On the grounds of the 662-acre home of the proposed Niobrara Energy Park (NEP), there are no trees. No wetlands. No distinguishing features. No immediate neighbours. But that didn’t stop water rights and zoning expert Craig Harrison from buying in with eyes aimed about 8,000 feet below the surface.
Located in an isolated swath of Weld County along Colorado’s northern border, Harrison purchased the property in 2010 with an eye toward mineral rights shortly after the successful tapping of the Big Jake Well. But after commissioning a handful of studies with the help of consultant C2HM, he realised his acquisition had unique and valuable features more suited to other purposes.
One study lead to another, and before long Harrison completed more than 150 of them. Through that process, he came to understand his site was linked in to the fibre superhighway with several lit, dark, and empty conduits nearby, alongside some of the biggest natural gas pipelines in the nation – with 1.5 billion cubic-feet of capacity in the park today. Moreover, he discovered NEP was sitting smack on top of an aquifer 1,800 feet below the surface.
After putting in some legwork, Harrison secured direct access to local fibre and natural gas, and last year was given legal authority to pump up to 130 million gallons of clean, cool water per year.
‘Technologies that don’t exist’
But he didn’t stop there. Intent on orienting the site for a combined microgrid and data centre, he preemptively moved his proposal all the way through the public approval process, taking steps to ensure the site was future-proofed, with Harrison boasting, “I’ve got approval to do energy and data technologies that don’t even exist yet”.
If developed according to the working model that Harrison and C2HM conjured, NEP would feature a solar farm, a substation, a microgrid, natural gas power generation, unlimited energy storage, transmission capabilities to sell off extra energy to the AULT substation nearby, and either a data or energy-intensive manufacturing centre.
According to guidance shared by The Cambray Group’s managing director of data center development Keith Dines and James Grice, partner at Lanthrop & Gage at the most recent IMN data center finance conference, there is now a general shift away from Silicon Valley and tier-1 cities. Increasingly, data centres are being located in smaller cities and ‘flyover country’, where developers see higher demand and more favourable tax environments – which can make a huge difference to a centre’s bottom line.
Harrison says Weld is among the only US counties free and clear of short- and long-term debt, and that tax experts have told him local tax on data centre refresh is similar to that in Cheyenne, Wyoming, which is considered highly attractive. What’s more, last year he entered into an agreement with county commissioners, securing a 50 percent rebate on the “already low business personal property tax on the project,” he says.
Among those currently eyeing the site is Ed Krapels, a principal at Anbaric Transmission, which develops DC transmission and microgrid assets in the US. He believes the NEP site could be an ideal location to build what he calls a “very progressive microgrid that would offer a huge amount of energy, super reliability, and with as much renewable content as you could find”.
Krapels says while Harrison’s proposal to develop a data centre makes sense, his team would likely go another direction.
But according to Oakview Advisors’ senior managing director and head of investment banking Jerry Robinson, who is working with Harrison to develop a Request for Qualifications (RFQ) scheduled for issue on May 1, a data centre is only one of many options available.
“The fact is, it’s permitted for 52 different uses. It’s close to a natural gas hub, right next to giant transmission power lines, and right on top of one of the busiest fibre optic cable highways – a very unusual collection of assets,” Robinson says. “And no one is around so you don’t have the NIMBY [Not In My Backyard] issue.”
“People could go a lot of different directions here.”