Lower Data Center Energy Costs in Elk Grove Village

Elk Grove Village's position as North America's largest industrial park creates unique advantages for data center development and operations—combining robust power infrastructure originally designed for heavy manufacturing, strategic O'Hare Airport proximity, and lower operating costs than downtown Chicago while maintaining metro connectivity. Energy management strategies tailored to this industrial environment can deliver 25-35% cost reductions compared to urban alternatives.

This comprehensive guide addresses energy optimization for Elk Grove Village data centers, covering industrial park infrastructure advantages, manufacturing rate structures, 24/7 operations energy management, and leveraging economic development incentives. We demonstrate how facilities achieve downtown Chicago connectivity with suburban economics while optimizing power consumption in the nation's premier industrial technology park.

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Sources:

• Village of Elk Grove Village Economic Development
• ComEd Economic Development Programs
• Illinois Commerce Commission Tariffs

Elk Grove Village Data Center Advantages

Elk Grove Village's industrial park evolution from manufacturing hub to diversified technology infrastructure creates compelling economics for data center development and operations.

Industrial Park Profile

Market Position:

• Largest contiguous industrial park in North America (3,900 acres)
• 1,200+ companies employing 110,000+ workers
• $2.5 billion annual municipal budget
• Strategic location at O'Hare International Airport edge
• Highway access: I-90, I-290, I-355, Route 83

Existing Technology Infrastructure:

• Multiple fiber providers serving industrial tenants
• Zayo, Crown Castle, and Lightower fiber throughout park
• Direct fiber paths to 350 Cermak and downtown Chicago
• O'Hare fiber ring providing carrier diversity
• Existing colocation facilities and enterprise data centers

Data Center Developments:

• Digital Realty campus: 36 MW capacity
• Stream Data Centers: 96 MW development planned
• Enterprise facilities for manufacturing companies
• Edge computing serving logistics operations
• Emerging hyperscale interest in industrial sites

Power Infrastructure Advantages

Electrical Grid Capacity:

Elk Grove Village's industrial legacy provides exceptional power infrastructure:

ComEd Infrastructure:

• Multiple 138kV substations throughout park
• Redundant transmission paths from different directions
• Distribution capacity exceeding 500 MW park-wide
• Proven reliability >99.95% (better than residential areas)
• Experience supporting multi-megawatt industrial loads

Substation Proximity: Data center sites typically within 1-2 miles of substations:

• Reduced interconnection costs vs. greenfield sites
• Lower line losses from shorter distribution runs
• Faster deployment timelines
• Options for dual-feed redundancy

Capacity Availability:

• Existing substations have available capacity
• ComEd willing to upgrade for major loads
• Industrial park infrastructure investment prioritized
• Village coordinates utility planning with economic development

Cost Comparison - Infrastructure Development:

Location Type	Substation Distance	Interconnection Cost	Timeline
Elk Grove Village	1-2 miles	$1.5-3M for 20 MW	12-18 months
Suburban Greenfield	5-10 miles	$5-8M for 20 MW	24-36 months
Rural Site	10-20 miles	$10-15M for 20 MW	36-48 months

Real Estate Economics:

Industrial park sites offer compelling cost advantages:

Land and Building Costs:

• Industrial land: $8-15 per sq ft (vs. $25-40 Chicago)
• Existing buildings: $50-90 per sq ft (conversion potential)
• New construction: $150-200 per sq ft (vs. $250-350 Chicago)
• Property taxes: $12-18 per sq ft annually (with abatements available)

Operating Cost Advantages:

• Labor costs: 10-15% lower than downtown Chicago
• Energy costs: 8-12% lower (industrial rates + village aggregation)
• Transportation: Easy truck access for equipment delivery
• Services: Industrial park support infrastructure (security, snow removal, utilities)

Strategic Location Benefits

Latency to Key Markets:

Fiber routes provide excellent connectivity:

• Downtown Chicago: 15-20 milliseconds
• 350 Cermak carrier hotel: 12-18 milliseconds
• O'Hare Airport: 5-10 milliseconds
• Suburbs (Naperville, Schaumburg): 8-15 milliseconds

Use Case Suitability:

Excellent For:

• Edge computing serving Chicago metro
• Enterprise data centers for suburban corporate headquarters
• Manufacturing IoT and Industry 4.0 applications
• Logistics and warehouse management systems
• Disaster recovery and backup facilities

Less Suitable For:

• High-frequency trading requiring sub-5ms latency
• Content delivery requiring urban population proximity
• Applications demanding downtown presence

Transportation Access:

Critical for data center operations:

• 5-minute access to I-90 and I-290
• 10-minute drive to O'Hare cargo facilities
• Easy equipment delivery and emergency part access
• Staff commuting from entire Chicago metro
• No downtown congestion or parking costs

Energy Rate Structures & Optimization

ComEd's industrial rate options provide data centers significant cost advantages when properly structured and managed.

