Data Centres Vs Steel Plants - A Comparison

SUMMARY

•  Steel plants use 60% of the energy demand of a data centre but provide 26 times as many jobs

• Port Talbot steel plant in Wales provides 28.5 jobs for every megawatt of demand compared to 1.5 at the data centre at Athenry 

• Approval for planning permission of any industrial project should require a high jobs to energy demand ratio of at least say six or seven. 


Last week, Apple received approval for their data centre in Athenry, County Galway to great fanfare in the media. I can only find one article (in the Independent) which dealt with facts (Revealed: Data centres to swallow 75pc of growth in Irish power demand). The article gives a good overview of the problems that lie ahead. 

I am not in favor of opposing something for the sake of opposing it. I'm in favor of discussing all the available facts and basing decisions on those. What we have now in Ireland is approving something for the sake of approving it which is just as bad as the other extreme.  I fail to understand how a country which prides itself on it's higher education credentials does not discuss the facts in relation to new projects such as data centres. 

David Hughes wrote previously on the Athenry data centre (The Cloud Bytes Back) :

To give an example Apple are seeking permission for a 240MW data centre in Athenry Co. Galway, which will create up to 215 jobs. The electricity consumption of this data centre will be the same as 420,000 Irish homes. This is ¼ of all Irish homes or every single house in Dublin City, Dun Laoghaire, Fingal and South County Dublin combined. Basically, the electricity needs of 1 Million people.

It seems the jobs figure has been revised downwards to 150 full time jobs according to the above Independent article.  So that's about 1.5 jobs for every megawatt of demand.  

Let's compare that to another high energy industrial user - steel plants in the UK. Port Talbot steel plant in Wales was due to shut down in the near future but the employees fought hard and the plant remains open for the time being. It employs nearly 4,000 people.

Port Talbot steelworks’ current demand for energy is about 140 Megawatts (MW), about half of which is internally generated. That works out at 28.5 jobs for every megawatt of demand.

A steel plant therefore generates about eighteen times more jobs per megawatt of demand than a data centre. Even if those jobs were cut in half by new technology, steel would still provide more jobs by a factor of nine.

Based on figures for Port Talbot then, steel plants use 60% of the energy demand of a data centre but provide 26 times as many jobs

The Government is keen to promote Ireland as being a location where it can meet the needs of the IT sector by providing certainty around planning and power supply

Interestingly, the government is not trying to promote Ireland as a location for steel plants which would create many times more jobs. 

The impact on energy demand, fossil fuel imports, emissions, electricity prices and 2020 targets will be enormous from data centres. As a consequence, it will be harder to attract other high energy industrial users that could provide many more jobs.  There needs to be a good payback for Ireland Inc. to compensate. Of course, they need to built somewhere to provide the demand for internet services.  But Ireland should not allow so many to be built here. We simply cannot afford it. 

Approval for planning permission of any industrial project should require a high jobs to energy demand ratio of at least say six or seven. 

    

North South Interconnector - Worth the Money ?

Aside from the renewables aspect, the main justification for the North South interconnector is a deficit of reliable electricity generation in Northern Ireland.

Today, following the closure of old plant in the North, it is the South which is exporting its surplus electricity northwards - John Fitzgerald, economist.

Despite the signing of a local reserve services contract in 2015, the construction of the second North South Interconnector is the optimum solution available to alleviate this security of supply risk and allow the surplus of generation capacity which exists in Ireland to be counted towards security of supply in Northern Ireland - Eirgrid 2015.

Eirgrid now acknowledge that the commissioning of a new plant in Northern Ireland would help solve this problem :

In Northern Ireland, emissions legislation is causing a significant amount of plant to be restricted in its running hours, or to be decommissioned. This will lead to a deficit of supply. This situation would be alleviated by the second North-South Interconnector in 2021, or by the commissioning of new plant.

The assumption that South Ireland will have surplus generation to export to the North is now questionable due to new capacity market rules:

While we have reported a large surplus of plant in previous GCS reports, we now envisage that this surplus will be reduced if it is not required by the new Capacity Market. This is because the Capacity Market will only pay for enough generating units to meet the capacity requirement - Eirgrid 2017.

Interconnectors are fraught with all sorts of engineering and system problems. The interconnector from Northern Ireland to Scotland has suffered numerous faults and England no longer has enough surplus electricity to export to South Ireland through the undersea cable between the two countries (EWIC).  

The East-West interconnector (EWIC) connects the transmission systems of Ireland and Wales with a capacity of 500 MW in either direction. However, it is difficult to predict whether or not imports for the full 500 MW will be available at all times. Informed by the proposed I-SEM Capacity Market decision, we assume a 50% derating factor, i.e. 250 MW.

For the purposes of adequacy studies, we treat the Moyle interconnector similarly to EWIC, i.e. with a suitable capacity reliance (50% of 450 MW which gives 225 MW) to account for the uncertain availability of generation in Great Britain.

So assuming that the interconnector actually works for most of the time (granted this is less of a problem with overground land cables than it is with those placed under the sea), what happens if the exporting market does not have sufficient generation to export electricity through it ? Given the new capacity market rules and the planned data centres which will drive demand for electricity upwards in South Ireland, a new power station in Belfast would probably be the least costly and most secure solution to Northern Ireland's problems. 

Furthermore, if the new All Island capacity market will pay for surplus generation in the South to export to the North, then why not just allow the capacity market to pay for that generating plant in the North and save money on a completely new grid ?

Will The Lights Stay on in Ireland ?

