The rise of wind-powered data centres

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Richard Heap
September 25, 2017
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The rise of wind-powered data centres

People in the wind sector will rightly get excited about electric vehicles, and how they could significantly raise demand for electricity. Phwoar! Look at the charging points on those!

But let’s not let this overshadow another sector that is a big user of electricity and where demand is growing. Yes, data centres. Okay, this may not be as sexy as a load of shiny new cars – unless you have a fetish for rooms full of computers – but it is still a power-hungry sector that could help re-shape the electricity sector.

In the ‘Global Cloud Index’ report from IT giant Cisco that was published last November, but which I only stumbled across this week, it forecast that internet traffic going through data centres could rise from 4.7ZB at the end of 2015 to 15.2ZB at the end of 2020, or a threefold increase.

Installed capacity in data centres is set to grow fivefold over the same period to around 1.8ZB in 2020. That is serious growth.

The ZB there is a ‘zettabyte’, which is a unit of digital information that is equivalent to about 1trillion gigabytes, and the additional demand for this data is coming from two trends with which I am sure you are familiar. First, increased demand from consumers for services like video streaming and social media on their phones and computers; and second, more businesses deciding to host their data remotely 'in the cloud' rather than locally.

Cisco says this means that the number of ‘hyperscale’ data centres globally needs to grow from 259 at the end of 2015 to 385 at the end of 2020; and an estimated 53% of all internet traffic in 2020 would go through those data centres, up from 42% now.

And what is ‘hyperscale’? Well, this refers to the company that is operating or owning the data centre, not the data centre itself.

Cisco says it refers to a company that raises either $8bn a year from e-commerce; $4bn from internet, social networking and search engine services; $2bn from providing software-as-a-service; or $1bn from infrastructure-as-a-service. That includes giants like Amazon, Alibaba, Apple, eBay, Facebook, Google, Rackspace, Salesforce and Yahoo. The usual suspects.

Now, these companies may not own the data centre themselves. They might simply lease it from an independent developer. But many have green dreams and will power it with wind energy.

Amazon, Apple, Facebook and Google are among the corporate energy buyers who have committed to source 100% of their electricity need from renewables and signed power purchase agreements (PPAs) with wind farm operators. And so, if they need to build more data centres to cope with the growing demand for data the firms such as Cisco have identified, then that should mean more PPAs for the wind sector and more certainty for the investors in the schemes that will be providing the electricity.

I also wonder if there is another potential knock-on effect. Will we see more of these firms develop wind farms by themselves? At present, PPAs are a well-used model, particularly in the US, and we have seen these firms get involved as a co-developer on wind projects. It seems likely that one or more of these firms could easily find a piece of land and then develop the project themselves.

This would give those businesses the security of supply they demand, and with the potential to sell any power that they do not use. Let’s not forget that just 18 months ago Apple set up an arm so it could sell excess power produced by its solar panels.

In the meantime, this is an opportunity for wind developers to get the certainty for their projects by signing more PPAs. In the last week, we have seen large PPAs signed by manufacturers including Anheuser-Busch, General Motors and Kimberly-Clark, and it is great to see that diversity of firm in the market for wind power.

But let’s not forget the large tech companies who have been among the pioneers in the PPAs market and, thanks to the growth of data centres, should be in the market to sign more of them.

People in the wind sector will rightly get excited about electric vehicles, and how they could significantly raise demand for electricity. Phwoar! Look at the charging points on those!

But let’s not let this overshadow another sector that is a big user of electricity and where demand is growing. Yes, data centres. Okay, this may not be as sexy as a load of shiny new cars – unless you have a fetish for rooms full of computers – but it is still a power-hungry sector that could help re-shape the electricity sector.

In the ‘Global Cloud Index’ report from IT giant Cisco that was published last November, but which I only stumbled across this week, it forecast that internet traffic going through data centres could rise from 4.7ZB at the end of 2015 to 15.2ZB at the end of 2020, or a threefold increase.