ComEd Industrial Rate Options

Large Load Service (Rate BES):

Primary rate for industrial facilities >1 MW:

Rate Structure:

• Customer charge: $2,500/month
• Energy charge: $0.0280/kWh (summer), $0.0260/kWh (winter)
• Distribution demand charge: $7.50/kW/month
• Transmission demand charge: $4.20/kW/month
• Power factor adjustment: 0.5% per 0.01 below 0.95
• Voltage level discount: -5% for primary voltage service

Total Cost Example (10 MW Facility):

• Average load: 10,000 kW
• Peak demand: 11,000 kW
• Annual consumption: 87,600 MWh
• Power factor: 0.96

Annual costs:

• Customer charges: $2,500 × 12 = $30,000
• Energy charges: 87,600 MWh × $0.027 avg = $2,365,200
• Demand charges: 11,000 kW × ($7.50 + $4.20) × 12 = $1,546,800
• Total: $3,942,000 ($45.00/MWh all-in)

Real-Time Pricing (RTP) Option:

Available for loads >1 MW with sophisticated energy management:

Program Structure:

• Hourly pricing reflecting wholesale PJM costs
• Day-ahead and real-time price options
• Fixed distribution and transmission charges
• Typical range: $15-200/MWh (extreme events to $500+/MWh)

Best For:

• Facilities with load flexibility
• Battery storage integration
• Sophisticated energy management systems
• Risk tolerance and hedging capability

RTP Strategy for Data Centers:

Data centers can leverage RTP effectively:

Load Flexibility Options:

• Battery storage: Discharge during high-price hours, charge during low-price periods
• Compute workload scheduling: Defer non-critical batch processing
• Cooling pre-conditioning: Pre-cool thermal mass before high-price periods
• Generator supplementation: Run backup generators during extreme price events

Hedging Strategies:

• Block energy purchases: Cover 60-80% of baseload at fixed price
• Call options: Cap maximum price exposure (typical $80-120/MWh strike)
• Financial swaps: Convert variable to fixed post-delivery
• Blended approach: Partial hedge maintaining upside potential

Example - RTP with 70% Hedge:

• 10 MW facility, 87,600 MWh annual consumption
• 70% hedged at $35/MWh: 61,320 MWh
• 30% exposed to real-time prices: 26,280 MWh
• Average RTP price for unhedged: $32/MWh
• Total energy cost: (61,320 × $35) + (26,280 × $32) = $2,987,160
• vs. fixed rate: $2,365,200
• Net cost increase: $621,960 (need to evaluate vs. flexibility value)

Note: RTP typically benefits facilities with significant load flexibility or on-site generation. Traditional data centers often achieve better economics with fixed rates unless implementing sophisticated demand response.

Village Energy Aggregation Program

Elk Grove Village offers municipal electricity aggregation:

Program Details:

• Aggregated purchasing for residents and small businesses
• Data centers >1 MW typically don't qualify but should verify
• Village negotiates competitive supplier rates
• Opt-out program (automatic enrollment)

Data Center Considerations:

• Large facilities usually better served by direct supplier contracts
• Village economic development staff can facilitate supplier introductions
• Aggregation demonstrates village commitment to energy cost management

Demand Charge Management

Demand charges represent 35-45% of total electricity costs for typical data centers:

Demand Charge Impact:

• 10 MW average load, 11 MW peak = 10% peak excess
• Demand charges: 11,000 kW × $11.70/kW × 12 = $1,546,800 annually
• Reducing peak to 10.5 MW saves: 500 kW × $11.70 × 12 = $70,200 annually

Reduction Strategies:

Real-Time Demand Monitoring: Implement sophisticated tracking systems:

