Low and stable electricity prices are likely to make the US a target for data center investment at Europe’s expense, according to a report published by 451 Research.

It said lower electricity prices are also expected to impact US investment in energy-efficient technologies.

The reason for this unexpected price stability in the US is its booming shale gas industry.

As a result, the energy bill for a medium-sized 2MW data center in the US with a 50% baseload energy consumption could be as much as US$500,000 or £335,000 a year less than a comparable facility in the UK – and about US$750,000 or £500,000 less than one in Germany.

Electricity prices in some European countries, particularly Germany, are already twice those in the US and prices have more than doubled in countries such as the UK, France and Germany during the past decade, while they have held mostly flat in the US, 451 Research VP of datacenter technologies Andy Lawrence said.

He said the price of power can significantly alter the overall lifetime cost of a data center.

Assuming a 15-year lifespan, a price of $0.067/kWh or £0.045/kWh contributes about 30% of a facility’s operating expense and usually accounts for 10-15% of the total cost of building and running a facility.

“This figure is large enough to sway decisions about where a data center should be built,” Lawrence said (Lawrence co-authored the report with senior 451 Research Analyst Rhonda Ascierto).

“The effect on data center-technology providers is contradictory. The growth of US data center activity and investment will boost the market for equipment of all kinds but may limit demand for certain energy-efficient data center technologies, especially where there is a trade-off with risk and availability.

“However, with its higher energy prices, the European market should be more attractive to suppliers of technology that improve data center efficiency.”