The Japan Data Center Council (JDCC) is a consortium of data center operators, vendors, and users in Japan consisting of 170 member companies. Even before the disaster in March 2011, the JDCC was trying to work with utilities to come up with a suitable pricing structure and other factors for their unique power usage. Data center loads do not fluctuate over time but stay fairly flat and require a large amount of power. Power is supplied by 10 IOUs in Japan and there is no alternative, even though there are some independent power-generating companies solely for business and industrial customers. But it is safe to say that those 10 IOUs are vertically integrated and there is no flexibility. When the JDCC asks for flexibility, utilities companies ask them for a proposal.
In order to propose an alternative pricing structure and better working relationship with utilities, the JDCC wants to find out what other countries are doing about utilities support for data centers. I arranged a meeting with Silicon Valley Power (SVP) to find out. The SVP is not an IOU but a department of the City of Santa Clara. Municipal utilities do not exist in Japan. When I explained what the SVP is and why they would be of interest to the JDCC, I pointed out the following:
- It is a municipal utility.
- Many data centers are within the city limits.
- They accommodate data centers’ unique requirements.
The first point was interesting enough, but the last two really attracted the JDCC’s attention. There should be a reason why so many data centers (around 30) call Santa Clara home. The city is not huge, only 19 square miles. Data center density is pretty high.
Front row, from left: Wendy Stone, Kathleen Hughes, and John Roukema. Back row, from left: Hideki Okita (Hitachi), Atsushi Yamanaka (IDC Frontier), and Jun Sato (Mitsubishi).
Overview: When Silicon Valley had semiconductor factories, those produced a 24×7, flat, stable power demand. Pricing was relatively easy because demand was constant. The load factor was around 74%. Then manufacturing left the Valley, but soon the dot-com era arrived. To support that, in the 1990s data centers began to pop up. Even after the dot-com bust, the trend continued. While demand from other industries goes down, demand from data centers has been rising 2% annually. Demand was at its peak in 2006 but has declined since, thanks to the energy efficiency exercised at data centers.
Attractiveness: There are a few reasons why data centers are coming to Santa Clara. Several criteria determine data center siting, but two must-haves are power and communications networks (fiber). The market may come next, along with other things, like access to a sophisticated workforce and tax considerations. The SVP provides the lowest cost for power in California and has its own dark fiber network, and there are other local fiber providers. So without any visible recruiting efforts, data centers are coming to Santa Clara.
Fiber network laid and maintained by SVP within the city limits of Santa Clara.
Continues to part 2.