What’s next for Google’s new Chilean datacenter after it goes back to the drawing board?

Google's decision to put on hold a US$200mn datacenter project in the Cerrillos district of Chilean capital Santiago over water concerns and rethink the entire project reflects what is set to be a growing trend in the tech industry.

More and more, large tech companies are coming under intense scrutiny from environmental authorities, communities and regulators about the use of resources, which means they must be better prepared when designing projects and requesting permits, according to market sources consulted by BNamericas.

In February, a Chilean environmental court ordered a halt to the construction of the Cerrillos datacenter so modifications can be made to the project to adapt it to climate change.

That decision partially annulled a previous approval of the project by environmental review agency SEA.

Google first submitted its environmental request for the Cerrillos project in July 2019. The SEA gave the green light in February 2020, according to documents in the agency’s database.

The court concluded that the SEA carried out a poor evaluation of the impact of the initiative on the central Santiago aquifer. The project had also faced an outcry from residents' groups and surrounding communities. 

Amid this back-and-forth, Google last week decided to go back to the drawing board with the project. Instead of water-cooling, the tech giant now plans to use air-cooling.

According to the company, as reported by news agencies, "in due course, a new process will begin from scratch for a project that will use air-cooled technology at this very location."

REGULATION AND DESIGN

Speaking on condition of anonymity, a source from the datacenter construction sector believes Google made mistakes in planning and designing the project. 

According to the executive, environmental approval stages for projects in Chile are traditionally bureaucratic and rigorous, but scrutiny has risen in recent times and Google, at the very least, “miscalculated” by not anticipating and preparing accordingly.

The source believes that, despite all the delays, the company will go ahead with what would be its second Chilean datacenter. 

A second source, also speaking anonymously, told BNamericas that both his and other companies in the datacenter segment have been under strong pressure from investors and clients to carefully structure projects from an environmental perspective and to avoid creating space for challenges such as those faced by Google in Cerrillos.

“The topic of environmental resources sizing in datacenter planning has clearly escalated and gained another level of importance,” said the executive.

In Chile, Google’s existing Quilicura datacenter in Santiago, the company's first in Latin America, consumed 105mn gallons (397mn liters) of potable water in 2023, up from 104mn gallons the previous year, according to Google’s latest sustainability report.

Water consumption is reported as the difference between water withdrawal and water discharge and the metrics do not include seawater.

Overall, Google’s global operations, including not only datacenters, consumed 6.35bn gallons last year, up from 5.56bn in 2022 and from 4.56bn gallons in 2021. The figures for 2022 have been revised upwards.

URUGUAY 

Google also had issues related to environmental concerns with a datacenter in Uruguay.

In both the Chilean and Uruguayan cases, this led to significant delays to the projects. The two initiatives were originally announced four years ago.

In Uruguay, the environment ministry only in July approved Google's revised Teros datacenter project in Canelones department, which had been first made public in 2020. The project had to be reformulated in 2023 after concerns about water use, among other issues.

The amended initiative presented last year involved the installation of one datacenter instead of the original two, reducing the capacity to a third of what was first proposed.

Having cleared those regulatory hurdles, Google started construction of the US$850mn Teros project last month.