Energy risk: How data is eating up all the energy
Any failure in energy supplies to data servers can result in severe consequences
By Isaac Kato, CFO of Verne Global | CFO UK | Published 16:18, 18 March 14
There is growing recognition that businesses face significant and increasing energy risk due to the huge pressures on energy suppliers and distributors around the world.
This problem is particularly acute where local power generation is reliant on coal or gas from unreliable sources, where nuclear plants are being decommissioned, or where governments are investing heavily in renewables and passing the costs onto businesses.
The issue for business is that all-in energy costs are for the most part high and rising, even in depressed economies. This is especially true in Europe, where electricity prices have steadily and relentlessly risen over the past several years.
The risks associated with rampant energy price inflation are particularly high for knowledge-oriented businesses that are critically reliant on power intensive IT and data centres. As more businesses use contemporary technologies like cloud services and big data to drive efficiency and better decision making, the demand for data centre has soared.
By unlocking business intelligence from growing troves of data held by companies, big data projects often promise to have a positive and substantial impact on a company’s profitability. Indeed, there have already been some notable success stories.
For example, Avis Budget has reported an impressive return on investment from one of its big data projects. By analysing the data amassed on its 40 million customers and their behaviours, the company increased its revenue by $200 million (£120.7m), according to Avis.
To provide a sense of scale of the amount of data being generated and stored to support big data, every two days we create the same amount of information as we did from the very beginning of time up until to 2003.
Married to this explosion in data creation are ever more powerful analytical techniques and algorithms, so it is of little surprise that forward thinking businesses are embracing big data technologies to improve their financial results and compete more successfully.
Russian threats to gas supplies
Yet, many companies pay inadequate attention to the rising electricity cost associated with powering big data platforms. Alternately, they feel resigned to simply accept it as an inevitable cost of doing business.
Despite advances in technology, the servers which store and process big data still consume vast quantities of power. If housed in traditional European data centres, which primarily draw electricity from high priced, fossil fuel powered grids, the cost of running these initiatives can come as a big surprise.
Of equal concern, any failure in the delivery of energy supplies to the data servers can force these vital applications offline, with severe consequences for everyday business operations. Ofgem, Britain’s energy regulator, recently forecast that the spare margin – the amount of energy available for consumption at times of peak demand – will fall to as low as 2 percent in 2015, increasing the risk of blackouts, and this problem isn’t unique to the UK.
Europe is trapped between a rock and a hard place as it attempts to simultaneously secure adequate power supply, increase the renewables mix, and avoid shocks to the system such as nuclear plant shutdowns and threats to gas supplies from Russia.
That said, each project is different, and the cost elements will vary accordingly. While this makes it difficult to accurately pinpoint the cost of powering the IT equipment, reasonable estimates put this figure at approximately 15 percent of the total cost for most data infrastructure systems.
For some deployments this figure is much higher. For example, NASA predicts that its ‘Discover’ super computer system, used to model and simulate the Earth’s climate, could consume enough power to fuel 16,000 homes.
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