice and data traffic between local and long-distance carriers.

The characteristics of a telecom hotel are rather specific and tend to be different from a traditional commercial building in the following ways:

  • Higher ceiling and floor-to-floor heights.

  • Higher structural floor-loading capabilities to accommodate racks, equipment and cable trays.

  • Proximity and connectivity to multiple providers of fiber-optic cables.

  • Extensive electrical power densities with full redundancy on the distribution system.

  • Backup and emergency generators.

  • Fuel oil tanks to supply 24 to 72 hours of backup power.

  • Continuous HVAC (24/7) with built-in redundancies (N+1).

  • High level of security.

  • Large unobstructed and contiguous vertical and horizontal pathways for fiber, copper, electrical and mechanical conduit and piping.

  • A stable indoor environment with respect to temperature, humidity and indoor-air quality.

  • Enhanced life-safety and fire-protection systems.

  • Enhanced security systems.

  • Backup domestic water supply.

Telecom analysis

Since the servers and routers that are housed in the telecom hotels connect thousands of end-users, a momentary service disruption can result in the loss of millions of dollars of revenue. Thus, the developers and occupants of telecom hotels spend hundreds of dollars per square foot to ensure the reliability of the mechanical and electrical infrastructure.

The power from the electric utilities is generally very good and it is not unusual to have an average availability of 99.98 percent across the utilities transmission and distribution network.

However, this high level of availability still means that power is not available for nearly two hours per year. Although this level of interruption is acceptable for most residences and commercial customers, it is unacceptable for telecom hotel operations. The facility potentially connects perhaps thousands of individuals and companies who, if an interruption occurs, will all lose power. The economic impact can be extremely significant.

The mechanical and electrical infrastructure of these facilities is often designed to provide six sigma of availability (99.9999 percent). Although this level of availability results in approximately thirty seconds of downtime per year, it is very costly. The mechanical and electrical infrastructure costs to ensure six sigma can be over $400 per square foot.

The typical electrical infrastructure will contain two separate feeds from the electric utility which are backed up by several diesel generators. The generators are commonly found in a parallel redundant configuration where one extra module is provided to allow for planned maintenance and prevent a single point of failure in the system (N+1). For example, if the critical load for a facility requires 4 megavolt-amperes (MVA) of power, the N+1 redundancy can be achieved with three 2-MVA diesel generators. For the telecom hotel, a complete engineering analysis is required to ensure there is not a single point of failure within the mechanical and electrical infrastructure.

To ensure the six sigma of availability, it is not unusual to see generators, chillers and pumps configured for N+1 or N+2 redundancy. Also, the electrical distribution may be configured in a 2N arrangement for the uninterruptible power supply, power distribution units, branch panels and circuits that are closer to the actual critical load (servers and switches).

This hardened infrastructure costs millions of dollars and can consume a considerable amount of space. In fact, it is not unusual to have a telecom hotel in which the space for the mechanical and electrical infrastructure is nearly equal to the useable space dedicated for the servers and switches. Thus, it is important for the engineer to think critically to minimize the cost of providing the desired level of availability and maximize the area of the revenue-generating space.

The enormous cost to harden the telecom facility is compounded by the charges from the local electric utilities to bring large load densities to the site, especially because the electrical transmission and distribution systems are regulated.

Generally, the local utility is obligated to provide the transmission and distribution (T&D) infrastructure to a building, and the cost for the infrastructure is included in the utility's electric rate. For a typical commercial building, this translates into the utility bringing 5 to 10 watts per square foot to the building. How many watts?

In truth, electric utilities were caught somewhat off guard by the telecom hotel boom and the request for 200 watts per square foot of power because most T&D networks do not have the capacity to handle the demand.

Moreover, since the T&D networks are regulated, many utilities require prior approval from the local regulating authority before system upgrades can occur. Thus, the local utilities are hard pressed to upgrade their systems in a time frame acceptable to the developers and the telecom hotels.

System upgrades, costs to harden the facility from the local utility and potential schedule delays place the engineer in a difficult position. How is it possible to ensure reliability, contain costs and meet schedules?

