Speaker 1: Hi, I'm Dana Perkins and you're listening to Switched on
Speaker 1: the B n F podcast. So whatever device you're listening
Speaker 1: to this on right now, there is a data center involved.
Speaker 1: This podcast is out there in cyberspace, which actually isn't
Speaker 1: an intangible space at all. Cyberspace is comprised of many,
Speaker 1: many data centers in warehouses with significant energy demand in
Speaker 1: Europe across five key geographies the UK, Germany, Ireland, the
Speaker 1: Netherlands and Norway. This demand could grow by eight by
Speaker 1: the end of the decade. In this same period between
Speaker 1: now and wind and solar power are projected to approach
Speaker 1: six of total power generation. So what is a grid
Speaker 1: with a lot of renewable energy need well flexibility to
Speaker 1: handle the times when the sun isn't shining and the
Speaker 1: wind isn't blowing so hard. The question we're exploring today
Speaker 1: is could data centers and all of the backup energy
Speaker 1: that they have become a distributed energy resource and help
Speaker 1: provide grid flexibility. Michael ken Effect and Sarah Raza from
Speaker 1: B and E F worked on a report titled Data
Speaker 1: Centers and Decarbonization Unlocking Flexibility in Europe's Data Centers. This
Speaker 1: was done in partnership with Eaton and stack Craft. As
Speaker 1: a reminder, B and E F does not provide investment
Speaker 1: or strategy advice, and our full disclaimer is going to
Speaker 1: be at the end of the show. And now let's
Speaker 1: speak with Michael and Sarah about data centers and GRIT flexibility.
Speaker 1: I am joined today with Michael and Sarah to talk
Speaker 1: about data centers, but not in the way that you
Speaker 1: may think about them. I think oftentimes when we're thinking
Speaker 1: about data centers, were actually thinking of the intense energy demand.
Speaker 1: Immediately what comes to mind actually is bitcoin mining. But
Speaker 1: that is a conversation maybe for another show. But we're
Speaker 1: here today to talk about data centers as a force
Speaker 1: and source of flexible energy demand. So Sarah and Michael,
Speaker 1: you very much for joining today. Thanks data So let's
Speaker 1: start at the very beginning with what specifically we're talking about.
Speaker 1: What is a data center? Paint a picture in my
Speaker 1: mind of what this looks like. So a data center
Speaker 1: is a physical facility that organizations would use to house
Speaker 1: their applications and data. A data center's design is basically
Speaker 1: sort of based on a network of computing and storage
Speaker 1: resources that enable that delivery of the shared applications and data.
Speaker 1: And if you're interested, the kind of key components of
Speaker 1: a data center include routers, switches, firewalls, storage systems, servers,
Speaker 1: and all sorts of other computer resources. So I mean
Speaker 1: essentially everything that we interact with in the electronic world.
Speaker 1: The recording platform we're on right now, my Netflix, and
Speaker 1: the bitcoin that I don't own. All of those things
Speaker 1: are stored in a data center somewhere exactly. And the
Speaker 1: type of data center varies, right. So the main kind
Speaker 1: of two categories that we have and that we looked
Speaker 1: at in this report our co location and hyper scale
Speaker 1: data centers. And you may have heard both of those,
Speaker 1: and in case you're not entirely sure what they are.