Installed capacity in data centres is set to grow fivefold over the same period to around 1.8ZB in 2020. That is serious growth.

The ZB there is a ‘zettabyte’, which is a unit of digital information that is equivalent to about 1trillion gigabytes, and the additional demand for this data is coming from two trends with which I am sure you are familiar. First, increased demand from consumers for services like video streaming and social media on their phones and computers; and second, more businesses deciding to host their data remotely 'in the cloud' rather than locally.

Cisco says this means that the number of ‘hyperscale’ data centres globally needs to grow from 259 at the end of 2015 to 385 at the end of 2020; and an estimated 53% of all internet traffic in 2020 would go through those data centres, up from 42% now.

And what is ‘hyperscale’? Well, this refers to the company that is operating or owning the data centre, not the data centre itself.

Cisco says it refers to a company that raises either $8bn a year from e-commerce; $4bn from internet, social networking and search engine services; $2bn from providing software-as-a-service; or $1bn from infrastructure-as-a-service. That includes giants like Amazon, Alibaba, Apple, eBay, Facebook, Google, Rackspace, Salesforce and Yahoo. The usual suspects.

Now, these companies may not own the data centre themselves. They might simply lease it from an independent developer. But many have green dreams and will power it with wind energy.

Amazon, Apple, Facebook and Google are among the corporate energy buyers who have committed to source 100% of their electricity need from renewables and signed power purchase agreements (PPAs) with wind farm operators. And so, if they need to build more data centres to cope with the growing demand for data the firms such as Cisco have identified, then that should mean more PPAs for the wind sector and more certainty for the investors in the schemes that will be providing the electricity.

I also wonder if there is another potential knock-on effect. Will we see more of these firms develop wind farms by themselves? At present, PPAs are a well-used model, particularly in the US, and we have seen these firms get involved as a co-developer on wind projects. It seems likely that one or more of these firms could easily find a piece of land and then develop the project themselves.

This would give those businesses the security of supply they demand, and with the potential to sell any power that they do not use. Let’s not forget that just 18 months ago Apple set up an arm so it could sell excess power produced by its solar panels.

In the meantime, this is an opportunity for wind developers to get the certainty for their projects by signing more PPAs. In the last week, we have seen large PPAs signed by manufacturers including Anheuser-Busch, General Motors and Kimberly-Clark, and it is great to see that diversity of firm in the market for wind power.

But let’s not forget the large tech companies who have been among the pioneers in the PPAs market and, thanks to the growth of data centres, should be in the market to sign more of them.

People in the wind sector will rightly get excited about electric vehicles, and how they could significantly raise demand for electricity. Phwoar! Look at the charging points on those!

But let’s not let this overshadow another sector that is a big user of electricity and where demand is growing. Yes, data centres. Okay, this may not be as sexy as a load of shiny new cars – unless you have a fetish for rooms full of computers – but it is still a power-hungry sector that could help re-shape the electricity sector.

In the ‘Global Cloud Index’ report from IT giant Cisco that was published last November, but which I only stumbled across this week, it forecast that internet traffic going through data centres could rise from 4.7ZB at the end of 2015 to 15.2ZB at the end of 2020, or a threefold increase.

Installed capacity in data centres is set to grow fivefold over the same period to around 1.8ZB in 2020. That is serious growth.

The ZB there is a ‘zettabyte’, which is a unit of digital information that is equivalent to about 1trillion gigabytes, and the additional demand for this data is coming from two trends with which I am sure you are familiar. First, increased demand from consumers for services like video streaming and social media on their phones and computers; and second, more businesses deciding to host their data remotely 'in the cloud' rather than locally.

Cisco says this means that the number of ‘hyperscale’ data centres globally needs to grow from 259 at the end of 2015 to 385 at the end of 2020; and an estimated 53% of all internet traffic in 2020 would go through those data centres, up from 42% now.

And what is ‘hyperscale’? Well, this refers to the company that is operating or owning the data centre, not the data centre itself.

