The most expensive kilowatt is the one you never use: oversizing in data centres and server rooms

Every data centre and every server room is sized before anyone knows what it will carry. Faced with that uncertainty, the usual reflex is to build for the worst case, then pay for ten years for capacity that never gets used. Walk into many plant server rooms and you can see it: a UPS cabinet whose display has shown 20-something per cent load since the day it was commissioned, and two cooling units taking turns to cool half-empty racks.

The best-known attempt to put numbers on this is a vendor white paper: APC’s White Paper 37, Avoiding Costs from Oversizing Data Center and Network Room Infrastructure, by Neil Rasmussen. It is old (the French edition still in circulation dates from 2003) and it was written by a company that sells modular power systems. Read it for the mechanism and the orders of magnitude, not for the prices.

What the numbers say

The paper builds a simple planning model, a ten-year life with a planned load that starts at about 30% and reaches its final value by mid-life, and compares it with what surveyed sites actually drew:

• the planned start-up load was typically 30% of the ultimate planned load;
• the actual start-up load was typically 30% of the planned start-up load;
• the actual ultimate load was typically about 30% of the installed capacity.

Put plainly, the average installation ended up about three times larger than it needed to be, and at start-up the gap was nearer ten times. A measurement study of Silicon Valley data centres published in 2003, independent of the vendor, came to the same conclusion from the other end: power requirements were greatly overstated because the estimates assumed oversized, redundant systems filled to capacity.

Later editions of the same white paper revised the figures downwards, and that correction is worth knowing. The abstract published in 2020 puts oversizing at about five times at start-up and one and a half times at ultimate load, with utilisation of 50 to 60% and a total-cost-of-ownership penalty above 30%. Better than in 2003. Still a third of the money.

What it costs

The paper’s worked example is a 100 kW facility at 2003 prices.

• Capital. About €500,000 of power and cooling infrastructure (€5 per watt), of which about 70%, €350,000, is never used.
• Maintenance. Idle equipment still gets its service visits: about €250,000 over the life of the system goes on capacity that carries nothing.
• Electricity. Power and cooling equipment at low load wastes energy. The paper puts the fixed losses at about 5% of nominal power for the electrical chain and about 10% with cooling included, some 600,000 kWh over ten years, worth about €55,000 at the time.

Two remarks. The paper sums this up as “about 70% of the cost of the power and cooling infrastructure”, which only holds if that cost is read as life-cycle cost: the three items alone add up to about €655,000 for a €500,000 installation. And the electricity line has aged worst. The same 600,000 kWh would cost about €110,000 at the average price paid by non-household consumers in the EU in the second half of 2025, €0.18 per kWh, roughly twice the price implied in 2003.

Why everyone oversizes, and why it is rational

Each planning assumption is sensible on its own. Running out of capacity is very expensive. Adding capacity mid-life costs money and puts availability at risk. Design is done once, up front, and the load will certainly grow, though nobody can say by how much.

Stack them together and you get a system sized for the top of the range. The paper’s most interesting finding is that, given those assumptions, this is not a mistake. Final utilisation across real sites is spread so widely that, had capacity been set at the expected value of about 30%, half the sites would have run short at some point in their life. Oversizing is a rational hedge against uncertainty. A better forecast will not fix it. Infrastructure that does not depend on the forecast will.

Build for growth, not for the forecast

The alternative is to size the fixed parts for the final room and to deploy the rest in steps that follow the measured load.

• Fixed from day one: main switchgear and distribution sized for the room’s ultimate capacity, because these are the parts that are expensive and disruptive to change later.
• Added in steps: UPS modules, batteries, power distribution and cooling units, brought in as the load grows, without work on live circuits.
• Redundancy as a setting: N, N+1 or 2N reached by adding modules rather than by rebuilding.

Unsurprisingly, the white paper recommends its author’s own modular architecture. The principle does not depend on any vendor, and it is the one the European guidelines have taken up.

What the EU Code of Conduct asks

Each year the European Commission’s Joint Research Centre publishes the Best Practice Guidelines of the EU Code of Conduct on Data Centre Energy Efficiency. The French translation found on many sites is the 2019 edition (version 10.1.0); the current one is the 2025 edition (version 16.1.0). The practices that deal with oversizing have not changed in substance:

• 3.3.1, build resilience to business requirements. Only the resilience and availability that business requirements and impact analysis justify. The 2019 text adds that 2N infrastructures are often unnecessary.
• 3.3.3, lean provisioning of power and cooling for a maximum of 18 months of data floor capacity. Excess capacity drives substantial fixed losses; plan the site for modular expansion and build it out in a rolling programme.
• 3.3.4, design infrastructure to maximise part-load efficiency, for instance with variable-speed drives on pumps, fans and compressors.
• 4.1.9, provision power and cooling to the planned draw of the IT equipment as configured, from the components actually installed rather than the power supply’s nameplate rating.
• Modular cooling and modular UPS (5.2.1 and 6.1.1 in the 2019 numbering), so that equipment nobody needs can be left out or switched off.
• Audit before you buy and retire what is unused (3.2.1, 4.3.1 and 4.3.2): existing capacity is checked before any new investment, and equipment that no longer supports a live service is decommissioned.

Why it matters more now

Under the recast Energy Efficiency Directive (Directive (EU) 2023/1791, Article 12), data centres with an installed IT power demand of at least 500 kW must report their energy performance every year to a European database: energy consumption, power utilisation, temperature set points, waste heat use, water use and renewable energy. Delegated Regulation (EU) 2024/1364, adopted in March 2024, details what has to be reported.

Oversizing shows up straight away in those indicators. A facility running at a third of its capacity runs its power and cooling chain at partial load, where it is least efficient, and its PUE gives it away.

On an industrial site

Most plant server rooms and OT data rooms sit well below the 500 kW threshold, but the logic is the same, and UPS and cooling are often specified at two or three times the need “to be safe”. Before the next one is built, ask four questions.

• What is the measured IT load over a full production year, as opposed to the sum of the nameplates?
• Which systems really need 2N, given their business impact? A GMP batch record system and a test bench do not carry the same consequence.
• Can the UPS and the cooling be bought in modules, with the switchgear sized for the final room?
• What will be switched off or removed when a system is retired, and who will actually do it?

References

• N. Rasmussen, Avoiding Costs from Oversizing Data Center and Network Room Infrastructure, APC White Paper 37 (French edition, revision 4, 2003; later revisions published by Schneider Electric).
• J. Mitchell-Jackson, J. G. Koomey, B. Nordman, M. Blazek, Data center power requirements: measurements from Silicon Valley, Energy 28(8), 2003, pp. 837–850.
• European Commission, Joint Research Centre, 2025 Best Practice Guidelines for the EU Code of Conduct on Data Centre Energy Efficiency, version 16.1.0, CC BY 4.0.
• Directive (EU) 2023/1791 on energy efficiency, Article 12; Delegated Regulation (EU) 2024/1364.
• Eurostat, Non-household electricity prices in the 2nd half of 2025.