Speaker 1: So a co location data center those built for the
Speaker 1: purpose of renting space for servers and other computing hardware
Speaker 1: to clients. So you know, you might get a company
Speaker 1: who says, right, we need one room housing x amount
Speaker 1: of servers for us, and then and next door to
Speaker 1: that a different company. A hyper scale data center often
Speaker 1: called a self build. These data centers are basically owned
Speaker 1: and operated by cloud service providers like AWS, Microsoft or
Speaker 1: Facebook or Apple. To put this in context, how energy
Speaker 1: intensive are these and how big is the scale of
Speaker 1: the energy demand here, So dass it is are very
Speaker 1: large buildings that consume huge amounts of electrical power, not
Speaker 1: only for the servers themselves actually I guess that we
Speaker 1: said all your our bitcoin and podcasts live upon, but
Speaker 1: then also the supporting so the exporting service like the
Speaker 1: cooling for the building as well, which is quite a
Speaker 1: significant demand because they can overheat, right because their energy intensive,
Speaker 1: they get warm. Yeah, exactly, there's lots lots of really
Speaker 1: cool things looking at the efficiency of cooling for these
Speaker 1: buildings to really though that's only part of it for
Speaker 1: most of the demand, Like if the cooling partment makes
Speaker 1: about of overall electrical demand and the data center, most
Speaker 1: of that computing power and energy goes to doing the
Speaker 1: applications and hosting the data itself. So these are actually
Speaker 1: really sophisticated energy resources. They have their own on site
Speaker 1: backup power generators, they have their own batteries on site
Speaker 1: as well, so they're really interesting. Legs actually can be
Speaker 1: not just connecting to the grids and causing more and
Speaker 1: more issues with supply or with congestion, But I should
Speaker 1: be more of this solution, you know, like how they
Speaker 1: can interact and be more responsive to what the grid needs. Okay,
Speaker 1: so we've established that they're definitely a source of energy
Speaker 1: demand and will to the flexibility in a second, but
Speaker 1: just before we get too deep into that, and I
Speaker 1: think it matters for us to point out which countries
Speaker 1: in kind of which part of the world you guys
Speaker 1: specifically looked at, because this is a bit of a
Speaker 1: case study. It seems like everything is a bit unique here.
Speaker 1: So we've done a case study on some specific countries
Speaker 1: for some specific reasons which will hopefully have applicability to
Speaker 1: other parts of the world. And maybe you could shed
Speaker 1: some light on that. What did we look at? Yeah, so, Danna,
Speaker 1: you might be familiar with the flat D markets. I
Speaker 1: don't know if you've come across that. No, I have
Speaker 1: not come across. Said so, most data center capacity in
Speaker 1: Europe is concentrated in five countries Germany, UK, France, Ireland
Speaker 1: and the Netherlands, and that kind of capacity is almost
Speaker 1: in five of those cities, and that's referred to as
Speaker 1: flat D. So these markets are the largest for a
Speaker 1: bunch of reasons, Like Frankfurt, London and Amsdam obviously have
Speaker 1: the largest Internet exchanges Dublin is a data center hubs
Speaker 1: specifically for you know the history of large technology companies
Speaker 1: headquartering in Ireland. But we actually decided to yes, focus
Speaker 1: on the UK, Ireland, Germany and the Netherlands, which, as
Speaker 1: you guys just heard, you know, they're four of the
Speaker 1: largest markets. But we also chose to focus on Norway,
Speaker 1: which is a very sort of emerging market could potentially,
Speaker 1: you know, in the future accommodate a lot of green
Speaker 1: and flexible data centers. Does every country have their own
Speaker 1: market or do they sometimes by this data center space
Speaker 1: from another country When we talk about European data centers,
Speaker 1: A lot of that is really in these five countries.
Speaker 1: I mean we we are seeing more sort of data
Speaker 1: centers cropping up in Italy and Croatia and places that
Speaker 1: traditionally weren't massive hubs for data centers. And I think
Speaker 1: also a lot of the newer places that are seeing
Speaker 1: a lot more build our due to you know, more
Speaker 1: land being available and milder climate, perhaps near more solar
Speaker 1: and wind resources. So what about the future of this
Speaker 1: space in terms of demand? Because I don't see myself
Speaker 1: deleting any of my children's baby pictures anytime soon they're
Speaker 1: going to stay on that cloud server forever. Is this
Speaker 1: growing rapidly? Is this one of those kind of up
Speaker 1: into the right or almost straight up energy demand stories.
