Where are companies building power-hungry datacenters to take advantage of cheap power?

March 5, 2009 1:59 PM

Is there a list of datacenter projects that have been built from a green-field state to take advantage of a guaranteed low per kilowatt-hour electrical rate? In particular I'm thinking of the big Google facility near The Dalles, Oregon and the Microsoft datacenter in a small eastern Washington town. Both were built in areas with excess capacity originally intended to serve large Aluminum smelters.

Second, does anyone have reliable information on the bulk rates that have been locked in by companies? Such as, N cents per kWH for Y years rising to Z c/kWH after a certain period of time.

I started thinking about this after reading an article about Iceland's current woes. The economists mention that aside from fish, one of the biggest industries is an Aluminum smelter, built there specifically to take advantage of the low electrical prices. I realize that Iceland is not the best location to build anything large telecom wise (as far as I know it has only one or two transatlantic submarine fiber optic cables, neither of which are extremely high capacity or optimal latency-wise compared to the more direct London-NYC routes). I'm wondering what other areas of the world have ridiculously low per kWH rates for large scale industrial customers.

posted by thewalrus to technology (5 comments total)

Iceland is a bit too far away from the west coast NSA listening center. Which. Um. Is just down the highway from the facilities you mention ;)
posted by mmdei at 3:44 PM on March 5 [1 favorite]

The "excess capacity" described for the aluminum smelters in Washington doesn't have as much to do with the price of electricity as the infrastructure to deliver it. Consumers generally pay exactly the same rates for power regardless of where they are located within a given utility company's territory. The question is whether the utility company can actually deliver sufficient power to a particular point without significantly upgrading their delivery network, the costs of which are usually passed on to the end user. So by finding areas with a lot of idle wires, companies looking to build data centers can save on their infrastructure costs. As extending power grids can easily cost six to seven figures--you've got to work out easements and rights-of-way for the land you need in addition to the actual equipment--recovering that cost through cheaper prices per kWh sounds like it could take a very long time.

As to your second question, as far as I can tell the answer is "No."

The reason for this is that such information is highly proprietary. Companies like Google have absolutely no incentive to tell you how much they're spending for electricity, and utility companies have even less of one.

But even if they did report such things, I'm not sure how much good it would do anyone. Lots of times municipal and state governments actually use utility discounts as an incentive to attract businesses to their jurisdictions or to keep them there if they're talking about leaving. New York City has cut such deals with several major financial firms who threatened to relocate to either Connecticut or Pennsylvania. So a cheap rate might reflect incentives like this rather than anything related to utilities as such.

Furthermore, energy rates fluctuate so rapidly these days that what may look like a ridiculously low/high rate may simply reflect a contract signed x months/years ago when prices were different.
posted by valkyryn at 3:47 PM on March 5

I'd post links for these, but I'm on my iPhone:

James Hamilton, formerly of Microsoft, now at Amazon, has posted lot of great stuff about datacenter costs on his blog.

Also, I think Datacenter Knowledge tracks news of big datacenter projects
posted by Good Brain at 12:20 AM on March 6

I've actually been to the "small town in Eastern Washington" where the Microsoft data center is located. It's a small farming town in the middle of nowhere (Quincy, WA - 3 hours east of Seattle, 3 hours west of Spokane), not too much more than an intersection with a few stores and a gas station. The big employer in town is the potato processing plant. Strangely, there's not only the Microsoft data center there (which I think is 20MegaWatt), but there's also a Google (30MW) and an Intuit (40MW) data center. The Intuit one is going to be expanded to 80MW soon.
posted by skwm at 5:13 AM on March 6

Google recently built a datacenter in Lenoir, North Carolina. Part of the incentive was the cheap and reliable power grid in the area, which was originally built to support the furniture industry, of which Catawba County (specifically Hickory) is/was a major center. Article here, which mentions power costs as a major factor (4.5-5 cents/kWh).
posted by Who_Am_I at 6:12 AM on March 6