Auckland power distributor Vector expects data centres to put 500 megawatts of extra demand. Photo / Supplied
Auckland power distributor Vector expects data centres to put 500 megawatts of extra demand. Photo / Supplied
Auckland electricity distributor Vector expects to see 500 megawatts (MW) of demand from power-hungry data centres over the next five years.
That’s the equivalent of the power demand from 200,000 homes.
Fund managers say data centres have become “red hot”, especially since innovations like artificial intelligence put them in greaterdemand.
However, that growth has made them controversial overseas.
This week, NZX-listed infrastructure investor Infratil easily raised $1 billion for expansion in data centres, specifically CDC, which has facilities in New Zealand and Australia.
The average demand from a data centre on the Vector network is about 20 megavolt amperes (MVA), which is the same capacity needed to supply 8000 residential homes, Vector said.
“Based on the data centres already connected, and confirmed plans agreed with us in coming years, we could see the total capacity required for data centres reach around 500MW over the next five years,” Vector said in comments supplied to the Herald.
“However this depends on the rate of expansion of their services to their customers,” the company said.
Vector said it worked closely with customers to understand their needs so that investment in its network was in step with demand.
“This is particularly relevant to data centres, since their capacity requirement grows over time, starting low when a data centre opens and growing over time as demand for cloud storage grows,” Vector said.
“Data centres, just like any other customer, pay for their connections and any associated upstream costs resulting from a need to upgrade capacity to supply their connection.
“This ensures that those driving the need to invest in network growth, cover the cost of doing so.”
Vector said data centres are not the only factor driving growth on the network.
The company is also seeing a lot of growth driven by other factors, including electric cars, buses and ferries, as well as continuing commercial and residential development.
NZX-listed Vector is New Zealand’s largest distributor of electricity and gas, owning and operating networks which span the Auckland region. It has 612,000 electricity connections.
State power generator Transpower acknowledged that data centres will add to already rising demand, but says it continues to see a steady stream of enquiries from renewable power generators wanting to supply the grid.
Transpower’s executive general manager grid development John Clarke said several recent announcements for data centres in New Zealand indicate that developers see real potential in connecting to a highly renewable electricity grid while making use of low ambient temperatures that provide natural cooling.
As it stands, the already announced data centres are for connection into local lines networks rather than directly to Transpower’s grid.
“We have had a number of initial inquiries from developers exploring options for connecting data centres directly to the grid, but only two have progressed beyond the inquiry stage,” Clarke said.
Transpower has gathered load forecasts from local lines companies covering the next 15 years.
Transpower expects to see more demand from data centres. Photo / Supplied
It’s research showed that data centres have a reasonably steady demand profile throughout the day, as well as across the year.
“However, we are interested in looking at whether they have the ability to shift demand and will explore this as part of our ongoing work to assess the impact of new load types, including data centres,” Clarke said.
New Zealand has a market-driven system rather than central planning of generation, so there needs to be an investment case for generators to come here.
Clarke said Transpower continues to see a steady stream of new connection inquiries from generators interested in connecting to the grid with 14.2 gigawatts of new renewable generation projects in the pipeline at the investigation or delivery stages of development.
“With connection enquiries continuing to convert into committed projects, the country is on track to be able to supply our forecast of a 68% increase in electricity demand between 2020 and 2050,” he said.
Governments around the world are intensifying scrutiny on the building of data centres over fears that their huge energy usage is putting excessive pressure on national climate targets and electricity grids.
Ireland, Germany, Singapore and China as well as a US county and Amsterdam in the Netherlands have introduced restrictions on new data centres in recent years to comply with more stringent environmental requirements, London’s Financial Times reported.
The FT said a threat to new projects is highest in Ireland, a hotspot for server farms built by cloud computing companies such as Google and Microsoft, because of its low tax rate and easy access to high-capacity subsea cables through which global internet traffic is run.
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.
