Aging power plant fleet and data centers

Thomson Reuters made a nice visualisation on Europe’s aging nuclear reactors. Currently the EU operates 131 reactors with an average age of 30 years.

eu-nuclear-TR

It reminded me on a report I wrote in 2012 for Broadgroup about the power market and data centers in Europe. The quality and availability of the data center stands or falls with the quality and availability of the power supply to the data center. So the power market is something to watch closely.

Depending on the power technology that is being used, power plants have different life cycles. Coal-fired plants have a life cycle of about 40 years, gas-fired: 30 years, nuclear: 40 years, hydro: 80 years, and renewables are estimated on 25 years. Based on this life cycle estimates we can say that Europe has an ageing power plant fleet. A report of RWE states that for hard coal power plants more than 70% are in their half of their life cycle, for lignite and gas/oil more than 60% and more than 50% of the plants are in their half of their life cycle. For hard coal plants, based on the EU Large Combustion Plants Directive, 
replacement of all these plants is needed by 2030.

There is the expectation that the nuclear reactor lifetime is 40 years or more. The implication of a forty-year life expectancy is that in the next ten years (from 2012 onwards) forty nuclear power plants will be closed or 30% of the current nuclear power plant fleet. This would be a decommissioning of 30207 Mw net capacity, or 24.5% of the nuclear power capacity.

Given the fact that the average age of the 130 units that already have been closed worldwide is about 22 years, the projected operational lifetime of 40 year or more appears rather optimistic.

The decommissioning of nuclear power plants, has an impact on the carbon policies and targets and can create a shortage in power and a rise of the electricity price if proper counter measures are not taken.

Number of nuclear power plants EOL with a forty-year life expectation scenario (Broadgroup 2012)

Number of nuclear power plants EOL with a forty-year life expectation scenario (Broadgroup 2012)

A special case is Belgium. Two nuclear reactors were closed for a second time in march 2014 because of cracks in the steel reactor casings. The nuclear reactors Doel 3 and Tihange 2 in Belgium will be restarted earliest in the spring of 2015 and there is an increased chance that will be closed forever.

In august another nuclear reactor, Doel 4, has to be shut down after major damage to its turbine because of oil leakage. Electrabel said its Doel 4 nuclear reactor would stay offline at least until the end of this year, with the cause confirmed as sabotage.

As a result of this just over 3 GW of power is offline, more than half of the nuclear powerNuclear power plant Doel supply. Whereas nuclear power contributes about 50% of the electricity produced domestically.

So there is the possibility of blackouts this winter so Belgium will have to boost interconnection capacity with neighbouring countries to prevent power shortages.

According to the Minister of Energy Johan Vande Lanotte the last electricity consumption record was recorded on 17 January 2013, “On such a cold winter day, we consume about 14,000 megawatts. With the current production we come 1000 too short.”

Much depends on the weather, potential problems are to be expected from the end of october or early november according to Elia, Belgium’s electricity transmission system operator.

See Power market, power pricing and data centers in Europe. Broadgroup 2012, for more information about the electricity market and data centers in Europe.

Data centers, Emergency Power and Crowdsourcing

PowerDCGrid

Data Centers are helping to deliver emergency power to the power grid with the use of a crowdsourcing business model.

A very specific element of an electrical power grid is that there is no storage. Therefore demand and supply must be the same, in equilibrium, else there is the risk that this power grid shuts down. So in rare situations where the difference between production and demand (= load) is greater than desirable, and when the market for regulating and reserve capacity for power balancing fails there is a ‘power emergency’.

A large number of the high-voltage networks in Europe are linked together. The operators of these networks have agreed to maintain the balance between production and demand (consumption of electricity) in this interconnected grid. On the basis of these agreements the participants have to demonstrate their commitment by holding reserves in order to steer in situations where the grid is not sufficiently balanced.

The emergency power that is needed is obtained in the domestic market for regulating and reserve-capacity. In addition to this TenneT, a European electricity transmission system operator (TSO), also want to use the emergency power capacity of private parties such as Data Centers. Therefore TenneT started the NL Emergency Power Pool Ltd.

NL Emergency Power Pool is a joint venture of companies with an emergency power capacity of more than 500 kW. Its participants receive ample compensation for the occasional provision of generating capacity. The participants retains full access to their own backup provision. NL Emergency Power Pool claims that the one-of costs are earned back in one month and that the variable costs are reimbursed.

The pool contains various companies, particularly data centers but also hospitals, and water companies. Currently the total size is 40 MW and is still growing. TenneT demands for 20 MW capacity at least, with virtually full availability. Something which is usually only achievable with a resource pool.