Speaker 1: So in this report, our actual goal here in one
Speaker 1: of the you know, one section of the report was
Speaker 1: to actually extrapolate and understand what demand would look like
Speaker 1: in twenty thirty. So we kind of looked at current
Speaker 1: data center power demand in one data center actricity demand
Speaker 1: and you know, project that out until twenty thirty, and
Speaker 1: kind of some of our conclusions here were that this
Speaker 1: level of growth, you know, is not slowing. You know
Speaker 1: that there is obviously uncertainty around how much data centers
Speaker 1: in Europe will grow. So for the twenty thirty forecast,
Speaker 1: we actually built three different scenarios. So we built a low,
Speaker 1: a medium, and a high growth and these scenarios assume
Speaker 1: sort of different compound downual growth rates, taking into account
Speaker 1: a lot of other things within the data centers to
Speaker 1: reflect those uncertainties regarding planning, permission, constrained land options, available
Speaker 1: power connections. So it's definitely a difficult task in all
Speaker 1: about scenarios. You know, data centers do grow across all
Speaker 1: five of those regions. Since I was kind of under
Speaker 1: sun nerves less slightly, there should a huge amount of
Speaker 1: work of building from a database of how much capacity
Speaker 1: of data centers exist in these five countries, and we
Speaker 1: use that they're actually too while amount of capacity in
Speaker 1: each Markish could be the same, are are less even,
Speaker 1: but actually the impact they have on the grid is
Speaker 1: really relevant to the size of the grid that they're
Speaker 1: connected to. There's a big range there. So m I say,
Speaker 1: like like Ireland and UK might have similar amounts of
Speaker 1: data center capacity connected while in the UK doesn't just
Speaker 1: make up about two and a half percent of the
Speaker 1: amount of electricity the UK consumes. In Ireland, data centers
Speaker 1: today consumed by fourteen or fift of all of Ireland's
Speaker 1: electrical generations. So the big gap between the impacts that
Speaker 1: the data centers can have on grids. Okay, so they
Speaker 1: have an impact, and I think we've set this up.
Speaker 1: Let's go to the flexible part of the demand. What
Speaker 1: is the opportunity here because I'm thinking as we talk
Speaker 1: about flexible demand, we're not going to be able to
Speaker 1: take them offline. This is there's a security of supply
Speaker 1: issue here. So what are the choices available to data
Speaker 1: centers to build that flexibility. I mean, this is kind
Speaker 1: of the crux of it, and I guess what we
Speaker 1: really wanted to dive into with the reports. When you're
Speaker 1: looking at a data center, there's several sources of flexibility available,
Speaker 1: so you can have the load. So actually if that
Speaker 1: is the applications and the data's going on, and you
Speaker 1: could shift that by time, you know, so if you've
Speaker 1: got something that doesn't have to happen at two o'clock
Speaker 1: in the day, and you can actually do that too
Speaker 1: a m at night, let's shift that also if something
Speaker 1: can happen in Germany, especially the German grids really congested
Speaker 1: at the moment, how we can shift that computational task
Speaker 1: to France where actually there's a it's a far more
Speaker 1: relaxed grid. What is the load you can shift us?
Speaker 1: As I was saying earlier, is a lot of electrical
Speaker 1: equipment on site, so you have the up Yes, so
Speaker 1: that's the uninterruptible power supply. So this is a battery
Speaker 1: that pretty much every data center will have that if
Speaker 1: the grid goes down, which is a huge issue for
Speaker 1: data stays, as you said, das do not want to
Speaker 1: go down they get paid to be online when we
Speaker 1: want to have our podcasts, and we all get very
Speaker 1: upset when our podcasts aren't there. I certainly do. So
Speaker 1: they have what they call the UPS and the power
Speaker 1: supply that will come on instantly. The power supply goes
Speaker 1: down and we'll run for about five ten minutes until
Speaker 1: the backup generators come online. Because it's like starting up
Speaker 1: your card, you have to turn the engine on, it
Speaker 1: takes the while for the engine to warm up. So
Speaker 1: UPS is a battery that can jump in. Every dozener
Speaker 1: has a backup generator. The problem is most of those
Speaker 1: are diesel. We don't want to use diesels for flexibility. Ideally,
Speaker 1: these backup generors will never be run. There are alternative options.
Speaker 1: You could use hydrogen, new options that if those were installed,
Speaker 1: maybe we can actually start to use that backup generation
Speaker 1: to do more flexible things with it. Well, so first
Speaker 1: of all, how much flexibility are you talking about? Minutes, hours, days?
