Power as One of the Criteria for Selecting a Data Center Site

In the recent Critical Facilities Roundtable, Steve Rosa, principal of Unique Infrastructure Group, gave a very interesting presentation on power availability and cost as a criterion for selecting a site for a new data center. There are many criteria for selecting such a site (see here).

Probably, available and reasonably priced power is the most important factor, and access to the fiber network is the second.

Steve Rosa

When I started looking into the power issue, I looked at my power and gas bill for the first time. I was amazed that it included several charges beyond the charge for actual use. A residential bill is not the same as a data center bill. The following slide from Steve shows what is involved in the power bill.

Power charge consists of demand charge, power surcharge, service charge, and sales tax.

(courtesy of Unique Infrastructure Group)

Steve continued by discussing what needs to be considered: utility portfolio, rate increases, NERC CIP-compliance, regulatory, future capacity, PUE, and today’s bill. He covered each of these elements:

Utility portfolio: This is the source of power generation and needs to be considered because some sources, such as coal, may be regulated more than others. Some utilities are heavy users of crude oil, while others use little oil for power generation. The price of oil is very volatile and must be considered in your site selection.

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Improving Power and Cooling Efficiency in the Datacenter
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Rate increases: It is likely that the cost of power will increase over time, and that increase may depend on the site you select. The president of Rocky Mountain Power predicted that power cost would double in the next 10 years.

Future capacity: This is important because you need to have reliable delivery of power even when your demand for power increases in the future. For example, you cannot get even 1 kW for your new needs in Manhattan.

Factors to consider beyond today’s bill: utility portfolio, rate increases, NERC CIP-compliance, regulations, future capacity, PUE.

(courtesy of Unique Infrastructure Group)

Steve also talked about the EPA’s Maximum Achievable Control Technology (MACT) Standards, which is a court-sanctioned mandate that will take effect later this year. MACT is concerned with the emissions from coal-fired power plants. MACT is one type of National Emission Standards for Hazardous Air Pollutants (NESHAP). See for NESHAP and for MACT.

Bernstein Research’s comprehensive analysis of the impact of the new standards on coal-fired power plants concluded that 9% of them will need to be shut down. The following is a short summary of Bernstein’s report.

If your utility is a heavy user of coal for power generation and its coal-fired power plants are to be shut down for noncompliance with MACT standards, you will not get enough power for your data centers. Your utility will lose a lot of its power generation capacity, increasing the power cost for sure. One such example Steve mentioned is a utility that might lose 43% of power generation capacity. In general, coal-fired power plants are concentrated in the mid-Atlantic region, where coal is abundant and cheap. Many power plants in that region are small, old, and less efficient. Steve predicts that the owners of such plants will not renew but abandon them.

He also covered security requirements (NERC CIP-compliance)for utilities’ facilities in view of malware, such as Stuxnet (attacks SCADA systems) and cyber attacks. NERC CIP-compliance is for the security of power generation and the power transmission infrastructure. The auditors are getting serious about enforcing it, and if a utility does not comply, it will be fined $1M a day, which will be passed onto consumers. To date, not a single utility satisfies this requirement. Steve’s suggestion is to get off the power grid and rely on your own facilities for power. The military is working to get its critical infrastructures off the grid now.

When I talk to people responsible for managing energy for a large corporate campus, they tell me their number one reason not to consider having their own power microgrid is the cost of implementing and maintaining it. But as power cost increases and the supply gets smaller, the move to microgrid may become a reasonable choice. Steve’s talk was geared towards data center operators in their site selection. But those who already have data centers and a campus to manage their energy should also take his warning seriously and consider their future energy demands.

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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