Rien Dijkstra Data Centres Europe 2012

Power markets, Power prices & data centersBroadGroup

One is big and untamed the other is just an elephant

20-20-20

The European Union defined some very tangible targets for 2020 that aims at:

20% reduction of energy usage,

20% share renewable energy and a

20% reduction on greenhouse gas emission

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

Rising energy demands

Background of EU policy:

The International Energy Agency (IEA) is expecting that the global energy demand increase by one-third from 2010 to 2035,

With China and India accounting for 50% of the growth.

Fossil fuels are running out in the long term

Resilience to a changing climate demands for decarburization of the energy sources we are using to ensure sustainability.

This calls for stronger mechanisms to secure energy by new, diversified, and safe supply routes and sources.

Rising power demands Worldwide growth from 1973

onwards more than 200%

In last decade the electricity consumption in the EU has grown with 12%

The electricity consumption is driven by three trends:

✤ ‘electrification of everything’

✤ ‘digitization of everything’

✤ ‘anytime anyplace connected’

1. Electricity is still mostly generated with carbon energy resources.

2. Currently in the EU:

1. Carbon 56%, Hydro 14%, Nuclear 14%, Renewable 16%

Rising DC power demands The economic slowdown has a great

influence on the trend in energy consumption of data centers

Instead of doubling, the energy consumption growth increased by around 50%

Mainly because of the growth in servers slowed considerably during this period.

But the worldwide energy use of network equipment is still rising very rapidly.

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

Price drivers

Power Pricing

On average the electricity price for industrial consumers in the EU increased with more than 5% in four years time

In 2011 Bulgaria, Estonia and Finland were the cheapest countries.

Malta, Cyprus and Italy where the most expensive countries.

Tier 1 data center markets: France 5th, UK 8th, the

Netherlands 16th, Germany 22nd place

The tax rates on electricity for the different EU countries differ considerable.

Country and specific details can be found in the report

Supply chain

In the data center two critical infrastructures, the IT infrastructure and the electricity infrastructure are tied together. Because of this interdependency, inefficiency in the IT infrastructure has consequences for the energy infrastructure and vice versa.

The current power grid infrastructure is not flexible and has low energy efficiency.

The current “IT grid” infrastructure has low energy efficiency and poor energy elasticity

Transformation

Europe has an aging power plant fleet: For the carbon based power plants

around 60% are in their second half of their life cycle

In the next ten years decommissioning of 24% of the EU nuclear power, can be expected

The EU is still facing cross-border power grid integration issues.

The introduction of variable renewable-energy supply will require complex control and coordination, power-balancing, mechanisms.

Although suitable for the last century, the current grid cannot handle the new demands and this has to change.

Look into the future ...

No crystal bowl. No stargazing but: The EU 20-20-20 goals, The intermittent nature of the

renewable energy sources, The aging power plant fleet and

aging power grid

makes it necessary to update the current power grid to a new and smart power grid.

The power and utility sector will require a substantial amount of investment during the next 15 years to make this transformation possible.

These developments will put pressure on the electricity price.

Rien Dijkstra Data Centres Europe 2012

Power markets, Power prices & Data centersBroadGroup

Report availabe athttp://www.broad-group.com/report