Speaker 1: What's the duration of time that's being proposed here. It
Speaker 1: will all be quite short. I think it does vary
Speaker 1: on those different aspects of the load shifting. The UPS
Speaker 1: and the backup generation. The ups to be very short
Speaker 1: we're like, we're talking it's seconds to two minutes. Also,
Speaker 1: does centerpposers wary of using the UPS to do these
Speaker 1: interesting things for the grid because it's a backup plan,
Speaker 1: then you don't have a backup plan for the backup
Speaker 1: plan exactly. So if there's a lot of hesitation, and
Speaker 1: we can definitely talk about that in the future. But
Speaker 1: were those actually those ups can work really well? Is
Speaker 1: to provide frequency response to the grid. This is a
Speaker 1: very big topic get too. But you can think about
Speaker 1: frequency response as like it's the as frequency as the
Speaker 1: heartbeat of the grid. So the grid needs to need
Speaker 1: suppose a fifty hurts, so that's fifty times second. And
Speaker 1: how the UPS could work with like a pace maker.
Speaker 1: When the fifty hurts goes a little bit too higher,
Speaker 1: a little bit too low, the UPS the pacemaker kind
Speaker 1: of gives it a shock to keep the hurts, to
Speaker 1: keep the heartbeat going at that healthy point all of
Speaker 1: fifty hurts. So that's kind of one of the main
Speaker 1: uses we saw. So let's say the backup generation was
Speaker 1: built into the system with the intention to use it,
Speaker 1: and you mentioned a number of solutions. Okay, so bio
Speaker 1: fuels one of them. I definitely am seeing this coming
Speaker 1: very much back into the lexicon after a decade of
Speaker 1: not being talked about quite as much. But then you
Speaker 1: mentioned to other things batteries and hydrogen, which as of
Speaker 1: right now are very expensive sources of energy. Is there
Speaker 1: a point at which they become economically viable because the
Speaker 1: flexible demand is kicking in at a time when the
Speaker 1: grid really needs it, so the pricing signal is there
Speaker 1: or will it always be a commitment to let's say,
Speaker 1: certain emissions profiles as opposed is too Actually I don't know.
Speaker 1: I mean, what's what's the what's the incentive? So you're
Speaker 1: hitting on a great point of the incentives and I
Speaker 1: definitely want to get to that in terms of these
Speaker 1: two technologies, so like batteries and hydrogen, I think to
Speaker 1: focus on those. There's only one data center in the
Speaker 1: world that we know that is even at the trial
Speaker 1: stage of using a large battery as backup Google as
Speaker 1: a data center in Belgium. So that's really interesting. See
Speaker 1: they're already thinking about the next step. Microsoft is pretty
Speaker 1: keen on hydrogen. It's running a couple of projects at
Speaker 1: the moment, and Microsoft actually set a goal to be
Speaker 1: diesel free by twenty thirty. So there's an end goal there,
Speaker 1: and it's gonna be interesting, Actually, what are the options
Speaker 1: they're going to use to try and hit that goal? Because,
Speaker 1: as we're saying a number, but it's the vast majority
Speaker 1: of backup generation is I think that green incentive might
Speaker 1: be one of the best pushes we have to tapping
Speaker 1: into that data center flexibility. And you're seeing these these
Speaker 1: two leaders of Google and Microsoft. You know, they're starting
Speaker 1: to talk about seven remove of energy matching. You know,
Speaker 1: shifting your load is going to make that a whole
Speaker 1: lot easier if you can do that. And are they
Speaker 1: sitting in the benchmark how corporations are going to think
Speaker 1: about the energy procure image? Eliot at that benchmark ten
Speaker 1: years ago with p P A S. They setting that
Speaker 1: benchmark again today with this twenty seven renewable energy matching
Speaker 1: that other corporations will have to keep up with and
Speaker 1: years to come. Now for a very short break, stay
Speaker 1: with us out of curiosity the companies that are operating
Speaker 1: and running these data centers. I mean, you mentioned Microsoft
Speaker 1: and Google and companies that I know have net zero targets,
Speaker 1: in some cases very ambitious ones. We maybe even negative
Speaker 1: missions targets. But what about the rest of the industry.