NL Emergency Power Pool as a pool aggregator is the single point of contact for TenneT. The aggregator organizes everything, including the central control and metering. The control is fully automated. NL Emergency Power Pool will contract with TenneT less power than the sum of the individual capacities of the participants. In this way NL Emergency Power Pool can fulfill its obligations.

The pool helps TenneT in its statutory duty to ensure the reliability of the national power grid to guarantee. With the contracted emergency power TenneT can also support other national grids when they have problems. The company’s goal is an optimal result for the pool participants, within realistic economic preconditions. NL Emergency Power Pool operates independently and is based on a cooperation contract with TenneT.

By creating this pool of emergency power capacity Tennet is using a crowdsourcing business model. The sum of many individual, relatively small, emergency power systems creates a large virtual emergency power system that is serving the needs TenneT. The use of over-contracting makes this virtual resource pool more robust.

The participating Data Centers becoming power prosumers; producing consumers who besides consuming electricity also are creating electricity.

Connect the data center directly to the power grid

Are there with a diminishing PUE still opportunities to improve the energy efficiency of data centers? The answer is yes if you take a different look at energy efficiency.

At the DatacenterDynamics Amsterdam 2012 conference there was a (thought) provoking presentation of Siemens. According to the presenter of Siemens you must take the whole energy supply chain into account. That is starting with the power plant and then following the transmission and distribution grid until you finally reach the IT infrastructure in the data center. The energy efficiency of this energy supply chain is expressed in the Primary Energy Factor (PEF). The PEF is the ratio between the energy delivered at the end of the energy supply chain, the building, and the energy input at the beginning of the energy supply chain. An example. The average PEF in The Netherlands is 2.56. With a primary energy factor of 2.56 it takes 2.56 kWh of primary energy to deliver 1 kWh electrical energy.  So there is a considerable loss of energy in the energy supply chain.

Part of these losses are caused by the energy conversion in the power plant. The other losses, T&D losses, are caused by the Transmission and Distribution grid. In 2009 the average T&D losses for the European Union were 5.9%. The T&D losses for countries with Tier 1 data center markets were for the UK 7.1%, The Netherlands 3.8%, Germany 4.2% and for France 6.1%.

T&D Losses source World Bank and DataMarket

See also this link for T&D losses for other countries

The high-voltage grid in The Netherlands has an exceptional quality and reliability, much better then the medium and low voltage grids. So according to the presenter you could reduce energy losses by connecting the data center ‘directly’ to the high voltage grid and at the same time improve the reliability of the electrical energy supply. By connecting the data center ‘directly’ to the high voltage grid you reduce the number of components that are part of the internal electrical infrastructure of the data center. And by doing so, you improve the reliability of your electrical infrastructure. By making the proper connections you could even dispose the diesel generators that are used for back up.

It was shown that because of the exceptional high reliability of the high-voltage grid you could easily create an electrical infrastructure for a data center with a higher availability then a Tier IV data center as defined by the Uptime Institute.

Interesting and provoking thoughts given the fact what another speaker John Post, managing director of Green IT Amsterdam consortium, was telling. Amsterdam is with London, Frankfurt and Paris one of the four Tier 1 data center markets in Europe. According to him the agglomeration of Amsterdam has currently 36 commercial data centers with a CO2 emission of 720 kiloton CO2/year. That is around 15% of the total CO2 emission in the city. The expectation is that in 2015 it will be 930 kiloton/year or 20% of the total CO2 emission. Amsterdam want to reduce their carbon emission in 2025 with 40% compared with the year 1990. This will definitely have an impact on the data centers. Therefore according to John Post data center providers must seek collaboration with energy providers and think about new business models to solve this issue and at the same time being profitable.

See also the blog entries Following the data center energy track and Power markets, Power prices and Data Centres in Europe

Data centers and power grid transformation

Data centers, know your 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 supply to the data center. So data centers are very much depending on the quality and capacity of the power grid, for their daily operations as well for their growth potential.

With a scenario of moderate energy efficiency efforts the energy consumption of EU data centers in 2015 is roughly estimated on 105 TWh coming from a 40 TWh in 2006.

At the same time the European Union is transforming its power grid. That is because the European Union defined some ambitious energy targets for 2020 that aims at:

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

The EU 20-20-20 goals makes it necessary to update the current power grid and to use a larger percentage of renewable energy. On top of this, the EU has an aging power plant fleet. For the carbon based power plants around 60% are in their second half of their life cycle. And in the next ten years decommissioning of 24% of the EU nuclear power, can be expected. (see this blog entry )

Also several ‘incidents’ at nuclear power plants (Japan, France, Belgium) caused a shift in energy policies of several EU countries and has sent shock waves through the energy industry. Germany’s government announced in 2011 that it would phase out all nuclear power plants by 2022. Recently the government in France reaffirmed to cut reliance on nuclear energy from more than 75 percent to 50 percent by shutting 24 reactors by 2025 (see this article).