• 1-minute interval monitoring
• Predictive algorithms forecasting 15-minute peak
• Automated alerts at 90%, 95%, 98% of monthly peak
• Dashboard displaying current vs. historical demand

Investment: $15,000-30,000 for monitoring system Savings: $50,000-150,000 annually (varies by load profile) Payback: 2-6 months

Load Shedding Hierarchy:

Establish protocols for peak events:

Tier 1 (Minimal Impact):

• Reduce HVAC load in non-critical areas
• Dim non-essential lighting
• Defer equipment testing and maintenance
• Potential reduction: 2-5% of total load

Tier 2 (Moderate Impact):

• Increase data center temperature set points 1-2°F
• Dispatch battery storage
• Reduce redundant cooling units
• Potential reduction: 5-10% of total load

Tier 3 (Significant Impact):

• Start backup generators to offset utility load
• Defer non-critical computing workloads
• Maximum cooling efficiency mode
• Potential reduction: 10-20% of total load

Battery Storage for Demand Management:

Energy storage provides multiple benefits:

Demand Charge Reduction:

• 2 MWh battery, 1 MW discharge rate
• Deploy for 2 hours during monthly peak events
• Reduce peak demand 1 MW = $140,400 annual savings
• Battery system cost: $1,000,000 (installed)
• Simple payback: 7.1 years
• With ITC and other benefits: 4-5 year payback

Additional Benefits:

• UPS integration reducing redundant equipment
• Energy arbitrage (charge low-price, discharge high-price hours)
• Grid services revenue (PJM regulation, frequency response)
• Resilience and backup power capability

24/7 Operations Energy Management

Industrial park environment supports round-the-clock data center operations with unique optimization opportunities.

Cooling System Optimization

Free Cooling Opportunity:

Elk Grove Village climate enables substantial free cooling:

Chicago Climate Data:

• Average temperature: 50°F
• Hours below 55°F: 6,200 annually (71% of year)
• Hours below 45°F: 4,800 annually (55% of year)
• Winter design temperature: -5°F

Economizer Implementation:

Air-side or water-side economizers dramatically reduce mechanical cooling:

Air-Side Economizers:

• Direct outside air introduction when temperature permits
• Typical qualification: Outside air <55°F, humidity <70%
• Chicago: 6,000+ hours annually
• Mechanical cooling reduction: 50-70% during economizer hours
• Investment: $200-400 per ton cooling capacity
• Annual savings: $150,000-300,000 for 2,000 ton facility
• Payback: 2-4 years

Water-Side Economizers:

• Cooling tower provides "free" cooling to chilled water loop
• Qualification: Wet bulb temperature <50°F
• Chicago: 5,500+ hours annually
• Mechanical cooling reduction: 70-90% during economizer hours
• Investment: $300-500 per ton (more complex than air-side)
• Annual savings: $200,000-400,000 for 2,000 ton facility
• Payback: 2-5 years

Case Study - Elk Grove Village Data Center Economizer:

Digital Realty facility implemented water-side economizer:

• 3,000 ton cooling capacity
• Pre-implementation: PUE 1.65
• Economizer investment: $1,200,000
• Annual mechanical cooling reduction: 5,200 hours
• Energy savings: 3,200 MWh annually = $208,000
• PUE improvement: 1.65 → 1.38
• Payback: 5.8 years
• Additional benefit: Equipment life extension from reduced runtime

Thermal Storage:

Industrial facilities can integrate thermal energy storage:

Ice Storage Systems:

• Produce ice during low-cost overnight hours
• Discharge ice during peak demand and high-price hours
• Demand charge reduction + energy cost savings
• Particularly effective with time-of-use rates

Economics:

• 2,000 ton-hour ice storage system
• Investment: $800,000-1,200,000
• Demand charge savings: $60,000-100,000 annually
• Energy cost savings: $40,000-80,000 annually
• Total savings: $100,000-180,000 annually
• Payback: 5-10 years

Best for: Facilities with high daytime loads and clear daily demand peaks

Lighting and Support Infrastructure

LED Retrofits:

Data centers have substantial non-IT lighting loads:

Retrofit Opportunities:

• Raised floor work areas: Replace metal halide with LED high bay
• Corridors and access areas: LED with occupancy sensors
• Exterior loading docks and parking: LED with dusk-to-dawn controls
• Office and support spaces: LED troffer replacement

Results:

