Probably a couple of quick posts that react to discussions I had after my presentation at the GSMI Green Data Center Conference in Dallas last week...
You never know what questions you'll get at the end of a presentation, and after delivering a presentation describing how utilities and the data center and IT industries are becoming increasingly intertwined, I was pleased to get more questions about utility regulatory policy than on data center issues.
One of the questions, which generated quite a bit of ongoing discussion, was why the US is not building nuclear power plants as a means of addressing climate change, and energy security and availability.
My short answer is that beyond technical issues and even siting concerns, regulatory policy in the US precludes utilities or merchant generators from developing power plants of all types. Simply put, it's hard to finance what are often multi-billion dollar projects without regulatory assurance that cost recovery in rates will happen.
We've seen that in California, where our regulatory commission is allowing the investor-owned utilities back into the power generation business becasue the private market was abandoning projects mid-stream, and certainly not building enough capacity to meet projected needs.
This article from today's New York Times describes the only current nuclear power plant project in the US, describing the regulatory challenges as well as the headwinds of cheap natural gas and falling prices for renewable generation (notably wind, not solar).
One of the central points of my presentation was that power portfolios in the US are getting cleaner, but that is coming at a cost. For data center developers, understanding the future price for power at a given utility is as important as knowing the current costs. Utilities that have to move to cleaner power portfolios are going to see the largest percentage rate hikes.