A new report by the European Network of Grid Operators (ENTSOE) has shown that Great Britain may not have sufficient electricity generation capacity by 2020 to keep the lights on. This has a knock on affect here in Ireland where by 2022 it is envisaged that we will become more and more dependent on interconnectors.

ENTSOE have placed Britain at the highest risk level of grid blackouts in EU but state that expensive Capacity Mechanisms may prevent them from happening. For the layman reading, this is due to lack of investment in baseload generation - gas, coal, nuclear. Lack of sufficient baseload generation in UK means interconnectors to Ireland will lie idle (where Ireland is also strapped for reliable means of power to export to UK). 

Eirgrid this year published their generation adequacy assessments up till 2025. 

Take a look at the bottom section which excludes interconnection. Green means we have sufficient generation, red means we don't. By 2022, things start getting tight, by 2023 and 2014 we are in blackout territory, highly dependent on UK to send us spare power. 

Of course, we have spent billions on new wind farms. But as ENTSEO state :

The contribution of RES [renewables] for adequacy purposes is less than for thermal plant.

I've dealt with this concept before - capacity credit.  Wind farms don't keep the lights on, power stations do. 

There is a further problem for the Irish Grid operators - Eirgrid - and that is the new data centres that are been built around the country. They consume lots of power - Eirgrid estimate that if all the data centres that are contracted are built, they will add a whopping 1,700MW on top of peak demand of about 5,000MW. This would mean we get into the red a lot quicker. 

There is a quick fix to this, of sorts, and I hinted at it earlier - Capacity Mechanisms. This involves load shedding - paying factories large amounts of money to close for a period and / or diesel generation which can ramp up alot quicker than power stations. Ireland had about 60MW of diesel generation in 2014 (referred to as Demand Side Units), we now have 230MW ! And Eirgrid have said :

The capacity of Demand Side Units in Ireland has increased to 230 MW, and is set to increase further. 

How ironic that the green revolution, the de-carbonization of our grid, the clean, green future has lead to us using more and more diesel generation - the most polluting form of electricity production. And of course, our neighbours England are also going down this path. 

Incidentally, the data centres will have back up power in the event of widespread blackouts. No, not windmills, yes you guessed it - diesel generators. The new Apple data centre in Galway will have 18 generators with a total capacity of 288MW. The new green revolution is upon us !

‘The Cloud’ Bytes Back - how Data Centres will cost Ireland dearly

Guest Post By David Hughes B. Arch CPMA, RIAI RIBA 

Cloud computing is now part of everyday life. From streaming services such as Spotify and Netflix to search engines and email from companies like Google and Yahoo to online storage services like DropBox… ‘The Cloud’ is both everywhere and yet seemingly invisible.

However in spite of its name, ‘The Cloud’ has some very earth bound needs and truly massive energy requirements. In fact, somewhat aptly, ‘The Cloud’ has overtaken world aviation in terms of its overall energy demand. 

These days Ireland seems to be a preferred location for the cloud’s physical footprint - data centres. These data centres will not simply serve Ireland’s data needs but the needs of all of Europe and beyond. This multiplies their energy impact on Ireland enormously and when you analyse the consequences, it is hard to see any silver lining.

To give an example Apple are seeking permission for a 240MW data centre in Athenry Co. Galway, which will create up to 215 jobs. The electricity consumption of this data centre will be the same as 420,000 Irish homes. This is ¼ of all Irish homes or every single house in Dublin City, Dun Laoghaire, Fingal and South County Dublin combined. Basically, the electricity needs of 1 Million people.

Electricity is a very expensive and capital-intensive form of energy. For every kWh coming out of a socket 2.7 kWh of Primary energy needs to be inputted at source. The transmission and distribution infrastructure or ‘grid’ is also massively expensive. This cost is ‘socialised’ and can account for 75% of a domestic electricity bill.

Cost Benefit Analysis?

As a society we may accept such costs to provide a benefit to 420,000 homes but is it really justifiable to socialise the same demand again for only 215 jobs? And Apple is only but one data centre.

Facebook’s 108MW centre will only create 40 jobs and use the energy of 180,000 homes.

In fact in total 1,000MW of data centres are projected for Ireland so on a pro rata basis will use the same energy demand as every home in Ireland.

40% Renewable Commitment.

In 2009 Ireland made a commitment to generate 40% of electricity from renewables. If we add this level of extra demand this makes that target much harder to achieve.

Last year the EPA stated that in relation to our 20:20:20 targets, we are only likely to achieve reductions of between 5% and 12% instead of the full 20% required. The SEAI calculates that the fine for this could be €1.6 Billion per annum.

The full 1,000MW of data centres could add 37% to overall electricity demand and will make our renewable targets proportionally harder to reach, the fines even higher again and last but not least will undo all of the CO₂ savings to date.

In the end, trying to chase this growing demand from data centres, will spawn further Wind Farms, Pylons and Transmission lines and will leave the Irish with a second  ‘Universal Social Charge’ this time for either paying an EU fine or paying for the ‘grid’ or both.

Time for a Debate.

Given these figures it’s time for a debate on ‘The Cloud’ in Ireland. Are the numbers of jobs created in anyway justified in terms of its energy demands?

The responsibility seems to fall between a myriad of different agencies and departments pursuing different agendas but each with a focus too narrow to look at the bigger picture. As a result to date, data centres have slipped through the net unchallenged.

We are at a cross roads in terms of whether we follow a route of demand reduction or increase, however ‘The Cloud’ could create the perfect storm and sink Ireland into decades of legacy costs for very expensive and unnecessary electrical infrastructure, which could be just as painful as paying back the inflated property prices that lead to the bank bailout.