Wind-powered data center more than hot air

Rachael King
08 Mar 2012
00:00
News
BusinessWeek

It takes a certain audacity to bet that an energy-gobbling data center can be powered entirely by wind. A company in Texas is doing just that.

Baryonyx will spend $280 million over the next 10 years to build a 600,000-square-foot data center with five buildings that will be powered entirely by wind. The company says it will break ground on the first data center near Austin, Texas, in the next 90 days.

Baryonyx owns both offshore and onshore wind farms in Texas that it will use to generate power for the data center, which will be run by a unit of the company known as WindData. Already Baryonyx says it has been talking to potential customers that find the costs associated with wind power as attractive as the fact that it’s renewable energy.

“We thought the renewable aspect would have customers falling over themselves to sign up, but the real green is dollars in their pockets,” says Chief Financial Officer Graeme Walker.

WindData will be able to give customers longer-term visibility on power and lease rates because the costs associated with wind farms are stable, says Walker. In the long run, he says, that can save companies money because fossil fuel prices are likely to rise.

“If you take out lease costs, power comprises about 80% of the residual costs of running a data center,” he says. Many utility companies will only sign 12-, 24-, and 36-month power contracts for data centers because of the volatility of prices for fossil fuels. By contrast, WindData plans to sign longer contracts, he says.

Both natural gas and coal-generated electricity are now cheaper than wind power. The levelized cost of natural gas is $62.24 per megawatt hour, while coal is $76.51 per megawatt hour and wind is $80.04 per megawatt hour, according to Bloomberg data for the most recent quarter. So why would companies want to sign up for a data center whose energy costs in the short run may be higher than conventional forms of electricity?

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