Cisco says it refers to a company that raises either $8bn a year from e-commerce; $4bn from internet, social networking and search engine services; $2bn from providing software-as-a-service; or $1bn from infrastructure-as-a-service. That includes giants like Amazon, Alibaba, Apple, eBay, Facebook, Google, Rackspace, Salesforce and Yahoo. The usual suspects.

Now, these companies may not own the data centre themselves. They might simply lease it from an independent developer. But many have green dreams and will power it with wind energy.

Amazon, Apple, Facebook and Google are among the corporate energy buyers who have committed to source 100% of their electricity need from renewables and signed power purchase agreements (PPAs) with wind farm operators. And so, if they need to build more data centres to cope with the growing demand for data the firms such as Cisco have identified, then that should mean more PPAs for the wind sector and more certainty for the investors in the schemes that will be providing the electricity.

I also wonder if there is another potential knock-on effect. Will we see more of these firms develop wind farms by themselves? At present, PPAs are a well-used model, particularly in the US, and we have seen these firms get involved as a co-developer on wind projects. It seems likely that one or more of these firms could easily find a piece of land and then develop the project themselves.

This would give those businesses the security of supply they demand, and with the potential to sell any power that they do not use. Let’s not forget that just 18 months ago Apple set up an arm so it could sell excess power produced by its solar panels.

In the meantime, this is an opportunity for wind developers to get the certainty for their projects by signing more PPAs. In the last week, we have seen large PPAs signed by manufacturers including Anheuser-Busch, General Motors and Kimberly-Clark, and it is great to see that diversity of firm in the market for wind power.

But let’s not forget the large tech companies who have been among the pioneers in the PPAs market and, thanks to the growth of data centres, should be in the market to sign more of them.

People in the wind sector will rightly get excited about electric vehicles, and how they could significantly raise demand for electricity. Phwoar! Look at the charging points on those!

But let’s not let this overshadow another sector that is a big user of electricity and where demand is growing. Yes, data centres. Okay, this may not be as sexy as a load of shiny new cars – unless you have a fetish for rooms full of computers – but it is still a power-hungry sector that could help re-shape the electricity sector.

In the ‘Global Cloud Index’ report from IT giant Cisco that was published last November, but which I only stumbled across this week, it forecast that internet traffic going through data centres could rise from 4.7ZB at the end of 2015 to 15.2ZB at the end of 2020, or a threefold increase.

Installed capacity in data centres is set to grow fivefold over the same period to around 1.8ZB in 2020. That is serious growth.

The ZB there is a ‘zettabyte’, which is a unit of digital information that is equivalent to about 1trillion gigabytes, and the additional demand for this data is coming from two trends with which I am sure you are familiar. First, increased demand from consumers for services like video streaming and social media on their phones and computers; and second, more businesses deciding to host their data remotely 'in the cloud' rather than locally.

Cisco says this means that the number of ‘hyperscale’ data centres globally needs to grow from 259 at the end of 2015 to 385 at the end of 2020; and an estimated 53% of all internet traffic in 2020 would go through those data centres, up from 42% now.

And what is ‘hyperscale’? Well, this refers to the company that is operating or owning the data centre, not the data centre itself.

Cisco says it refers to a company that raises either $8bn a year from e-commerce; $4bn from internet, social networking and search engine services; $2bn from providing software-as-a-service; or $1bn from infrastructure-as-a-service. That includes giants like Amazon, Alibaba, Apple, eBay, Facebook, Google, Rackspace, Salesforce and Yahoo. The usual suspects.

Now, these companies may not own the data centre themselves. They might simply lease it from an independent developer. But many have green dreams and will power it with wind energy.

Amazon, Apple, Facebook and Google are among the corporate energy buyers who have committed to source 100% of their electricity need from renewables and signed power purchase agreements (PPAs) with wind farm operators. And so, if they need to build more data centres to cope with the growing demand for data the firms such as Cisco have identified, then that should mean more PPAs for the wind sector and more certainty for the investors in the schemes that will be providing the electricity.

