Coupled with the rapid growth of data centers we rely upon for internet service and information storage is an increased demand for electricity to power millions of computers and cool the mammoth buildings in which they operate.
Data center computers are integral to our everyday life and store everything from cooking recipes to complex engineering blueprints. They are heavy power users consuming 10 to 50 times the energy per floor space of a typical commercial office.
Energy inflation combined with the closure of nuclear, coal and natural gas power plants is causing a shift from more reliable electricity production to interruptible generation which depends more on sunshine and wind. Not only do we have to make up for loss of generating capacity but the skyrocketing demand for electricity.
Worldwide there are 8,000 data centers which consume 3% of global electricity. Today, it is more than 90 billion kilowatt-hours (kWh) annually — the equivalent output of roughly 34 coal-powered power plants.
Data center electricity demands are straining the power grid just as utilities ramp up for an avalanche of electric vehicles and replacing natural gas with electric water heaters and kitchen stoves in residential and commercial structures.
The competition for electricity will only increase. The global data center market was estimated at $220 billion in 2021. It is expected to top $343.6 billion in 2030, according to P&S Intelligence.
The U.S. has over 2,700 centers which is more than the combined total of Germany, England, China, Canada, Australia, Netherlands, Japan and France. In the Pacific Northwest (Washington, Oregon and Idaho) there are roughly 100.
“Electricity-hungry data centers are seeing huge growth in usage, leading to pressure from European officials to funnel the excess heat generated by their computer chips into municipal heating networks,” according to Wall Street Journal writer Sam Schechner.
To spur this conversion, national and local governments from France to Denmark have introduced tax incentives and some make recapturing waste heat a requirement for some new building permits
Closed heating systems, called “district heating,” are popular in northern Europe. Rather than venting low pressure steam, it is piped into neighboring buildings and homes. The problem is data centers’ temperatures are too low and need heat pumps to boost temperatures.
Data centers in proximity to district heating systems could provide as much as roughly 50 terawatt-hours a year of excess heat, according to a study from ReUseHeat, an EU-funded project aimed at promoting waste-heat reuse.
Meta Platforms Inc. has been recovering excess heat from its data center in Odense, Denmark, since 2020. The Facebook parent company is currently expanding that base, with plans to provide enough excess heat to warm about 11,000 homes, WSJ reported.
According to Schechner in the past year, Amazon.com Inc., Apple Inc., and Microsoft Corp. have started connecting or announced plans to connect major data centers to district heating systems in Ireland, Denmark and Finland.
High electric rates and Russia’s curtailment of natural gas supplies triggered Europeans to accelerate ways to cut energy costs. By comparison, Germans pay 33.5 cents per kilowatt hour for electricity while our national average is 11.1 cents. (Washington has the seventh lowest rate of 8.75 cents.)
Even though our electricity is cheaper, we need to look closely at the transformation occurring at Europe’s data centers. While Washington is well positioned for growth, costs for power are increasing and we are already stretching our electricity grid.
“All of a sudden, the business case for a heat network fueled by residual heat is much more interesting than a couple of years ago,” Stijn Grove, the Dutch Data Center Association’s managing director told WSJ.
That may be the case in our state as well.
Don C. Brunell is a business analyst, writer, and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.
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