By Phil Kreveld
Electrical engineering principles feed into the economics of operation of data centres. The market structure policies do not necessarily relate to the engineering and operational limitations. The politics appear to have little to do with either policies or principles.
Regarding politics, who would aspire to Chris Bowen’s job? As climate change and energy minister, he is constantly under attack. His job would be a little easier if CO2 emission targets weren’t holy writ. This is evident in forcing the Northern Territory and Queensland to focus only on new renewable energy projects for data centres. The market structure policies appear to be created without much cognisance of the physical size of the national electricity network, making some renewable projects interesting choices.
Related article: Bowen insists no ‘carve-outs’ in data centre legislation
At first glance, forcing new data centres to organise new generation to meet their energy needs seems a good idea. New sources of energy must be solar and wind. This also fits with the CO2 reduction targets. Doing the work is complicated—and very time consuming. With few exceptions, the Northern Territory being one, there is no acreage available for solar or wind in metro areas. This forces selection of generation at a distance.
The obvious solution is that, rather than direct investment in generation, a data centre guarantees a PPA with a solar or wind energy generation developer. New renewable generation projects are languishing so that the influx of new data centre proposals is an opportunity to make them bankable. This is what Chris Bowen wants.
Queensland Premier David Crisafulli senses an excellent business opportunity for Queensland because the bulk of its generation, transmission, and distribution is state-owned. The state’s coal and gas generation throw out the welcome mat. Understandably, this does not necessarily jive with Commonwealth policy. A kind of game is resulting where baseload and firming provide a Kabuki-style play of keeping up appearances.
But back to new solar and wind for data centres. They are inevitably distant from metro areas requiring long transmission lines. Their major constraint is voltage stability as shown by the formula below. The voltages at the solar farm and at the data centre differ by phase angle, delta. The angle increases with increasing power flow, and causes the voltage at the data centre end to be less stable. It is the big handicap imposed by Australia’s long transmission lines.
The stability consideration is the major reason for congestion limits on transmission.
Congestion limits get in the way of PPAs, essentially contracts for difference, but which during periods of congestion-imposed inaccessibility to transmission prevent the contracted solar or wind farm from generation, i.e., enforced curtailment. The PPA does not function thus forcing the data centre onto the spot market without recompense. The distant renewable plant is also likely to have to put up with uneconomic loss factors by virtue of long connections to major transmission corridors.
It is therefore not a given, assuming the Commonwealth Government gets its legislation through to force the issue, that (a) it will speed up data centre construction or (b) new renewable project investments. Off-grid operation, which for a sufficiently large power consuming data centre might be the best solution, is not permitted. More likely is that weasel wording will accommodate off-grid operation for selected projects, being the only practical one. Bowen’s promise is that the lawyers at the Australian Energy Regulator will decide whether a renewable energy project is more or less expensive than a fossil fuel solution. Accountants have a way out of such situations—‘just tell me what figure you’re looking for’.
To add to the economic hurdles is the requirement put on data centres to help support grid stability. This is done by them installing a large battery system-inverter/converter at the data centre substation. The battery is sectioned according to the Australian Energy Market Operator into grid support and 50% for energy arbitrage. The battery installation is also allowed to be behind the meter, thus allowing energy use offsets.
Related article: Bowen takes on Liberal states over data centre rules
Summing up, Australia presents a mixed bag with maybe some goodies for data centres but also lots of problems. Once again, renewables are held out as the cheapest electricity solution and thus data centres are required to stump up the energy they would otherwise drain, available for the punters. Lost in this reasoning are the rising network costs.
In truth, we’re not short of energy but the sources are a long way from where it’s needed—as the new data centre entrants are finding out.