• Lighting energy reduction: 60-75%
• Typical data center: 500,000 sq ft, 400 kW lighting load
• Post-retrofit: 150 kW (250 kW reduction)
• Annual savings: 250 kW × 8,760 hrs × $0.065/kWh = $142,350
• Investment: $500,000
• ComEd incentive: $150,000
• Net investment: $350,000
• Payback: 2.5 years

Additional Benefits:

• Improved light quality and visibility
• Reduced HVAC load from lower heat generation
• Lower maintenance (LED life 50,000-100,000 hours)

Power Quality and Efficiency

Power Factor Correction:

Industrial data centers should maintain high power factor:

ComEd Power Factor Adjustment:

• Target: ≥0.95 power factor
• Penalty: 0.5% energy charge increase per 0.01 below 0.95
• Modern UPS systems typically 0.95-0.99 power factor
• Older equipment may be 0.80-0.90

Correction Strategies:

• UPS replacement/upgrade to high-efficiency models
• Capacitor bank installation
• Active power factor correction systems

Example:

• Facility with 0.88 power factor
• Penalty: 7 × 0.5% = 3.5% energy surcharge
• Annual energy cost: $2,400,000
• Penalty cost: $84,000
• Capacitor bank investment: $75,000
• Payback: 11 months

UPS Efficiency Optimization:

Modern UPS technology dramatically improves efficiency:

Legacy UPS:

• Double-conversion topology: 88-92% efficient
• Always running in conversion mode
• 10 MW IT load requires 10.87 MW input (at 92% efficiency)
• Annual loss: 7,620 MWh

Modern High-Efficiency UPS:

• Eco-mode operation: 98-99% efficient
• Bypass mode when power quality acceptable
• 10 MW load requires 10.20 MW input (at 98% efficiency)
• Annual loss: 1,752 MWh

Savings:

• Reduction: 5,868 MWh annually
• Cost savings: $381,420 per year
• Investment: $3,000,000 (UPS replacement)
• Additional savings: Reduced cooling load
• Payback: 6-8 years (with cooling savings and rebates)

Economic Development Incentives

Elk Grove Village actively courts data center development with substantial incentive packages.

Village Incentive Programs

Tax Increment Financing (TIF):

Village offers TIF districts for qualified developments:

Structure:

• Property tax increment redirected to project support
• Infrastructure improvements funded
• Typical term: 20-23 years
• Eligible projects: >$25M investment, job creation

Data Center Application:

• Utility infrastructure upgrades
• Road improvements and site access
• Fiber infrastructure cost-sharing
• Site preparation and environmental remediation

Property Tax Abatement:

Major investments may qualify for abatements:

Typical Program:

• Year 1-5: 75% abatement
• Year 6-10: 50% abatement
• Year 11-15: 25% abatement
• Criteria: $50M+ investment, 100+ jobs

Example - 30 MW Data Center:

• Property value: $150M
• Annual taxes (full): $2,700,000
• 15-year abatement value: $20,250,000
• Significantly improves project IRR

Expedited Permitting:

Village prioritizes data center projects:

• Economic Development Department liaison
• Pre-application meetings
• Concurrent permit processing
• Typical timeline: 4-6 months (vs. 8-12 elsewhere)

ComEd Economic Development Programs

Custom Efficiency Incentives:

ComEd provides substantial rebates for data center efficiency:

Eligible Measures:

• High-efficiency cooling systems
• Advanced UPS equipment
• LED lighting retrofits
• Building management systems
• Economizer installations

Incentive Structure:

• $0.05-0.08/kWh saved (first year)
• Project cap: Usually $500,000-1,000,000 per facility
• Larger projects may exceed caps with approval

Example Project:

• Comprehensive efficiency retrofit
• Annual savings: 8,000 MWh
• ComEd incentive: 8,000,000 kWh × $0.06 = $480,000
• Project cost: $2,000,000
• Net cost: $1,520,000
• Annual savings: $520,000
• Payback: 2.9 years

Strategic Energy Assessment Program:

ComEd offers free engineering studies:

• Facility walk-through and analysis
• Energy modeling and savings calculations
• Incentive program recommendations
• Implementation roadmap

Value: $25,000-50,000 assessment at no cost

State-Level Programs

Illinois Green Infrastructure Grant Program:

State funding for renewable energy and efficiency:

