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"In the recent past London’s ability to provide power to co-location and web hosting facilities has been stretched to the limit by the growing demand and the speed-to-market requirements of the industry. . . . Nevertheless, London Electricity are confident that they can meet demand—including the 20% increase expected over the next four to five years."
Unified Communications International
March 2001
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What do data centers, colocation facilities, server farms, Internet hotels and fiber nodes have in common? They're all big boxes filled with computers, hard drives, switches, routers and rectifiers, designed to store and channel digital information. We call them "high-density electronic loads," or HiDELs for short, and they have four intriguing characteristics:
- Highly dense power requirements. HiDELs have typically been built to handle power loads ranging from 1,000 to 2,000 watts per square meter, but we're aware of several facilities under construction that will have a connected capacity of 3,000 watts per square meter. That's 40 times the average demand for commercial buildings in the UK. One 6,000-square meter data center in Amsterdam can draw as much electricity per day as Schiphol airport. And in the UK, London Power Networks (the distribution arm of London Electricity) has received requests from colocation developers for as much as 1,600 MW—equivalent to 40 percent of London's winter demand. Even if their actual loads are lower than anticipated, or are ultimately reduced through intelligent engineering, their electricity connection requirements remain significantly higher than usual commercial sites.
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"London Power Networks is now investing in infrastructure at key points in London, which it has identified together with local development agencies....[This is] a €30m five-year investment programme, reinforcing its network around the West Ham and the Docklands area, as well as along the City fringe."
European Utility Retail
July 2001
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- Uncertain load factors. Facilities designers have anticipated load factors in the range of 80 to 90 percent. But their actual power draw depends on occupancy rates, the type of installed equipment and its uses, as well as advancements in server technology.
- High sensitivity to power supply disturbances. These facilities face huge losses if they go down due to surges, sags, or outages. Nearly all HiDELs are equipped with extensive on-site electricity storage and backup generation systems.
- Rapid growth. The HiDEL developers we have spoken with initially went through a growth spurt, building these facilities as fast as they could. Despite the recent slowdown in the high-tech sector worldwide, new facilities continue to open, and a revival in data center construction is anticipated in Europe in early 2002. Global Switch is in the process of more than doubling its server farm real estate in Europe in a single year, with over 100,000 square meters of new development to open by the end of 2002. And these facilities are beginning to appear in second- and third-tier cities, popping up near nodes in the fiber-optic network in Dublin, Milan, and Oslo.
Do HiDELs sound like perfect candidates for a wide variety of services and products offered by energy service providers (ESPs)? Maybe, but there's trouble in paradise. To quench HiDELs' incredible thirst for power, ESPs are likely to spend billions of dollars over the next few decades installing generation, transmission, and distribution infrastructure. But HiDELs are so new that no one knows whether they're here to stay. Could they turn out to be another short-term technological blip, leaving the high-tech scene as quickly as other formerly hot dot.com innovations? Many utilities are wondering whether they'll recoup their investments or be left holding the bag.
As part of our continuing effort to help ESPs make the most of the opportunities presented by the new information economy, we are undertaking a study aimed at answering these central questions:
- What are the advantages and disadvantages of having HiDEL customers?
- What can ESPs do to attract more HiDELs as customers, and what products and services do they most want?
- What can ESPs do to manage those HiDEL customers that are likely to be unprofitable?
As part of our in-depth research on the HiDEL sector in Europe, we plan to interview HiDEL industry leaders and laggards, as well as representatives from the ESPs that serve them. We'll measure power consumption in typical facilities, perform profitability analyses and investigate technological trends that are likely to have a bearing on this industry’s future. We will deliver four reports addressing the following topics:
There are currently about 50 companies in Europe developing HiDELs. They include such high-profile firms as WorldCom, Cable & Wireless, Exodus, KPNQwest, and France Telecom. There are also many small, one-site shops. What are the market demographics of the HiDEL industry? Who are the key decision-makers? What are their business models? What sorts of electronic equipment do they operate? What other systems, besides electronics, do they typically invest in, including buildings, air conditioning, humidification, power integrity protection, and security?
Most of the HiDELs we're aware of use relatively conventional systems to protect against power disturbances. What other technologies might be more effective? What additional power integrity services, such as monitoring and analysis, might ESPs offer to HiDELs? What infrastructure upgrades, such as power parks and transmission and distribution (T&D) hardening, could ESPs implement to deliver premium power to HiDELs? What other mechanisms might ESPs use to deliver power integrity products and services to HiDELs?
A key challenge for ESPs doing business with HiDELs is responding to these customers' demands in "Internet time." In a few well-known cases, HiDELs that planned to be online in six months were informed by their providers that it would take 18 months to design, purchase, and install the necessary electricity infrastructure. What are HiDELs' actual power requirements – in terms of both quantity and quality? What are the results of E Source's HiDEL profitability analyses? What products and services do HiDELs want to purchase from ESPs? How much are they willing to pay? What marketing messages do they respond to? What tools will help ESPs effectively attract HiDELs and deliver products and services to them? What techniques, such as innovative rate structures, can ESPs use to manage HiDELs that are likely to be unprofitable? We will also investigate energy-efficiency technologies and strategies such as water-cooled racks, rack spacing techniques, and combined cooling and power, which can help reduce a facility's overall power requirements.
The best approach to serving HiDELs depends on how they'll evolve in the future. How long will telecommunications and Internet infrastructure create a compelling need for HiDELs? How might data be stored and channelled under different scenarios of telecommunication industry development? What new ultra-low-power computing technologies are being spurred by the rise of handheld Internet devices, and how might these technologies change the computer and Internet server markets? How would these new technologies alter future HiDEL loads?
Subscriptions
In addition to receiving special introductory pricing, those who subscribe to the study before October 31, 2001 will be able to participate in preliminary discussions about the focus of the research. If a minimum number of subscriptions have not been received by November 31, 2001, the schedule and the deliverables may be adjusted accordingly.
Deliverables
- Four reports, each delivered at regular intervals, with the first (Structure of the HiDEL Industry) delivered in autumn 2001 and the last (Forecasting the Future) delivered in spring 2002.
- Subscribers will receive two printed copies of each report and will have unlimited access to download additional copies from the study's exclusive Web site.
For More Information
Contact your E Source sales representative for more information:
Gary Sunshine
Tel 303-444-7788
E-mail gary_sunshine@esource.com
Web www.esource.com
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