Data centers beware of the Power Grid

As we all know the quality and availability of the data center stands or falls with the quality and availability of the power delivered by the power grid to the data center. But the current power grid is under pressure. Although suitable for the last century, the current power grid cannot handle the new demands.

The EU has developed an ambitious energy policy scheme, also known as ‘20-20-20’, that aims at:

  • 20% reduction of energy usage,
  • 20% share renewable energy and a
  • 20% reduction on greenhouse gas emission in 2020

This is the political and legislative framework that shapes the electricity market in Europe.

The EU 20-20-20 goals in combination with the intermittent nature of the renewable energy sources, and the aging power plant fleet and power grid of the EU makes it necessary to update the current power grid to a new and smart power grid. Therefore the power and utility sector will require a substantial amount of investment during the next 15 years to make this transformation possible.

A good example of this are the recent developments in Germany. Following the accident in Fukushima, Germany’s government announced in 2011 that it would phase out all nuclear power plants by 2022. That is about 23% of their power production capacity. At the same time, in 2011, there where periods that the German windmills generated so much power that power generators were paying consumers to buy their electricity for a short time otherwise they had to shut off base load power plants. This phenomenon is known as ‘negative electricity prices’. In 2012 the German solar power plants even produced a world record with 22 gigawatts of electricity per hour, this met with nearly 50 percent of the nation’s electricity needs. This flood of renewable energy influence the profitability of the traditional power plants and also put pressure on the necessary investments in the adaption and replacement of an aging conventional power plant fleet.

Several stakeholders of the power supply chain; power plant owners, transmission system operators and large customers (enterprises) have expressed their worries about recent developments and the increasing risk of unstable power supply.

Recently the four German transmission system operators (TSOs) 50Hertz, Amprion, TenneT TSO,  and TransnetBW  published for the first time a report about the transformation of the current power grid to a new smart power grid. Using different development scenarios this plan, NEP 2012, points to the new needs for electricity transmission between the start and end points in the power grid. The current draft of the network development plan, NEP 2012, is open for public consultation until 10 July 2012.

According to this report the most important factors that shape the future energy infrastructure are:

1) Consumers distance: wind will continue to be the most important energy sources, renewables. Most of the local wind energy is produced by many wind turbines on land and at sea in the north. Large amounts of energy must be transported from there to the present and future consumption centers in central and southern Germany. The current electricity grids are not designed  for the transmission of large amounts of electricity over such long distances along the north-south axis.

2) Decentralization and diversity: Creating Strong, centralized systems (which include wind farms and large solar systems are), are complemented by a large number and variety of different small and medium-energy producers in Germany. These include, for example, solar energy systems, biogas plants on farms, the turbines on the plains and hills, and many more, including new and innovative energy sources.

3) Volatility: Unlike fossil and nuclear energy sources that allow a steady flow of energy and transport into the power grid, the electricity generation by alternative energy sources depends on the weather and so they are sometimes extremely volatile. The volatility of energy is constantly increasing and will likely continue to be the rule rather than exception. Striking a balance between production and consumption and thus maintain the network stability in the future, the number of producers, consumers, and storage must be actively and intelligently integrated in the network operation.

The TSOs want to pursue these new technology developments and integrate them into any new NEP. According to them the energy landscape of tomorrow will be more diverse and interconnected,  and it presents completely different demands to power grids. The TSOs stating that the German power grid is considered one of the safest and most reliable worldwide. But presently the growing integration of renewable sources of energy and the increase in the fluctuating supply brings the networks to their capacity limits. This gives the risk of  network collapse or the shutdown of renewable energy.

The network expansion in Germany currently lags behind the expansion and usage of renewable energy sources. New energy sources will need new networks. The TSOs are emphasizing that the modernization and the need for adequate expansion of German power grids are a first step and prerequisite for the success of the energy transition, and thus key to the entering of the new era of renewable energy. Much work must be done so that the grids do not remain the oft-mentioned bottleneck of energy transition.

The core of the new transmission network are four DC-transmission corridors with a route length of approximately 2.100km and a transmission capacity in the North-South direction provided by 10 GW. The new building-lines for the AC power is about 1.700km. The estimated investment costs in the German transmission grid by 2022, depending of the chosen development scenario, vary  between the 19 and 23 billion euro.

Data Center stakeholders should closely watch the current Power Grid developments in Europe. If you are interested in this topic, have a look at the presentation on Power markets, Power prices and Data Centres in Europe given at Datacentres 2012 conference in Nice. Or read more about this in the report published by Broadgroup. And if you can read German you can find the NEP 2012 report here.

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