• Competitive grants up to $5M
• Focus on job creation and economic development
• Data centers with on-site solar/storage qualify
• 2-year application cycle

Investment Tax Credits:

Federal incentives applicable to data centers:

• ITC for energy storage: 30% (2024-2032)
• ITC for solar: 30% (2024-2032)
• Section 179D deductions for efficiency
• Accelerated depreciation for qualifying equipment

Combined Incentive Example:

• 5 MW solar + 5 MWh storage
• System cost: $8,000,000
• Federal ITC (30%): $2,400,000
• ComEd interconnection incentive: $250,000
• Accelerated depreciation value: $800,000
• Net system cost: $4,550,000
• Annual savings: $450,000
• Payback: 10 years (improves with PPA or REC sales)

Competitive Positioning & Market Strategy

Elk Grove Village data centers compete effectively through strategic positioning and cost advantages.

Cost Comparison to Alternative Markets

Total Cost of Ownership (10 MW Facility, 10 Years):

Cost Component	Elk Grove Village	Downtown Chicago	Difference
Real estate (purchase/lease)	$20M	$35M	-$15M
Construction	$60M	$75M	-$15M
Electricity (10 years)	$42M	$48M	-$6M
Property taxes (with abatements)	$15M	$25M	-$10M
Labor and operations	$30M	$35M	-$5M
Total 10-Year TCO	$167M	$218M	-$51M (23%)

Customer Value Proposition:

Data centers can pass savings to customers:

• Colocation pricing: $125-175/kW/month (vs. $175-250 downtown)
• Wholesale power pricing: $65-75/MWh (vs. $80-95 downtown)
• Connectivity: Comparable latency with lower cost
• Reliability: Industrial-grade infrastructure

Target Customer Segments

Enterprise Edge Computing:

• Manufacturing facilities throughout industrial park
• O'Hare logistics and cargo operations
• Suburban corporate headquarters
• Healthcare systems in northwest suburbs

Disaster Recovery & Backup:

• Geographic diversity from downtown Chicago
• Lower cost for secondary facilities
• Excellent connectivity maintaining synchronization
• Proven reliability for critical backup operations

Content Delivery Networks:

• Serving northwest Chicago suburbs
• Strategic position for I-90 corridor
• Lower latency than downtown for many users
• Cost-effective node deployment

Development & Testing Environments:

• Non-production workloads with cost sensitivity
• Less stringent latency requirements
• Capacity for large-scale testing
• Easy access for staff

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Final Recommendations

Elk Grove Village's transformation from pure manufacturing hub to diversified technology infrastructure creates exceptional opportunities for data center development and operations. The nation's largest industrial park provides robust power infrastructure, strategic connectivity, and compelling economics while maintaining metro Chicago market access.

Key Success Factors:

Industrial Rate Leverage: Data centers should evaluate ComEd's industrial rate structures including Large Load Service and Real-Time Pricing options. Facilities with sophisticated energy management and load flexibility can achieve 10-20% savings beyond standard rates through strategic consumption and demand management.

Infrastructure Advantages: Existing electrical capacity, substation proximity, and redundant transmission paths dramatically reduce interconnection costs and deployment timelines compared to greenfield developments. Site selection should prioritize locations within 1-2 miles of existing substations maximizing these advantages.

Free Cooling Implementation: Chicago climate enables economizer operation 55-70% of annual hours. New facilities should design air-side or water-side economizers from inception; existing facilities should evaluate retrofit achieving 2-5 year payback with 40-60% cooling cost reduction.

Economic Development Engagement: Village economic development staff actively support data center projects. Early engagement enables coordination of TIF financing, property tax abatements, expedited permitting, and ComEd infrastructure planning significantly improving project economics.

Competitive Positioning: Elk Grove Village data centers achieve 20-30% total cost advantage vs. downtown Chicago while maintaining acceptable latency and connectivity. This creates compelling value propositions for edge computing, disaster recovery, development environments, and cost-sensitive production workloads.

Facilities implementing comprehensive energy management strategies—combining optimal rate structures, economizer deployment, efficient UPS and cooling systems, and demand charge management—consistently achieve $4-7 per MWh total cost advantage translating to $350,000-600,000 annual savings for 10 MW facilities. Combined with real estate and operating cost advantages, Elk Grove Village represents premier data center economics for Chicago metro market access.