Ok, we all know that power is a huge consideration in building out or maintaining a data center.
To calculate the energy consumption and cost over ten years for a 1MW data center, we need to consider the following:
- Annual kWh Consumption: A 1MW data center typically consumes around 8,760,000 kWh annually, assuming it operates continuously throughout the year (1MW * 24 hours * 365 days).
- Cost per kWh: The average cost of electricity for data centers in the United States is approximately $0.139 per kWh
Using these figures, we can calculate the total cost over ten years:
\text{Annual kWh Consumption} = 1MW \times 24 \text{ hours} \times 365 \text{ days} = 8,760,000 \text{ kWh}
\text{Total kWh over 10 years} = 8,760,000 \text{ kWh/year} \times 10 \text{ years} = 87,600,000 \text{ kWh}
\text{Total Cost over 10 years} = 87,600,000 \text{ kWh} \times $0.139/\text{kWh} = $12,176,400
Therefore, a 1MW data center would consume 87,600,000 kWh, worth approximately $12,176,400 over ten years, at an average cost of $0.139 per kWh. These are approximate values and actual costs can vary based on the specific location, energy rates, and operational efficiency of the data center. So it should be no surprise that energy costs have become the second highest expense for data centers.
We’re already seeing more and more relocations and outsourced applications, primarily to reduce power expenses. During the next five years, it’s projected that one in four businesses will experience a significant business interruption. Couple that with the explosive growth of data. 120 zettabytes of data were created in 2023, which is millions of times the information of all the books ever written. Imagine where 2024 will take us.
Data center space
Going back a few years to the dot com boom and subsequent collapse, a lot of space suddenly became empty and available for pennies on the dollar. Millions of square feet of space that was built out to a specification of 100 watts per square foot was sold at bargain basement prices to enterprises seeking regulatory compliance. That space is long gone.
The subsequent advent of metered power started squeezing power margins, making reasonable return on investments even harder.
Thinking of relocating?
New data centers need 200 to 300 watts per square foot to be competitive. Unfortunately, local utilities are unable to deliver power in some markets, as the costs of producing that energy has quadrupled in the last few years. How do you combat unmanageable power expenses? Many companies are colocating to data centers in less expensive power areas, for example from the West or East coast to the Midwest. Many are seeing significant drops in price per kWH.
Other factors
The pricing for data center racks can vary significantly based on the power requirements of the sites. In 2023, the fluctuations in rack pricing were as follows:
- For low KW sites, prices ranged from $120 per kW in the most affordable market
- For high KW sites, prices could go over $250 per kW in the most expensive market
These prices reflect the cost of the rack space itself and do not include the cost of power, which would be an additional expense. The wide price range is driven by various factors including the cost of power, available supply, and market demand.
Cooling those racks adds another dimension of expense. Data centers are increasingly offering shorter term contracts to leverage clients for pricing increases at renewal.
Consider this.
In the year 2000, there were approximately fifteen million servers. That grew in 2005 to twenty seven million servers installed worldwide. By the end of 2009, there were thirty five million servers. That’s an increase of eight million servers in just four years! What did these eight million additional servers consume in power? And look where we were in 2022.
The global server market size was estimated to be USD 89.26 billion in 2022 and was anticipated to grow at a compound annual growth rate (CAGR) of 9.3% from 2023 to 2030.
A single CPU processor can consume as much as most standard light fixtures). Older data centers were designed to support four kilowatts per rack, but current requirements can be significantly higher. Cooling all these servers adds an additional expense.
Utility load versus critical load
Data centers consume power for IT equipment (critical load) and to operate cooling and lighting (utility load). Most data centers consume equal amounts of power for each. Thus, a small data center with a 4MW feed would consume 2MW of that power before any IT equipment is accounted for. On the utility side, cooling consumes 25%, air movement 12%, electricity (transformer/UPS) 10% and lighting 3%. Larger data centers have the ability to improve this percentage.
The cost to build a new data center varies significantly depending on the tier level, which reflects the data center’s redundancy and fault tolerance capabilities.
Here’s a breakdown of the costs based on the tier classification:
- Tier I & II Data Centers: These are less complex facilities with minimal redundancy. The cost estimates for building a Tier I or II data center are approximately $11,500/kW and $12,500/kW of redundant UPS (Uninterruptible Power Supply) capacity for IT respectively.
- Tier III & IV Data Centers: These data centers are designed for more critical operations with higher redundancy and fault tolerance. The cost estimates for Tier III and IV data centers are around $23,000/kW and $25,000/kW of redundant UPS capacity for IT respectively.
For a 20,000 square feet data center, the total cost would depend on the power density and the specific design and redundancy requirements. However, using the cost per kW estimates, you can get a rough idea by considering the total kW of redundant power your data center would require and multiplying it by the cost per kW for the respective tier.
For example, if a Tier I data center requires 1 MW (1,000 kW) of redundant power, the estimated cost would be: 1,000 \text{ kW} \times $11,500/\text{kW} = $11,500,000
Similarly, for a Tier IV data center with the same power requirement, the cost would be:
1,000 \text{ kW} \times $25,000/\text{kW} = $25,000,000
These figures are indicative and the actual costs can vary based on a multitude of factors including location, labor costs, materials, and specific design and operational requirements. It’s also important to consider the ongoing operational costs once the data center is up and running.
What about other complications, such as lead times?
A typical lead time to build a top tier 200W per square foot data center is one year (75,000 sq ft and up). Consider lead times for a UPS, generators and PDUs. Add time for land acquisition, design, permits and build-out.
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