A question from Datacentre World: Can gensets get a new lease on life?
The investment in diesel gensets doesn't have to be a sunk cost, but perhaps a revenue opportunity?
I popped over from Dublin last week to attend DCW ( Datacentre World ) in London to see what the buzz for 2013 would look like…. Lots of the hackneyed cloud, BigData and everything-as-a-service tried in vain to distract me but I was more interested in seeing what made the lot of the datacentre facilities manager better, not worse! To be fair, for a ‘no charge to delegates’ event it was pretty good and I was impressed with the diversity of offers from basic CT clamp technology all the way to fully packaged diesel generator sets. In the case of the latter there were several vendors and EPCs sporting their latest wares and – while not quite like the Geneva Motor Show – they do look impressive in the metal, so to speak.
I began thinking about their utilisation. There they were – CAT, MTU, Cummins et. al., preened and polished but no doubt destined for a life of nominal utilisation at best. Not really the sort of investment to impress a CFO and perhaps a missed opportunity for revenue generation. I put this thought in stand-by (pun intended) and got to chatting with customers…
There is a discussion bubbling in Europe, and in countries with constrained electricity generation capacity in particular, where the traditional generation companies are now questioning their investment plans for new plants to replace older nuclear, oil and coal plants. The original thinking was that as renewables and gas became more attractive the utility companies would step up and start replacing the older and less attractive legacy capacity. Now these companies are questioning the position governments are taking with incentives, legislation and pricing regulation and they don’t like what they see. In the UK the week before last, both Centrica and EDF indicated their intention to build new capacity cannot be assured until there is a clear commitment from government on the legislative and regulatory landscape to ensure a balance of benefit between all participants – the utility, government and consumer.
This being the case there are some considerations for datacentre operators:
- On-site generation technologies has become an attractive way to mitigate the risk of supply interruption and price shocks
- The gap between electricity generation and demand is closing so the economic rewards for demand response participation will improve in certain markets
- The argument against running on-site diesel generators, especially the newer and cleaner designs, for demand response because of the carbon impact is weakening when one considers this may obviate the need to build new plant and maintain spinning reserve
So back to my standby thought – assuming there is no collapse in energy costs (more on that in a future blog) and that the issue of ‘peak demand’ does not go away anytime soon, on-site generation capacity could be soon seeing a more profitable and fulfilling existence. Isn’t that what we all strive for anyway? And isn’t that the sort of thing that would impress a CFO?