Our electricity supply is rapidly approaching another crisis as lake levels fall and there is insufficient coal at Huntly to run that station around the clock. Isn't it ridiculous to be adding data centres, swapping coal gas boilers for electricity and pushing electric cars while we cannot keep existing users supplied?
Thanks Owen. The actual total demand from data centers being added to the grid is around 200MW. Microsoft is just one of them. It is interesting to note that Singapore will not permit data centers and Ireland has pressed pause for exactly this reason (too great a draw on the grid).
What concerns me more about this while mess is that I suspect that the data centers add very little value to the New Zealand economy and meanwhile we have exporting primary industries based here having to load shed and reduce their production to keep the grid from browning out.
What this clearly signals is market failure as the demand is clearly there, but the supply is insufficient to support existing industries let alone growth.
The boards of our biggest generators also seem to have tunnel vision with the only criteria for new generation being "zero emissions" with much less consideration given to the quality of the generation.
With regards to your question about adding load by electrifying everything, I fear that the reality is much worse, industrial demand for electricity is down significantly suggesting that more businesses are closing that being added to the grid.
Evening Peter this was my thoughts also, will the data centres be required to shed load for demand management? I do not have an answer to that question.
As prices increase Microsoft are in a position to pay them, many locals will not be. As I understand it data centres need continuous unbroken power. Their contract will prioritize them almost certainly. For power suppliers this is a good situation, as they can return value to shareholders, for the average citizen, not so much, but what recourse do they have? Pay to play politician's are not interested, many (most?) are financially pacified. Hard times for sure.
Yes, this is unfortunately a feature of a small fractured market.
From Contact's perspective this is good business. They have Microsoft turning up with $300M of CAPEX that gives an asset that will be fully amortized once the 10 year contract is concluded and will generate great returns. Its a no brainer.
The wider context is that Contact was spun out of ECNZ in 1996 and privatised. NZ needs more generation right now and the Te Huka 3 geothermal is exactly the type of generation we need. Microsoft meanwhile is likely to offshore all their profits and contribute almost nothing to crown revenue.
It's not a good situation, but entirely understandable.
Our electricity supply is rapidly approaching another crisis as lake levels fall and there is insufficient coal at Huntly to run that station around the clock. Isn't it ridiculous to be adding data centres, swapping coal gas boilers for electricity and pushing electric cars while we cannot keep existing users supplied?
Thanks Owen. The actual total demand from data centers being added to the grid is around 200MW. Microsoft is just one of them. It is interesting to note that Singapore will not permit data centers and Ireland has pressed pause for exactly this reason (too great a draw on the grid).
What concerns me more about this while mess is that I suspect that the data centers add very little value to the New Zealand economy and meanwhile we have exporting primary industries based here having to load shed and reduce their production to keep the grid from browning out.
What this clearly signals is market failure as the demand is clearly there, but the supply is insufficient to support existing industries let alone growth.
The boards of our biggest generators also seem to have tunnel vision with the only criteria for new generation being "zero emissions" with much less consideration given to the quality of the generation.
With regards to your question about adding load by electrifying everything, I fear that the reality is much worse, industrial demand for electricity is down significantly suggesting that more businesses are closing that being added to the grid.
It would be interesting to know where Transpower sit in this surely Microsoft would want to tie them into the continuity of supply deal as per Contact
Evening Peter this was my thoughts also, will the data centres be required to shed load for demand management? I do not have an answer to that question.
As prices increase Microsoft are in a position to pay them, many locals will not be. As I understand it data centres need continuous unbroken power. Their contract will prioritize them almost certainly. For power suppliers this is a good situation, as they can return value to shareholders, for the average citizen, not so much, but what recourse do they have? Pay to play politician's are not interested, many (most?) are financially pacified. Hard times for sure.
Yes, this is unfortunately a feature of a small fractured market.
From Contact's perspective this is good business. They have Microsoft turning up with $300M of CAPEX that gives an asset that will be fully amortized once the 10 year contract is concluded and will generate great returns. Its a no brainer.
The wider context is that Contact was spun out of ECNZ in 1996 and privatised. NZ needs more generation right now and the Te Huka 3 geothermal is exactly the type of generation we need. Microsoft meanwhile is likely to offshore all their profits and contribute almost nothing to crown revenue.
It's not a good situation, but entirely understandable.