Speaker 1: Is there a high number of companies with net zero
Speaker 1: targets in this I don't don't have been called too
Speaker 1: many edge It's on fair because obviously those those companies
Speaker 1: have been so public with it. You, i think, said Sarah,
Speaker 1: spoke through a number of these co location providers as well.
Speaker 1: But this is actually gets pretty difficult between let's say,
Speaker 1: the hyper scalers of those cloud operators we know well
Speaker 1: and these co location companies because on the one hand,
Speaker 1: the hypersco operators, they are very well resourced, you know,
Speaker 1: some of the wealthiest companies in the world, and the
Speaker 1: others had you had these co location operators who operate
Speaker 1: the majority of data centers we see, but they are
Speaker 1: not as well resourced. I think Equinics were the largest
Speaker 1: data center collocator operators has a market cap of by
Speaker 1: thirty billion, as opposed to Google I think, which is
Speaker 1: at one point five trillion. Amazons around that two trillion
Speaker 1: mark as well, So it's kind of a it's difficult
Speaker 1: going to compare them. Also, the big companies have far
Speaker 1: more control over what they can do, like they own
Speaker 1: all their own data centers, they decide what servers that
Speaker 1: go into them. They know the ass that are going
Speaker 1: through them, what their users are using it. For collocation
Speaker 1: oppertors don't have that visibility. You know, companies come in
Speaker 1: to build their servers in there. They have to serve
Speaker 1: their customers where it's called an s l A, a
Speaker 1: service level agreement, which can be quite restrictive to what
Speaker 1: these co location companies can do. Yeah, and I think
Speaker 1: just to add to that, exactly what Michael said, it
Speaker 1: is a lot easier I think for hyper scale as
Speaker 1: compared to co location. That's another reason why we looked
Speaker 1: at Norway as an emerging market because of a lot
Speaker 1: of it's you know, a lot of the integration and
Speaker 1: renewables in Norway, and there's a provider I think Green Mountain.
Speaker 1: Green Mountain uses add percent renewable power because obviously one
Speaker 1: of the main challenges in the data center industry is
Speaker 1: ensuring continual cooling throughout the day, and one of the
Speaker 1: benefits of being somewhere like Norway is you know, you
Speaker 1: can they can utilize some of the cold waters from
Speaker 1: the deep Norwegian areas located adjacent to the facilities of
Speaker 1: the data centers, which again have so much land. So
Speaker 1: I think that we are seeing more and more colocation
Speaker 1: providers and operators, you know, prioritize net zero simultaneously with
Speaker 1: the hyper scalers. What's the policy environment for these data
Speaker 1: centers and our countries welcoming them in or they something
Speaker 1: where they're saying, you know, literally my grid has so
Speaker 1: much demand, You're going to have to find somewhere else.
Speaker 1: So I mean I can just speak to sort of
Speaker 1: Ireland Breedflely. Obviously, growth in Ireland, you know, you would expect,
Speaker 1: typically as someone who knows nothing about data centers, you know,
Speaker 1: out of those five regions, you'd immediately be like, oh,
Speaker 1: you know, we expect Ireland to be have the biggest growth,
Speaker 1: just because we know that you know all the aws
Speaker 1: and you know Google's data centers. But actually it might
Speaker 1: not be as rapid as it has been in the
Speaker 1: last few years. And that's that's really due to Ireland's
Speaker 1: recent sort of policy proposals, and some of those include
Speaker 1: limiting new data center build unless certain flexibility requirements are met.