The first generation of telecom hotels taught us that the buildings may require 200 watts per square foot, but it would take a minimum of several months for the load to materialize. This fact provides an opportunity for the electrical and mechanical infrastructure to "ramp-up" over a period of time.

The consulting engineer needs to take a leadership position to unite the interests of the developer, tenant and local utility and to "sell" this ramp-up concept. Case in point

A recent project dealt with the same problem. It involved building the infrastructure to handle high-volume electronic stock trading. It became important to demonstrate the difference between the tenant's current data centers with what the new facility would require in terms of power to the utility—who wanted to charge the tenant $800,000 upfront to supply the power requested. This fee is actually a shift in utility positioning from the past, and is basically made by the utility because they do not believe the 200-watt myth's time parameters.

They believe—rightly—that they should not bear the costs to bring that much power to a location if the location is not going to really use it. Therefore, understanding the time parameters of a 200-watts-per-square-foot request is extremely important if the engineer is to be a successful myth breaker and leader.

In this case, an engineering review of the current data center loads was conducted to reach an agreement with the utility. The tenant wanted an infrastructure capable of handling 200 watts per square foot and was not happy to hear about the $800,000 upgrade charge and its impact on the project schedule. Our analysis indicated the tenant would consume a minimum of 92 watts per square foot on the day the facility opened —a far cry from 200.

It was agreed that the utility would upgrade its service over a period of several months to accommodate the new high-density servers the tenant intended to deploy for the 200-watt density. This compromise resulted in a 90-percent reduction in the fees charged by the utilities and a project that remained on its fast-track schedule.

Power requests call for a degree of rationality, and it is the consulting engineer who must bring to bear on what is actually being asked for by the parties involved. Consider, then, negotiating a time frame for increasing power usage on a ramp-up basis. As development and occupancy phase in, usage grows incrementally. A considerable margin of the electrical capacity reserved upfront will not be used until later in the lifespan of the property.

The fact is, engineers today are faced with tremendous demands due to the explosion of broadband access and data traffic. In an era where change happens daily, engineers must implement the most efficient and flexible infrastructure solutions available.

With a focus on delivering flexibility and consistency, engineers must work with developers to control the complexity, costs and solutions associated with today's telecom hotels.

Fundamentals of a Typical Internet Facility

14 to 16 foot ceiling heights
200 to 300 pounds per square foot floor loading
Connectivity and proximity to fiber
Flexible and redundant HVAC
Extensive power (200 watts per square foot)
Back-up power (critical and essential loads)
Emergency power (life-safety loads)
Fuel-oil storage
Indoor conditions: 72° F, 50-percent relative humidity
Unobstructed and contiguous vertical and horizontal pathways
Clean-agent fire-suppression and pre-action sprinkler systems
Water storage tanks


  • It can reduce the initial capital outlays, which helps financing.

  • A centralized system with the proper redundancy can be more reliable than each tenant having their own dedicated system.

  • The capital outlay from the developer and tenant can be increased over time as the actual load materializes. Moreover, the central plant can usually be smaller because it can take advantage of the collective diversity of each tenant.

  • The modular design allows for easy expansion.

  • If an engine generator is utilized as the prime mover, it can be equipped with dual-fuel capabilities (gas or oil). This helps increase the reliability of the system and reduce operating costs due to gyrating fuel costs.

  • It may help accelerate the project schedule because the project does not need to wait for the electric utility.

Making Your Own Power

On-site power generation is another strategy the consulting engineer should consider for the next generation of telecom hotels. In some locations, the electrical transmission and distribution network can be too costly to upgrade even if the ramp-up strategy is utilized.

In the first generation of telecom hotels, it was not unusual for each tenant to demand its own dedicated mechanical and electrical infrastructure. However, since these tenants no longer have the available capital or high-flying stock prices, they are now amenable to the consideration of shared support systems. This presents an opportunity for the consulting engineer.

The power plant depicted below is a single-line schematic representation of a modular co-generation plant that can satisfy the flexibility requirements for the next generation of telecom hotels. The gas turbine drives an electric generator. A heat-recovery steam generator captures waste heat from the turbine and produces steam. This high-pressure steam can be used to produce more electricity or chilled water for the facility—an approach which has several advantages:

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