I also wonder if there is another potential knock-on effect. Will we see more of these firms develop wind farms by themselves? At present, PPAs are a well-used model, particularly in the US, and we have seen these firms get involved as a co-developer on wind projects. It seems likely that one or more of these firms could easily find a piece of land and then develop the project themselves.

This would give those businesses the security of supply they demand, and with the potential to sell any power that they do not use. Let’s not forget that just 18 months ago Apple set up an arm so it could sell excess power produced by its solar panels.

In the meantime, this is an opportunity for wind developers to get the certainty for their projects by signing more PPAs. In the last week, we have seen large PPAs signed by manufacturers including Anheuser-Busch, General Motors and Kimberly-Clark, and it is great to see that diversity of firm in the market for wind power.

But let’s not forget the large tech companies who have been among the pioneers in the PPAs market and, thanks to the growth of data centres, should be in the market to sign more of them.

People in the wind sector will rightly get excited about electric vehicles, and how they could significantly raise demand for electricity. Phwoar! Look at the charging points on those!

But let’s not let this overshadow another sector that is a big user of electricity and where demand is growing. Yes, data centres. Okay, this may not be as sexy as a load of shiny new cars – unless you have a fetish for rooms full of computers – but it is still a power-hungry sector that could help re-shape the electricity sector.

In the ‘Global Cloud Index’ report from IT giant Cisco that was published last November, but which I only stumbled across this week, it forecast that internet traffic going through data centres could rise from 4.7ZB at the end of 2015 to 15.2ZB at the end of 2020, or a threefold increase.

Installed capacity in data centres is set to grow fivefold over the same period to around 1.8ZB in 2020. That is serious growth.

The ZB there is a ‘zettabyte’, which is a unit of digital information that is equivalent to about 1trillion gigabytes, and the additional demand for this data is coming from two trends with which I am sure you are familiar. First, increased demand from consumers for services like video streaming and social media on their phones and computers; and second, more businesses deciding to host their data remotely 'in the cloud' rather than locally.

Cisco says this means that the number of ‘hyperscale’ data centres globally needs to grow from 259 at the end of 2015 to 385 at the end of 2020; and an estimated 53% of all internet traffic in 2020 would go through those data centres, up from 42% now.

And what is ‘hyperscale’? Well, this refers to the company that is operating or owning the data centre, not the data centre itself.

Cisco says it refers to a company that raises either $8bn a year from e-commerce; $4bn from internet, social networking and search engine services; $2bn from providing software-as-a-service; or $1bn from infrastructure-as-a-service. That includes giants like Amazon, Alibaba, Apple, eBay, Facebook, Google, Rackspace, Salesforce and Yahoo. The usual suspects.

Now, these companies may not own the data centre themselves. They might simply lease it from an independent developer. But many have green dreams and will power it with wind energy.

Amazon, Apple, Facebook and Google are among the corporate energy buyers who have committed to source 100% of their electricity need from renewables and signed power purchase agreements (PPAs) with wind farm operators. And so, if they need to build more data centres to cope with the growing demand for data the firms such as Cisco have identified, then that should mean more PPAs for the wind sector and more certainty for the investors in the schemes that will be providing the electricity.

I also wonder if there is another potential knock-on effect. Will we see more of these firms develop wind farms by themselves? At present, PPAs are a well-used model, particularly in the US, and we have seen these firms get involved as a co-developer on wind projects. It seems likely that one or more of these firms could easily find a piece of land and then develop the project themselves.

This would give those businesses the security of supply they demand, and with the potential to sell any power that they do not use. Let’s not forget that just 18 months ago Apple set up an arm so it could sell excess power produced by its solar panels.

In the meantime, this is an opportunity for wind developers to get the certainty for their projects by signing more PPAs. In the last week, we have seen large PPAs signed by manufacturers including Anheuser-Busch, General Motors and Kimberly-Clark, and it is great to see that diversity of firm in the market for wind power.

But let’s not forget the large tech companies who have been among the pioneers in the PPAs market and, thanks to the growth of data centres, should be in the market to sign more of them.

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Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.