Speaker 1: You know, there are a lot of pushbacks from Irish
Speaker 1: citizens who are concerned about power at climate issues, and
Speaker 1: I think unlike somewhere like Germany, most data centers in
Speaker 1: Ireland are really concentrated in one major city, Dublin, and
Speaker 1: Dublin's electricity grid was not built to cater for such
Speaker 1: high demand from data centers, which I think has resulted
Speaker 1: in network supply constraints. Michael, and sure you can speach
Speaker 1: this little bit more, but you know, in June last year,
Speaker 1: the Commission for Regulation of Utility is the CRU proposed
Speaker 1: that the Irish network operators a grid and ESP networks
Speaker 1: and which are kind of the largest, proposed that they
Speaker 1: prioritize data center connection requests outside of network constrained areas,
Speaker 1: which means there was a lot of uncertainty around you know,
Speaker 1: estimating Ireland growth, especially for the future of thirty or
Speaker 1: more proposed data centers in and around Dublin Islands. Obviously
Speaker 1: is we can tell by accident is quite close to
Speaker 1: my heart and Ireland is dozens in Ireland's consume four
Speaker 1: of the car contre's entire electricity consumption. Our estimates are
Speaker 1: twenty thirty, which actually aligned with what are grid the
Speaker 1: grid operator is looking at, is about like a quarter
Speaker 1: of all Irish electricity consumption will be data centers. That's
Speaker 1: a big number, just to give a scale. In Germany,
Speaker 1: which is the largest data center capacity with a much
Speaker 1: charger grid, that numbers about one point five percent, So
Speaker 1: doesn't Actually they are scaring the Irish grid operator and
Speaker 1: there have been quite drastic proposals that Sarah just mentioned,
Speaker 1: but that's slightly different to actually what we're seeing in
Speaker 1: other regions. So in Ireland it's actually a concern of
Speaker 1: security of supply. The Irish grid will not be able
Speaker 1: to meet you know, will not be able to meet
Speaker 1: all of the demand as well as meeting gridade energy targets,
Speaker 1: which is no electricity by twenty thirty. What we see
Speaker 1: in other regions, the most notably Abstam, which introduced a
Speaker 1: ban for an entire year. They said you could not
Speaker 1: build any more new data center is They have never
Speaker 1: lifted that, but said you can only build a certain
Speaker 1: amount by thirty and they have to be in these
Speaker 1: particular regions. Fand first is talking to a bunch of
Speaker 1: proposals as well to like forced data centers to build
Speaker 1: in particular areas, and I think that's maybe some of
Speaker 1: the lessons to learn for like emerging regions that are
Speaker 1: looking to attract data centers is to think a bit
Speaker 1: more about where these data centers are going to sit
Speaker 1: on the grid. And it's actually the issues are not
Speaker 1: just purely the grid and the capacity of the grid
Speaker 1: locally to take it, but also the amount of land.
Speaker 1: You know, the dozens are very really big things, and
Speaker 1: they take up a lot of land that could be
Speaker 1: used for you know, warehouses or offices. Reneable energy are
Speaker 1: exactly the actually it weren't the rules proposed. And find
Speaker 1: first is that that sid just can't be located near
Speaker 1: public transport hubs because they don't actually have many people.
Speaker 1: So they actually would rather push, you know, a warehouse
Speaker 1: that has a lot of staff, put that near the
Speaker 1: public transport hub. And what is the hourly demand profile?
Speaker 1: Look for them? Is it constant or does it have
Speaker 1: a peak? It's flash, it's a flat so so there
Speaker 1: you it's pancake, but the rest of the grid is not.
Speaker 1: And you know, I'm guessing many of the people listening,
Speaker 1: although not all, know that when people come home in
Speaker 1: the evening on a regular day, now that many people
Speaker 1: are going back to work and going about their days
Speaker 1: a bit more than they maybe had been in the
Speaker 1: last two years, you see this very peak and trough
Speaker 1: throughout the day in terms of demand profile. So data centers,
Speaker 1: if they're able to take some of their demand offline,
Speaker 1: presumably in the evening when everybody gets home, they're sort
Speaker 1: of solving part of the demand that they take. They're
Speaker 1: at least solving part of the demand that they are
Speaker 1: adding to the grid. They're reducing the aggregate demand added
Speaker 1: to the grid if they're reducing that peak at certain
Speaker 1: points in the day, because the alternative, I suppose it's
Speaker 1: just to build more energy even with the diesel generators.
