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THE ENERGY CRUNCH: Critics fault high-tech for being power hungry

The New Economy, is taking up huge electric resources, Barrie McKenna says


Published Feb. 15, 2001


From the street, Digital Island's data centre looks like hundreds of other office buildings in Silicon Valley. Leafy trees, green lawns and neat rows of parked cars surround the plain, low, brick structure.

It's a different story inside. Six layers of security protect banks of Internet servers and routers belonging to companies such as E*Trade Group Inc. and MasterCard International Inc. An armed security guard stands in front of an imposing floor-to-ceiling man-trap gate, monitored around the clock by video cameras. On the second floor, a false office-front conceals climate-controlled vaults with racks of computers and miles of fibre-optic wires that power the Internet.

"You can't stop what the Internet has brought to the world," says Lori De Matteis, director of global hosting services for Digital Island Inc., a San Francisco-based Web hosting company.

"We have to make sure it continues running."

The 78,000-square-foot building is connected to two separate power grids. The $60-million (U.S.) centre has its own backup generators, uninterruptible battery units and a massive diesel reservoir buried under its parking lot, capable of keeping the servers humming 24 hours a day for nearly a week.

"We've got the power," Ms. De Matteis said confidently.

Without safe, dependable power, Silicon Valley - and the entire high-tech economy - would collapse. A power outage spells dot-com Armageddon.

"The New Economy, it turns out, still requires the lifeblood of the Old Economy," noted Clyde Prestowitz, president of the Economic Strategy Institute in Washington.

California's power crisis and the continuing threat of blackouts has exposed a dirty little secret about the digital economy. It's become a major energy guzzler.

Forget the conventional wisdom that a knowledge-based, wireless economy needs less power. Sure, laptop computers, cellphones and other tiny handheld devices are getting increasingly stingy about the power they consume. But that doesn't apply to the big servers that support the data and voice traffic those devices generate.

The guts, or backbone, of the Internet is increasingly electricity-intensive. And until recently, engineers didn't even think to make them more energy-efficient.

Power-hungry "server farms," such as the ones operated by Digital Island, are springing up in cities around the globe. One server farm consumes 10 to 60 megawatts of power. That's enough to power a steel mill or a semiconductor plant. The largest server farms draw as much 100 megawatts of power, equal to what a city of 100,000 people needs.

Galloping demand from companies such as Digital Island, and other companies that didn't exist just a few years ago, has strained the ability of energy planners to predict where and when power will be needed next.

Energy demand in Silicon Valley grew by as much as 12 per cent last year, compared with less than 3 per cent for all of California. Demand across the state has also outstripped the national average, led by California's booming technology-based economy and an influx of new workers.

Energy experts said the New Economy's power consumption needs are more mobile and less predictable than the Old Economy's. Server farms are springing up everywhere - in abandoned warehouses, office buildings and even in the back of tractor-trailers.

A low-end server farm can be erected in as little as 60 days, instantly drawing 60 megawatts of power. And it might just as easily disappear in a few years, noted William Smith, manager of load management at the Electric Power Research Institute, an industry-funded think tank in Palo Alto, Calif.

"This kind of mobile load was unheard of a few years ago," said Mr. Smith, a former executive of Pacific Gas & Electric Co. "It's a challenge for the utilities. . . . It started in 1999, and no one knew it was going to happen."

Now there are questions whether the electricity infrastructure is geared to the demands of the high-tech industry - not just in California, but throughout North America everywhere. Most of the large power plants and transmission lines were built with 20th-century technology, based on 19th-century models. They weren't thinking about server farms and Palm Pilots.

In Silicon Valley, high-tech executives are so worried about California's ability to deliver power now, and in the future, that some are looking at shifting production and operations to where there is abundant cheap power.

California's problems have created excitement in places such as British Columbia, which has laid out the welcome mat to high-tech companies looking for abundant power and a West Coast ambience.

In California, not a single new power plant has been built in a decade.

The state - once a net exporter of electricity - has become a drain on surrounding states, which are also growing rapidly. And its transmission grid, built when Southern California's defence industry was the prime engine of growth, has left Northern California and its high-tech industry unable to tap the dwindling supply, even on the days it's available.

In the five years since California deregulated its electricity market, the state's economy has grown 32 per cent. Electricity demand has grown 24 per cent, or 6,000 megawatts, to nearly 50,000 megawatts, without a single megawatt of new in-state capacity.

Particularly galling to many, some of California's high-tech stars - including San Jose-based Cisco Systems Inc., which makes much of the equipment installed in server farms - have opposed new power plants on environmental grounds.

"Calpine Corp. was willing and anxious to spend millions to build one of the newest and cleanest power plants in the world," Kit Konolige, a power industry analyst at brokerage Morgan Stanley Dean Witter in New York, recently told a U.S. Congressional committee. "And Cisco and the City of San Jose fought tooth and nail to oppose this plant, even though Silicon Valley is most subject of all areas of California to blackouts."

Just how much power the high-tech sector consumes has become the subject of heated debate. Experts say the high-tech industry accounts for anywhere from 3 to 8 per cent of demand across Canada and the United States.

One study, by Mark Mills and Peter Huber of the Digital Power Report, even suggested that a Palm Pilot connected to the Web eats up more power than a refrigerator. Based on that analysis, the researchers concluded that Internet-related use would account for up to half of electricity demand within two decades.

But other experts have challenged the study, and Mr. Mills and Mr. Huber have been unable to substantiate their findings.

There's no doubt the high-tech industry is a big power user, but it doesn't account for anywhere near 8 per cent of demand, insisted Jonathan Koomey, a scientist at the Lawrence Berkley National Laboratory outside Oakland, Calif., who has reviewed their findings.

Mr. Koomey said a PC linked to the Web consumes just 50 to 200 watts, including all the back-end Net equipment, or roughly the same as two household light bulbs. That compares with an estimate of 1,000 watts by Mr. Mills and Mr. Huber.

"The high-tech industry is way down the list of reasons for this crisis," Mr. Koomey said.

"The people who want to build power plants would like everyone to think that there is huge demand growth so we can reduce environmental regulations. I think that we have to build power plants, but I also think that people are trying to create a sense of urgency to make it easier for them to argue for their interests."

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