Until recently experts were expecting that the usage of variable renewable energy sources would require complex control, coordination and power-balancing mechanisms. Instead of a small number of large power plants in the old power grid, the new power grid will link a larger number of small, decentralized power plants with the consumers. In other words power lines will no longer form star-like networks and linking a few large power plants to nearby consumers, but will look more like a meshed network linking many generators with the consumers. There is a fear that such a dense power grid, with intermittent energy sources, would be vulnerable to power outages because it is much harder to synchronize the many generators and machines of consumers.

A good example of this discussion are the recent power grid developments in Germany.

Renewable energy may stabilise the power grid

In contrast of this, scientists at the Max Planck Institute for Dynamics and Self-Organization in Göttingen have now discovered in model simulations that whereas more decentralized grids become more robust to topological failures they simultaneously become more sensitive to dynamical perturbations.

The simulations indicate that decentralized grids are much more robust when single lines are cut (such as the 2006 power outage around Europe, caused by the shutting down of a single line in Northern Germany). A dense grid can compensate more easily, take the extra load, for a line outage.

The transformation of the current power grid raise the question of where to add new connection lines to the already existing grid. The computer model showed that adding new links may not only promote but also destroy synchrony. Adding new lines can hinder power transmission. This counter-intuitive phenomenon is known as Braess’s paradox. It shows that careful consideration should be given to which nodes can be linked without risk.

The expansion of renewable energy still holds challenges for the stability of the grid. The simulation model showed that a highly decentralized grid is more vulnerable to strong fluctuations in consumption. Large power plants can buffer these fluctuations in demand more easily than small ones, The grid can tap into these spinning reserves at short notice to cover supply gaps, an option which is not available in the case of renewable energy sources.

The Network Dynamics Group based in Göttingen currently starts collaborating with network operators to ensure that their findings can be put to practical use. In the meantime, the research group is improving the model. Their current focus is to integrate weather-related fluctuations in renewable energy sources into their simulations.

Another vulnerable power grid

Another power grid in the news. After Japan, India and Texas we have Belgium.

Tihange nuclear power plant

Belgium’s nuclear regulator has questioned the safety of the Electrabel-operated Doel 3 reactor, located 25 kilometres (20 miles) north of Antwerp, due to cracks in the pressure vessels. Hence the decision to close the Doel 3 reactor and also a second reactor in the country’s south near Liege, Tihange 2.

June and July tests had suggested there could be “thousands” of possible fissures inside the protective vessel holding the Doel 3 reactor, and that these probably dated back to its construction decades ago. The Dutch firm behind that job is long since out of business, and repairs have been described as practically impossible.

Belgium’s nuclear regulator, said that Electrabel,  would have to show that in a period of the remaining lifetime there is no risk at all that cracks can go on to produce leaks. The regulator agency said it would be difficult to prove the Doel 3 site is watertight safe, suggesting its permanent closure was all but certain.

Earlier, the European Commission has initiated a series of voluntary stress tests as part of efforts to ensure safety following Japan’s Fukushima nuclear disaster. They were meant to be completed before the Commission’s August summer break, but governments have been given extra time for further assessments. The EU Energy Commissioner said he expected the stress tests to be completed in October and that they would include the assessment from regulators about risks associated with the possible cracks in the Belgian unit.

Belgium is very much depending on nuclear energy. It is one of the three nuclear champions in the EU by using more than 50% nuclear energy as load for their electricity production. Belgium has seven nuclear reactors at two plants (Doel and Tihange) with a total capacity of 5927 MW. With the shutdown of the two reactors the total nuclear production capacity is diminished with 34% or 2014 MW.
The federal energy regulator Creg confirms that if nuclear reactors Doel 3 and Tihange 2 effectively remain closed and it is a cold winter, there is a risk of blackouts!

The option to electricity imports could offer some relief, but is generally limited. An alternative is the reopening of conventional power plants that are now inactive, the coal power plant of Ruien and the gas power plant of Drogenbos. But together they only have a capacity of about 1000MW.

An early closure of the two nuclear power reactors will definitely lead to capacity problems and will certainly influence the electricity price.