Speaker 1: Depending upon the grid you're on, is there a scenario
Speaker 1: where the diesel generators still lead us to a lower
Speaker 1: overall emissions environment, And so yeah, you can talk about
Speaker 1: actually does it to demand on what the profile looks like.
Speaker 1: So I think it's funny every talks a lot about
Speaker 1: electric vehicles. They might demand they're going to break to
Speaker 1: the grid, and it will, but actually data centers, depending
Speaker 1: on the region, we'll actually have more demands. So in
Speaker 1: Ireland data centers there will be four times in thirty
Speaker 1: centers be four times the demand of electric vehicles in
Speaker 1: tear what hours in Netherlands has twice the amount of
Speaker 1: electric vehicles use, and there's so much to talk about
Speaker 1: smart hairs for electric vehicles and shifting that load around
Speaker 1: and doing really interesting things, but doesn't as though they
Speaker 1: are a larger source of demand, nor really talks about it.
Speaker 1: I guess it's harder for us to visit. You know,
Speaker 1: we know that tesa looks like we see it on
Speaker 1: the road and we can see it plugged it and charging,
Speaker 1: but us in arms, they're obscure. We don't see them
Speaker 1: and the electricity they use. So if we can shift
Speaker 1: that load around, that kind of a huge impact. The
Speaker 1: problem is are you asking us to listen to our
Speaker 1: podcasts at different times of the day. We listen to
Speaker 1: our podcast like to two to am mid night, it
Speaker 1: was about six pm in the evening. Like it comes
Speaker 1: down to how we consume our digital goods and actually
Speaker 1: where are we willing to shift that or are there
Speaker 1: other ways that can be shifted? Which parties are most
Speaker 1: interested in watching this development? And you know pilot projects
Speaker 1: come to fruition. Is it some combination of the grid operators,
Speaker 1: the data center providers or the data center providers with
Speaker 1: net zero targets, or the countries and the policymakers themselves
Speaker 1: thinking about the overall grid impact for their country, actually
Speaker 1: have the grid operators, the data center operators, and I
Speaker 1: guess I think governments as well. And this is actually
Speaker 1: where we're Ireland is the interesting case study that the
Speaker 1: good operator is saying it's gonna be really hard, you know,
Speaker 1: to accept more of these data centers datapers want to
Speaker 1: continue to build in Ireland, and then the government is
Speaker 1: in this tough position of yes, we want this invert
Speaker 1: investment from these companies into the country, Yes we want
Speaker 1: to hit our removal the energy targets. But then we
Speaker 1: have the good opperators saying you can't have these two things.
Speaker 1: It's an unfortunate conflict. It's almost like now that the
Speaker 1: regulations that were proposed that Sarah mentioned earlier data to
Speaker 1: operations actually need to care about this now because let's
Speaker 1: you know, let's be honest. Dat centers role is not
Speaker 1: to serve the grid. Their role is to serve us.
Speaker 1: It's to serve their users is to a kid to
Speaker 1: to wear out. The to wear it out is to
Speaker 1: make sure that our podcasts are there when we when
Speaker 1: we want to listen to them. So but these new
Speaker 1: rules that i'll be introduced or making data center operators
Speaker 1: to have to respond and if they want to avoid
Speaker 1: causing these kind of unfortunate situation sations were seeing in
Speaker 1: Ireland and in frank first and and in Amsterdam, which
Speaker 1: causes a lot of bad public pushback. You know, you
Speaker 1: do see there is a letter European MPs MVPs are
Speaker 1: receiving petitions to ban new build of data centers. You know,
Speaker 1: it's not good press. And there's that move to be
Speaker 1: more engaged, to be more responsive and actually maybe take
Speaker 1: the lead and maybe get ahead of any regulation that
Speaker 1: might come in. It could be a much more proactive
Speaker 1: saying that dataset or operators can do. Where do you
Speaker 1: think we're going to see development in this space? First?
