How Data Center Operators Can Avoid Energy Price Hikes This Winter
Energy consumption is one of the largest operating expenses for a data center, contributing to nearly 50 percent of total operating expenses. Due to last winter’s “polar vortex” that caused a deep freeze in much of the U.S., many large energy consumers in unregulated markets saw their energy prices quadruple. In fact, we have seen a tremendous amount of volatility in energy prices over the last decade. Excess Logic continues reposting interesting articles. We'd like to pay your attention how important to recycle e-waste and used computer, lab, R&D, electronic equipment instead of disposing them into a dumpster. Data center operators and owners can minimize the impact of unpredictable energy markets by better understanding the markets and establishing smart energy procurement strategies. Below is background on energy pricing trends, factors likely to impact future pricing, and proactive strategies for procuring energy in an unpredictable market. How to recycle unwanted data center's equipment: servers, switchers, routers
Factors Impacting PricingThere are a number of factors impacting natural gas and electric rates, including: 1. Natural Gas Storage: In the beginning of 2014, natural gas stockpiles hit the lowest level since 2004 as a result of cold weather and winter storms. Due to the mild weather this past summer and so far this winter, natural gas storage is slightly above last year and about 260 billion cubic feet behind the five-year average. What do these numbers mean for energy pricing? A cold winter will likely move this market higher. If we exit the 2014-2015 heating season with low natural gas storage levels as we did this past year, there will be upward pressure on the market through the 2015 season. 2. Retirement of Coal-Fired Power Plants: Natural gas generation of electricity continues to grow as coal-fired power plants are retired. This has created a permanent increase in demand for natural gas. A few key statistics are:
- Natural gas has become the fuel of choice for electric generation, especially as new EPA standards impact 1,400 coal and oil units.
- Scheduled coal plant retirements between 2013 and 2020 will result in increased natural gas generation.
- Approximately one-third of electricity in the U.S. is generated using natural gas. Another one-third is coal and the last one-third is comprised of all other (nuclear, renewable, etc.).
- United States: $3.80 /dth
- Europe: $7.80 /dth
- Asia: $14.00/dth
- South America: $15.00/dth