Data centers and the vulnerable Texas 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 supply to the data center. But in Texas, a state with data centers of several notable IT companies, including WordPress.Com, Cisco, Rackspace and Host Gator, the power grid is on the edge of collapse.

Just like last year, the Texas power grid has struggled to keep up with demand during sweltering summer days (see Texas escaped rolling blackouts: Data centers and the power grid interdependency)

For Texas, it has been said that demand is growing faster than new power supplies and at the same time the wholesale power pricing environment doesn’t support expansion. The peak price for wholesale electricity is state-regulated. And although the Texas Public Utility Commission approved raising the cap on the peak-demand price from $3,000 per megawatt hour to $4,500/MWh starting August 1 this gives little incentive to build new power plants (see Not enough even higher price for electricity urged for Texas).

New power plants are very much-needed. Texas has a goal of having about 13 percent more power available than consumers need (also known as the “reserve margin”). By setting a proper reserve margin you can reduce the chance of a strained grid that will lead to blackouts. Besides the fact that Texas is the only state that isn’t meeting reserve margin goals, the reserve margin is also shrinking. The forecast is that by 2014 the reserve margin could be below 10 percent and in 2015 below 7 percent.

USA reserve margins source: EIA

The current power grid issues in Texas are an example that as a customer of cloud computing and/or data center services but also a data center provider you must have a good understanding of the power grid to appreciate the risks that are at stake in terms of resiliency and business continuity.

European Union Carbon price and data centers

Carbon based energy can lead to considerable extra costs for a data center in the European Union. Since 2005 the carbon price in the EU has moved between the 32.85 and 5.99 euro a ton. Currently there is much uncertainty about the future of the carbon price in the EU.

To enforce the right actions to combat climate change the EU has chosen for ‘cap and trade’. With this market-based approach to control pollution there is a limit (cap) on the total amount of gases that can be emitted by companies in the system. Within this cap, companies receive emission allowances, which they can sell to or buy from one another as needed.

The European Union Emission Trading Scheme (or EU ETS) is the largest multi-national, greenhouse gas emissions trading scheme in the world. In 2005, the European Union started the EU Emission Trading System (EU ETS) and now it covers nearly 50% of all European Union CO2 emissions.

The lower limit for the EU ETS is set at 20MWthermal, but many data centers have their own back-up fossil fuel power supply. For the bigger data centers these direct CO2 emitters are large enough to be included in the EU ETS in their own right.

Under the scheme, all installations regardless of whether they are used on a continuous basis or for standby are obliged to be registered and permitted. For the major part of carbon emissions associated with data centers comes from their direct electricity usage. Only the intermittent emissions from their own on-site, fossil fuelled generators are covered by the EU ETS.

Since the start in 2005, the EU carbon market has experienced a large degree of volatility. One of the reasons is that “The EU ETS has a growing surplus of allowances built up over the last few years,” as said by Connie Hedegaard, EU commissioner for Climate Action. The recent economic downturn has added to that and pushed prices to record lows, raising questions about the effectiveness of the program.

With a EU Allowance top price of 32.85 euro, and a price of just below 17 euro in 2011 there was an all-time low of 5.99 euro in the beginning of April 2012. They allowances are currently trading at around €7.00

To remedy the problem at least temporarily, the European Commission put forward a proposal on July 25: to cut the number of permits auctioned between 2013 and 2015 and sell them later. An action known as backloading. There are no firm proposals in the plans on how many allowances should be withdrawn from sale, but the commission’s own analysis mentions 400 million, 900 million or 1.2 billion of them.

It seems that there are still discussions ongoing; about the issue that changing the auctioning schedule could hurt companies, already under strain due to the economic crisis or the impact on countries with an carbon based energy production (such as Poland).

The disagreement has meant that the commission will now only publish specific figures as well as long term structural changes to the ETS system after the summer recess.

Data Center stakeholders should closely watch the current carbon price developments. More information on data centers and carbon and power prices can be found in the report Power market, power prices and data centres in Europe.

[UPDATE

Getting some remarks that data centers fall outside the ETS scheme.

So let me clarify.

A lot of people are not aware  that for the bigger data centers the backup power generators are large enough to be included in the EU ETS in their own right.  With this I didnt stated that this generators are currently part of the EU ETS. But there is a chance that it will be a part of EU ET because things are not very clear. A quote from The Green Grid on this, in whitepaper #25:

“There is some discussion on whether the standby generators would qualify a Data Centre for inclusion in the scheme. Currently guidance on this is unclear would and operators should determine if their standby generators would mean inclusion into the scheme. Data Centres with generator capacity of >6MW may be seen as 20MW (Thermal) potential power generation capacity using fossil fuels.”

]