Energy grid will be put to test
Internet of Things poses power challenge,
Electric grids in the U.S. and other countries face more challenges than ever when it comes to providing power reliably and affordability.
Aging infrastructure, increasing environmental requirements and the influx of solar and other forms of renewable energy all make running an electric utility smoothly increasingly difficult. Add to that test the explosion of data and the need to generate, store and process it on a realtime basis.
“Power reliability will matter even more in future years as society becomes increasingly digitized,” writes Boston energy consultant Peter Kelly-Detwiler in a new white paper. “The last decade has seen an astonishing growth in production, storage and consumption of data. And yet, the global economy is about to experience an acceleration in this trend.”
All told, the number of digital bits in circulation doubles every two years and will increase from 4.4 zettabytes in 2013 to 44 zettabytes in 2020, said Kelly-Detwiler, a principal with Northbridge Energy Partners and a former executive with Constellation En- ergy.
Among the biggest contributors, of course, are smartphones, flat-screen TVs, computer tablets and other electronic devices, many of which are being wrapped as holiday gifts.
But driving the demand for data even more, Kelly-Detwiler said, is the “Internet of Things,” including so-called “machine-to-machine” communications and a growing network of ubiquitous sensors.
“Today, there are some 200 billion ‘things’ in the world, with about 20 billion of them currently connected and communicating,” he said, citing one of many research pieces he used in his report. “This number is expected to grow to 30 billion by 2020.”
Much of the data, especially that involving business, must be “mined and acted upon instantaneously,” requiring “bigger and more powerful” data centers — those enormous, window-less structures that house computer systems and associated gear — he added.
As data centers proliferate, so will the requirement for electricity to store and process the information. In fact, Kelly-Detwiler said data centers represent one of the fastest growing users of electricity in the world, accounting for nearly 3% of the world’s consumption of power. That’s an increase of 100% over the past five years.
In the U.S., data centers accounted for about 91 billion kilowatt-hours of electricity demand in 2013, an amount equal to the output of about 34 power plants, or twice the demand of all households in New York City.
That number is expected to increase by more than 50%, to 140 billion kilowatt-hours — about the output of 50 power plants — by the end of the decade, he said.
While reliability is critical to anyone using electricity, it is especially so for operations like data centers, whose continuous operations are vital to banks, hospitals, utilities and other businesses. A recent survey indicated that shutdowns cost data centers an average of $200,000 an hour, with some reporting losses of as much as $1 million an hour.
That said, a critical consideration for chief information officers and others responsible for keeping the bits flowing will be the location of new data centers and the reliability of the grid in areas under consideration for these facilities.
Increasingly, Kelly-Detwiler suggests, companies building the data centers — such as Amazon, Apple, Facebook and Google — will look abroad to countries where the grid is under less stress and where abundant renewable resources, like hydropower, make it easier to comply with commitments to lower-carbon emissions.
For the sake of full disclosure, I should note Kelly-Detwiler prepared the paper for a client of his company’s called Verne Global, which owns a data center in Iceland, one of the countries that he singles out as an attractive location for such facilities.
But Iceland isn’t the only option he discusses.
Denmark, Finland, Norway and Sweden are all making big pitches for data centers, with their stable grids and ample sources of renewable energy.
Facebook, for example, has installed a massive data center in Sweden and plans a second one there.
For the same reason, Quebec, too, offers an attractive alternative to U.S. locations, he said.
That’s not to say data operations won’t be built in the U.S. anymore. Kelly-Detwiler notes some new ventures in the U.S., including an announcement by Amazon earlier this year that it will install a large wind farm in North Carolina to power its cloud-computing services.
But overall, the outlook in the U.S. is uncertain for companies contemplating building such facilities.
“At this point, with known technologies, it appears that the U.S. power grid will continue to face challenges in offering reliable and uninterruptible power,” Kelly-Detwiler said. “This has real economic costs.”