Power Problem: Data center growth equals the needs of 200,000 homes

Auckland electricity distributor Vector predicts that power demand from power-hungry data centers will reach 500 megawatts (MW) within the next five years.

This is equivalent to the electricity needs of 200,000 households.

Fund managers say data
The centers have become “hot,” especially since innovations such as artificial BroadCast Unitedligence have increased their demand.

However, the growth has sparked controversy overseas.

This week, NZX-listed infrastructure investor Infratil easily raised $1 billion to expand its data centres, particularly CDC, which has facilities in New Zealand and Australia.

Infratil’s 48% investment in CDC is now worth $4.5 billion, 10 times its initial investment in 2016.

Data centers usually have High power demand Relative to other connections on the network.

Vector said the average demand from a data center on the Vector network is about 20 megavolt-amperes (MVA), which is the same capacity needed to power 8,000 homes.

In comments provided to the Herald, Vector said: “Based on data centres already connected and confirmed plans with us over the next few years, we can see the total capacity required for data centres over the next five years reaching approximately 500MW.”

“However this depends on how quickly they can scale their services to customers,” the company said.

Vector said it works closely with customers to understand their needs so that investments in its network keep pace with demand.

“This is particularly important for data centers because their capacity needs grow over time, with capacity starting out low when a data center opens but growing as cloud storage demand grows,” Vector said.

“Data centres, like any other customer, need to pay for connectivity and any associated upstream costs incurred in upgrading capacity to provide connectivity.

“This ensures that those driving the investment in network growth can cover the cost of that investment.”

Data centers aren’t the only thing driving network growth, Victor said.

The company also sees plenty of growth from other factors, including electric vehicles, buses and ferries, as well as continued commercial and residential development.

Vector, listed on the New Zealand Stock Exchange, is New Zealand’s largest electricity and gas distributor, owning and operating a network throughout the Auckland region. The company has 612,000 electricity connections.

National power company Transpower acknowledged that data centers would further increase electricity demand, but said there was still a steady stream of renewable energy generators looking to supply the grid.

Transpower executive general manager of grid development John Clarke said several recent announcements for data centres in New Zealand showed that developers saw real potential in connecting to a highly renewable grid while taking advantage of low ambient temperatures providing free cooling.

Currently, the data centers that have been announced are designed to connect to the local line network rather than directly to the Transpower grid.

“We have received some initial enquiries from developers exploring options to connect data centres directly to the grid, but only two have progressed to the consultation stage,” Clark said.

Transpower collects load forecasts from local line companies for the next 15 years.

Studies have shown that demand on data centers is fairly constant throughout the day and throughout the year.

“However, we are interested in whether they have the ability to change demand and will explore this as part of our ongoing work to assess the impact of new load types, including data centers,” Clark said.

New Zealand has a market-driven system rather than a centrally planned generation, so there needs to be an investment case to attract generators to come here.

Clark said Transpower continued to see a steady stream of new connection enquiries from generators interested in connecting to the grid, with 14.2GW of new renewable energy generation projects currently at the investigation or development delivery stage.

“As connection enquiries continue to turn into committed projects, the country is on track to meet the 68% growth in electricity demand we forecast between 2020 and 2050,” he said.

Governments around the world are stepping up scrutiny of data center construction, concerned that their huge energy consumption will put undue pressure on national climate goals and power grids.

Ireland, Germany, Singapore and China, as well as a U.S. county and Amsterdam in the Netherlands, have all imposed restrictions on new data centers in recent years to comply with stricter environmental requirements, with London’s Financial Times report.

this Financial Times The firm said Ireland, a popular location for cloud computing companies such as Google and Microsoft to build server farms because of its low taxes and easy access to high-capacity undersea cables used to carry global internet traffic, posed the greatest threat to new projects.

Jamie Gray is an Auckland-based reporter covering financial markets and primary industries. He joined the Herald in 2011.