Low and stable electricity prices are likely to make the U.S. a target for data center investment at Europe's expense, according to a report published by 451 Research. Lower electricity prices are also expected to impact U.S. investment in energy-efficient technologies.
The reason for this unexpected price stability in the U.S. is its booming shale gas industry. As a result, the energy bill for a medium-sized 2 MW data center in the U.S. with 50% baseload energy consumption could be as much as $500,000 a year less than a comparable facility in the UK — and about $750,000 less than one in Germany.
Electricity prices in some European countries, particularly Germany, are already twice those in the U.S. and prices have more than doubled in countries such as the UK, France and Germany during the past decade, while they have held mostly flat in the U.S.
The price of power can significantly alter the overall lifetime cost of a data center. Assuming a 15-year lifespan, a price of $0.067/kWh contributes about 30% of a facility's operating expense and usually accounts for 10-15% of the total cost of building and running a data center.
"This figure is large enough to sway decisions about where a datacenter should be built," said Andy Lawrence, research vice president, Datacenter Technologies (DCT) & Eco-Efficient IT, 451 Research, who co-authored the report with Rhonda Ascierto, senior analyst, 451 Research.
"The effect on datacenter-technology providers is contradictory. The growth of U.S. datacenter activity and investment will boost the market for equipment of all kinds but may limit demand for certain energy-efficient datacenter technologies, especially where there is a trade-off with risk and availability. However, with its higher energy prices, the European market should be more attractive to suppliers of technology that improve data center efficiency," Lawrence added.
Andy Lawrence will lead a panel discussion on energy, efficiency and economics at 451 Research's Hosting and Cloud Transformation Summit on April 9 th and 10th in London. Lawrence will be joined on the panel by Ibrahim Chadirichi, director of Information Management, ARM, and Martin Bradley, head of European Data Center Engineering and Operations, Morgan Stanley.