Speaker 1: As we're watching it progress, what are the signs of
Speaker 1: life that you're looking for to see things really start
Speaker 1: to move forward. Recent growth has been driven by cloud
Speaker 1: computing demand, and I think an interesting kind of observation
Speaker 1: to look forward to the future would be, you know,
Speaker 1: how does that kind of split look between hyper scale
Speaker 1: and co location. The report kind of states that you know,
Speaker 1: the UK and Germany are really lead strongly by co
Speaker 1: location data centers. You know, I think Germany has pretty
Speaker 1: much zero hyper scale data centers, but Google has actually
Speaker 1: made a commitment to build one in Frankfurt. So I
Speaker 1: think looking forward to see, you know, how that split
Speaker 1: will look and how those countries will change in that
Speaker 1: split between co location and hyper scale, and how that
Speaker 1: increase in cloud computing will change that. I think also
Speaker 1: a lot of new build has actually been and what
Speaker 1: we've seen from when we did this analysis was actually
Speaker 1: site expansions rather than brand new sites. So Dublin, London,
Speaker 1: Amsterdam and Frankfurt, which are kind of the four main
Speaker 1: cities that we see within those kind of countries that
Speaker 1: we looked at, are kind of very mature data center market.
Speaker 1: I think the large operators there are kind of shown
Speaker 1: little to no interest to buy brand new sites, and
Speaker 1: in those locations actually have just focused on expanding current
Speaker 1: So for example, n d G advantages seventy megal what
Speaker 1: data center in the UK recently and now plans to
Speaker 1: double this current capacity. If you really want to encourage
Speaker 1: DASA to be more flexible, I mean a lot of
Speaker 1: things that can happen within power markets themselves to improve
Speaker 1: the signals for flexibility, which it basically improves the economic case,
Speaker 1: like them money you can earn by being flexible, Because
Speaker 1: to be honest, if you can be flexible and earn
Speaker 1: loads of money out of it, I mean companies are
Speaker 1: going to go for that their businesses. But as well
Speaker 1: as that kind of the economics is also the environmental side.
Speaker 1: So like if we can send those singles through to
Speaker 1: the companies and through to the end users, ultimately that
Speaker 1: if you actually, if you act more flexible or if
Speaker 1: you behave more flexible in your datas that your use,
Speaker 1: we can reduce overall emissions on the grid. I think
Speaker 1: the most important thing and actually going to drive all
Speaker 1: of this is we need to just more learning. Like
Speaker 1: it's really it's really new. This is all quite new
Speaker 1: to everyone. There's a few ongoing at the moment and
Speaker 1: more on the way, but a lot of work to
Speaker 1: be done. We're probably fine to ten years before we
Speaker 1: start to see some really big movements in data centers
Speaker 1: operations in their great responsiveness headed into this. I reference
Speaker 1: at the beginning the fact that when I think of
Speaker 1: data centers, I actually think of currency mining, the electronic currencies,
Speaker 1: And I think, Michael, you had an anecdote that maybe
Speaker 1: at least one of the currencies out there is looking
Speaker 1: at this space closely as well. Sure, so yeah, Actually,
Speaker 1: only a couple of weeks ago, a bitcoin mine and
Speaker 1: the U in the US actually agreed to shift this load.
Speaker 1: And it's actually interest where Bitcoin actually might might work
Speaker 1: well for this is that it is somewhat free to
Speaker 1: shift its load, you know, like Google and Amazon kind
Speaker 1: of depends on how we as users are using their services.
Speaker 1: A bitcoin miners complete control over how it uses its
Speaker 1: data center. So if it is willing and happy to
Speaker 1: shift that load to win wind is higher on the grade,
Speaker 1: to in solar is higher in the gride to win
Speaker 1: actually helps the flow of electricity across the grid, then
Speaker 1: it could actually be a good resource and breditionally more
Speaker 1: effective done some of these more traditional data centers that
Speaker 1: we've been talking about. So we'll watch the space develop.
Speaker 1: It's definitely one of the newer and more tech spaces
Speaker 1: that we look at the future of energy demand and
Speaker 1: in this case, specifically data centers. Michael Sarah, thank you
Speaker 1: very much for joining today. Thank you, thank you, Dinna.
Speaker 1: Today's episode of Switched On was edited by Rex Warner
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