Every email sent, photo or video taken, crypto token traded, and online article published adds to the ever-growing volume of digital data around the world.
According to the International Data Group, a market research organization, nearly 100tn GB of data were created and consumed last year alone, which is equivalent to 4.5tn times the entire text content of Wikipedia. By 2025, this number will nearly double again.
Driving this growth are the energy-intensive data centers around the world that process, host and store digital information, but these data centers are quickly running out of capacity.
Developers are scrambling to expand existing centers or build new ones to meet demand. More and more people and devices are becoming connected online; streaming services like Netflix and Spotify have millions of concurrent users; and the emergence of cryptocurrencies and their onerous mining methods have all added to the pressure. The Cambridge Center for Alternative Finance estimates that Bitcoin mining and trading consumed nearly three times as much electricity as the entire island of Ireland last year.
Our reliance on data centers for the functions of modern life is only becoming more entrenched. Petroc Taylor, a research analyst in the field of data centers and telecommunications at Statista, said that in the next few years, “the two bigger drivers will be artificial intelligence and the Internet of Things.” “These AI algorithms require large amounts of training data, and as they become more complex, they will need to filter more data.”
Large language model For example, GPT-4, which provides support for ChatGPT, requires a lot of computing power to create and improve. While OpenAI, the company behind ChatGPT, doesn’t release exact numbers, its estimated cost of training processing power for its older model, GPT-3, is between $3.2 million and $4.6 million.for training GPT-4, cost has jumped to over $100 millionAccording to estimates by OpenAI CEO Sam Altman.
Solving the looming data center crisis isn’t as simple as building a new business or expanding an existing one. Developers must overcome obstacles including local planning restrictions, the need to increase power generation and upgrade the country’s transmission system.
These restrictions limit the development of new centers in areas where data center clusters are located, potentially forcing developers to look elsewhere.
The amount of electricity consumed by data centers has also raised questions about their sustainability and their impact on countries’ net zero goals.
“It’s certainly physically possible to accommodate this demand growth, decarbonize and have enough generation,” said Mark Turner, a partner at energy consultancy Baringa. “But balancing all those things does become special. difficulty.”
Data center analysis
A personal computer contains a hard drive to store data, a processor to modify the data, network hardware to connect to the Internet, and a battery or power supply to power it. As electricity passes through the laptop’s hardware, it generates heat, which is cooled by a fan.
Data Center takes these core concepts of standard computers and scales them to a massive level. Instead of one hard drive on your computer for storing photos and home videos, a data centre will contain multiple thousands of hard drives and powerful processors inside “servers” which store, process and host vast quantities of data, for example the entire video catalogue of Youtube.
Massive numbers of servers are stored in rows of energy-intensive “racks” that generate incredible amounts of heat. This heat requires specialized cooling systems to regulate it. Data centers need to be maintained between 18 and 27 degrees Celsius to prevent hardware deterioration.
There are various ownership structures for data centers. Organizations can build and operate their own data centers based on their specific needs, which may be preferable for security-sensitive government or military operations. On the other hand, server space can be rented on a short-term basis from companies that own and operate data centers called “cloud providers” (such as Amazon Web Services or Google Cloud). No matter how they operate, all data centers require large amounts of reliable power to power their hardware and cooling systems.
While data center energy efficiency has improved significantly over the past decade, growing data demands have driven an increase in overall electricity usage.
The energy efficiency of a data center is measured in terms of power usage effectiveness (PUE), which is equal to the total power entering the data center divided by the total energy used to run the equipment within the data center. Therefore, perfect efficiency would receive a PUE score of 1.
Until 2018, data centers had made huge strides in energy efficiency due to the integration and improvement of cooling systems. However, these efficiency gains have plateaued.
When fiber routes converge
Data centers tend to be geographically clustered due to factors such as geography, climate and skilled labor; large hubs include Dublin, Amsterdam, Zurich and Virginia.
Structure Research, a consulting firm specializing in network infrastructure, estimates that data centers consumed about 1% of total global energy demand last year. However, power demand is not evenly distributed around the world due to clustering.
Turner, who also looked at the specifics of the Irish data center market, said the most active centers are “connected to fiber optic backbones that span different continents”. “That’s where places like Amsterdam and Dublin really win because they have a lot of fiber lines coming together to one place.”
have 82 data centers operating in the Republic For example, Ireland, most of which is in the Dublin area. A further 40 have received planning approval and 12 are under construction, according to Irish market research firm Bit Power.
By 2022, these centers will account for 19% of Ireland’s total energy consumption. According to Irish transmission system operator Eirgrid, this proportion will increase to 28% by 2031. Eirgrid has stopped providing new grid connections to data centers in the Dublin area until 2028 due to concerns about its grid capacity.
“There is definitely a desire to strengthen the network around Dublin,” Turner said. “But it’s very difficult to do that… especially to get the right planning permission and generally speaking it’s very difficult to plan new wires, especially in built-up areas.”
Electricity supply and transmission problems are not unique to Ireland. According to Structure Research, the US state of Virginia has one of the largest data center clusters in the United States, accounting for 27% of all data center capacity in the United States. Its 300 centers consume 20% of all the state’s electricity needs.
Tech companies concerned about how this level of demand affects the environment are planning and investing in more sustainable cloud services. Google CEO Sundar Pichai announced in 2020 that it “commits to using 24/7 carbon-free energy operations in all data centers and campuses around the world by 2030.”
The company plans to purchase clean energy around the clock in the markets where it operates and is also investing in renewable energy. Other data center operators have made similar commitments to decarbonize their grids.
Data centers are becoming important wholesale power market players and can influence the direction of power generation investment.
In April this year, Google signed a direct power purchase agreement to purchase 150 MW of wind energy from Ørsted. Ørsted is a Danish energy company that operates wind farms in the United States.
Such power agreements entered into by data center operators can help secure construction financing by guaranteeing the clean energy provider a fixed revenue stream for many years. An energy industry source told the Financial Times that “power purchase agreements are one of the key factors in deciding whether to build a wind farm”.
Turner said this showed that new hubs, as well as expansions of existing centres, could play a role in meeting future demand.
“Probably the most obviously and comprehensively good locations are those that are already developed,” he said. “In the scorecard of factors surrounding the location of data centers, there is sufficient headroom and capacity on the grid, as well as the availability of low-carbon electricity (ideally at low prices) – (the latter) is becoming increasingly important. This may It will cause operators to look elsewhere.”
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