Mark Bramfitt - Utilities & IT

Better Than Free Power - No Kidding!

My colleagues in the high tech world may not quite believe this, but electric power on the open market is occassionally priced at less than free - producers will actually pay you to take it.

Here's what happens: utilities or customers enter into power supply contracts including ones that feature "take or pay" clauses for base load capacity. Hydroelectric plants fall in this category because there is a minimum amount of flow through the dam to preserve habitat downstream.

So how do we get to negative pricing? Let's say a utility has 1000 megawatts of take-or-pay base load resources, but in certain times of the year customer load drops below that. Now the utility is faced with paying the generator for power that can't be used. (Easy enough for a hydro operator to back off on production by altering the pelton wheel profile or bypassing the turbines completely.)

Now the utility would be happy to pay a customer to take the power as long as the price was less than what he had to pay the generator (better to pay you a penny a kilowatt-hour than the generators two cents).

In my experience, this is a rare occurence, maybe happening on winter nights when loads are lowest.

But that situation is changing in interesting ways. In the Pacific Northwest, wind producers have contracts that feature take-or-pay clauses, and the operators receive favorable tax treatment based on the actual power delivered to the grid. Bonneville now has something like 30% of their portfolio coming from wind, with much of the rest hydro.

So now, even on some summer nights, customer load isn't enough for the power generated by the hydro and wind plants, and there are significant costs and impacts involved in curtailing the power production. The wind operators in particular don't want to be curtailed because of those tax breaks.

The four state region is grappling with this issue in a positive way - seeking opportunities to engage customers who could use power during these surplus events. They're looking at traditional load shifting strategies like precooling office buildings and refrigerated warehouses, and time shifting electric water heating loads.

And...we're trying to think about how data centers could participate. I personally don't see a pre-cooling strategy being viable, but I keep coming back to thermal energy storage as an exciting solution for data centers. You get load shifting capability (and might even get paid for taking off-peak power sometimes!) along with redundancy in your cooling infrastructure.

I know of only one data center that has implemented a thermal storage system, but I can't help but think this is a larger market opportunity.

Google's Energy Use and "Equivalent Homes"

The New York Times reported today that Google has released information on the energy use of their global operations - dominated of course by data centers but including their offices.

I'm surmising now that Google has a data center footprint somewhere in the 225 MW neighborhood; I was off in some analysis I did for a client that pegged them at 300 MW, but I count that as close!

The article attempts to put the load figure into terms that are understandable to laymen, positing that 260 megawatts could serve several hundred thousand homes. That's a spot-on estimate in my experience.

In California, we often use the rule-of-thumb that a MW of capacity is needed to serve about 750 homes. It turns out that this estimate is really based on usage rather than peak demands. The average home in CA uses 750 or so kWh per month, or about 10,000 kWh per year. If you do the math, a MW of generating capacity at 100% load factor would therefore serve 750 homes or so.

But of course utilities do not have flat load curves. The big California utilities have load factors in the 30% range, meaning that you need something on the order of 3 MW of capacity to serve 750 average homes.

For the Google comparison, I fall on the side of using the energy equivalency rather than the demand, though for the best accuracy, we would compare Google's energy use to average home use, or demand to demand.

NYT: Water-side Data Center Cooling Gaining Traction

Nice article in the New York Times yesterday by James Kanter (in the Green Column of the Global Business Section) describing how some data center site selections are valuing locations with access to water which can be used for water-side cooling.

Notably, Google's next data center in Finland is located in a former paper mill, and will use sea water for cooling.  Eminently doable of course, though more expensive than using freshwater given corrosion and usually higher pumping costs. Liked the statistic that Google's five owned data centers have on average a 16% overhead for cooling (and I suppose power delivery and conditioning).

I'm not sure that I agree with the conclusion that sites with ample water supplies are less suitable for on-site generation - the assumption is that the sites will generally have climate conditions that won't favor solar PV.

First, solar PV isn't the only technology available for on-site generation, though it is particularly apt for peak load shaving. Fuel cell technology may have broader advantages by obviating some power conditioning equipment, for example.

Second, as the Google example shows, if you're using seawater for cooling, that only limits your site selection to coastal locations, and you could certainly select sites with ample PV exposure, balanced against ambient temperature conditions.

The upshot though is that leading data center operators are starting to think like industrial plant developers, carefully evaluating the inputs of their cost structures, and thinking about ways not only to drive up efficiency, but to use "natural" resources like cooling water that can lower costs.

 

 

Rethinking Self Generation for Data Centers

Just because I have had a long utility career doesn't mean that I am inherently against self-generation - in fact I have represented both sides of the opportunity, both promoting co-generation and trying to thwart it.

And I think utilities are now in that gray middle area, wondering if distributed and self-generation can be implemented to their benefit, and even be a business opportunity.

For data centers though, I have consistently minimized the applicability of self-generation for what I think are sound reasons.  Certainly, data centers (especially those without free-cooling) are an attractive load for generation, given an essentially unity load factor.  That means a capital investment in generation equipment can be recouped quickly.

But on the flip side, there is no opportunity to easily use reclaimed heat (absorption chilling, anyone?);utilities offer their lowest rates to large, high load profile customers; and the reliability of rotary generation equipment of any kind doesn't come close to what data centers are looking for.  (Even large-scale, sophisticated cogeneration systems typically require maintenance downtimes stretching into weeks per year).

Only in...San Francisco (I Hope)

Perhaps just a bit difficult to see, but this is one of at least a few "solar-powered billboards" in San Francisco (the panels are mounted at the bottom).

I don't know this for sure, because the power conditioning gear and service panel aren't visible, but I highly doubt that there is a battery system in this installation, so let's assume we're looking at a typical grid-connected (parallel) set up.

That means that all of the power generated goes to the utility, and none of the power is used by the billboard lighting, which after all is only on at night.

What could be wrong with that?

I suppose nothing, really, except that it goes to the heart of the issue of regulatory fairness and misuse of environmental perception. The sentiment goes: "I have solar PV panels on my home/business/facility, so I'm power/grid/environmentally neutral."

These installations are most certainly not grid neutral. There is still a utility service point, with transformer, distribution, transmission, and power plant infrastructure to support it. 

The problem in California is that under net-metering tariffs, the bill board owner could "zero-out" their bill and pay for none of the carrying costs of that infrastructure. They simply have to size the solar PV to generate the same amount of power used by the lighting on an annual basis.

That means the neighbors do pay more, by the way, because they now carry the infrastructure costs. And that is the heart of my criticism, not of solar or distributed generation of any type, but of the manner in which it is treated in the regulatory arena.

White Paper: Power Carbon Content

Working hard on a white paper that describes how best to go about evaluating the carbon content of the power delivered to you by your utility.

It's not as easy as it sounds, though there are a couple of places you can go to get a reasonable picture.  I'll point out the limitations of California's mandated Power Content Label, why the federal government information resources are only good as far as they go, and why data centers in particular may overreport their carbon emissions if they use the average carbon content figures from their utility.

And if this wasn't difficult enough, I'm going to take a stab at a methodology for accurately predicting power rates - again, the average rate figures provided by utilities are poor predictors of costs for high load factor customers like data centers. No promises on when this one will be done, as I expect the case study comparing California utility rates will require a pretty detailed spread sheet analysis.