Japan Data Center Council Visits Silicon Valley Power for New Ideas to Remedy Power Problems: Part 2

This is a continuation of my account of the Japan Data Center Council (JDCC) visit to Silicon Valley Power. After the disaster in 2011, power remains one of the biggest concerns for Japanese data center operators.

Energy mix for power: Power can be generated from multiple sources, such as coal, oil, gas, and renewable energies (wind, solar, geothermal, and hydro). In the 1970s the SVP began to diversify its energy sources to stabilize its power cost, because the cost of each source is independent and varies. This policy was established when the SVP experienced the high price of oil during the embargo in the 1970’s. So Santa Clara’s municipal utility began to have long-term, fixed-price contracts with different energy providers to achieve stable costs for power generation. The next figure denotes its current energy sources.

Energy mix for generation of power for SVP, including hydro, geothermal, coal, solar, natural gas, and wind.

Renewable energies and RPS: The diversity mentioned above contributed to the current requirement for renewable energy use for power generation. In California, by 2020, each power producer should generate 33% of its power from renewable sources. Now 20% of power is generated from renewables and that will rise to 25% in a few years. They are ahead of the pack, and they are providing power generated from renewable sources to others with a renewable energy certificate.

Data center efficiency: In SVP territory, competition drives energy efficiency. To win in the colo market, price is the most important factor. To that end, operators tend to adopt best practices in their data centers to reduce power consumption. The SVP provides rebates for power reduction and provides environmental impact guidelines, such as the LEED program for green buildings.

Impact of cap and trade: The federal version of cap and trade (CT) died in 2009 in the US. In Japan, the Tokyo Metropolitan government began in 2010 to impose its own version of cap and trade, similar to the UK’s carbon reduction commitment (CRC). At first, the Tokyo government’s power curtailment requirements did not distinguish between types of business. The Tokyo version is more strict than Japan’s national version. While not many other industries are growing, the data center industry is, and it requires more power every year. If the Tokyo cap-and-trade laws were strictly applied, a typical large data center would be required to pay $1M a year in fines. The JDCC felt threatened by this and started a dialogue with the government.

There are many servers and other equipment scattered around in corners of every building in the Tokyo area. Those are managed with yesteryear’s technologies and operational methods, wasting huge amounts of energy. If they were consolidated into data centers with proper operations, more energy could be saved. The JDCC took time (more than six months) to convince the government to apply a different rule to data centers. Even better, now the Tokyo government is promoting the use of data centers rather than a small server room in each company.

Even though the federal version of CT died, the California version of it will be enacted on January 1, 2013. The SVP needs to start preparing for it. So do data center operators in SVP territory and elsewhere in California.

Cost for infrastructure: As more data centers come to Santa Clara and demand more power, new infrastructure must be put in place or existing infrastructure expanded. Who bears the cost for such expansions? In principle, data center owners pay for the substations and other infrastructure. One reason for that is that operators tend to overestimate their needs. If the expansion is done on the basis of their inflated estimates and not fully utilized and the burden is spread among all the ratepayers, it is not fair to other ratepayers. JDCC said that the situation is similar in Japan. In Japan, data center operators must pay for a necessary substation and sometimes for any cables required for connection.

Rate: A data center consumes a lot of power, and the JDCC has a hard time negotiating a favorable purchase cost. The SVP has several levels of rate structure linked to the amount of power consumed: the more you use, the more favorable your rate. Because each situation is unique, the SVP may draw up a special service agreement that is renewed every three years (shortened from 5 years) because of rapidly changing California laws.

Power supply path regulation: In Japan, each data center is given only one power path (feed) from utilities. When a data center is constructed in phase and/or in modular fashion, that is not convenient for them. As they grow, it is favorable to have multiple feeds, but that is not allowed in Japan. If they insist, they can get two separate feeds from two different substations, but it would cost them a bundle. In SVP territory, it is usually one feed for one parcel. So if a data center set aside space (a parcel) for their data center site, they get only one feed. The entry point might be a substation placed at a data center. If the operator likes, he can have multiple feeds from the substation. If a data center operator wants two feeds coming from two distinct substations, that can be honored easily because SVP territory is small and substations are not far from each other.

Power sourcing via transmission line: In Japan (as in the US), some generation facilities are far away from the urban areas where most power is consumed. The Tokyo Electric Power Company (TEPCO), which serves Tokyo and its surrounding areas, has two nuclear power plants far from Tokyo. By the way, those two sites are completely shut down at this time. I remember a power crisis in California back in 2001. My house in PG&E territory experienced blackouts, while my office in Santa Clara did not. The SVP sources power via transmission line. Now-defunct Enron stopped many of the generators under its control and issued a lot of fake transmission-use requests to saturate the transmission line. The SVP was in the same boat but caused only one blackout. This is strictly because it sat down with its large consumers (90% of ratepayers are business/industry) to reduce their power consumption in return for an assurance that they would not be turned off. Because of this, the SVP avoided the next seven or eight blackouts that took place in other parts of California.

Blackouts: For a data center operator, blackouts are a scary thought. Data centers can operate without power supplied by the grid by using backup generators for 24 to 72 hours. But if fuel runs out, what happens? Atsushi Yamanaka of IDC Frontier shared some horror stories from right after March 11, 2011. TEPCO exercised rolling blackouts right after the disaster for a few weeks. Fortunately, there was no blackout in the Tokyo region, but surrounding areas were not so lucky. Data centers where the rolling blackouts were exercised had to run their backup generators, which are mostly gas, rather than diesel-based, turbines and last 24 to 48 hours. Most of the operators had a premium contract with fuel suppliers, but when there was big demand from other many premium account holders, it was not easy to secure enough fuel. The confusion and gridlock in traffic prevented trucks from reaching data centers quickly. On top of that, earlier rolling blackouts did not specify which areas would be affected until the day of their exercise, so it was very hard to plan.

Power provisioning time: In Japan, when a data center operator asks for power to build a new data center, utilities answer is about 24 months. Eventually, that period became 10 months, and sometimes 8 months. It has been said that data center construction time in the US is about 12 to 18 months from beginning to operation. The SVP can provision power in 6 to 9 months, quicker than other utilities.

The JDCC wanted to visit longer, but unfortunately we ran out of time. I sat with them in their meetings during their stay, and this meeting with the SVP was one of the highlights of their trip. I hope the information obtained will be useful to them when they talk with their utilities about securing enough stable power to secure their 24×7 operations. Finally, I would like to thank SVP’s people for their time and information.

Zen Kishimoto

About Zen Kishimoto

Seasoned research and technology executive with various functional expertise, including roles in analyst, writer, CTO, VP Engineering, general management, sales, and marketing in diverse high-tech and cleantech industry segments, including software, mobile embedded systems, Web technologies, and networking. Current focus and expertise are in the area of the IT application to energy, such as smart grid, green IT, building/data center energy efficiency, and cloud computing.

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