Energy

At the risk of being rude, Jonathan Milne argues that Amazon Web Services needs to invest not only in jobs, but also in large-scale renewable energy projects to power the three major New Zealand data centers it announced this week.

Analysis: Amazon’s pledged $ 7.5 billion investment in building at least three large data centers on the outskirts of Auckland and the 1,000 new and continuing jobs are generating legitimate enthusiasm. But with that must come questions about how these new data centers are helping – or hindering – our emission reductions.

Because of course, “the cloud†is not really in the sky. It is firmly anchored in computer banks scattered around the world. Yesterday’s Amazon Web Services announcement follows the announcement of similar (albeit smaller) data centers to be built here by Microsoft, the Australian CDC and UK-based Lake Parime.

The Lake Parime data center will be located near the Clyde Dam in central Otago and powered by the dam owner, Contact Energy. But the rest should all be near Auckland, for easier access to customers who will be storing their data, and to submarine fiber cables.

This reduces latency – the latency time when uploading and downloading data. But it also exacerbates New Zealand’s power grid imbalance. Our electricity production is 80% renewable, but much of it comes from hydroelectric lakes in the south.

Most of the demand is in the North Island, where renewable energy is produced much less – existing wind farms and geothermal generators are not a patch on the large dams in the south. Transporting electricity to the north is expensive, and there are technical constraints to doing so.

This is why Lake Parime is building its data center near the Clyde Dam. And that’s why Meridian is looking to build a large hydrogen processing plant in Southland, to suck up the renewable energy that suddenly becomes available when the Tiwai Point aluminum smelter goes out in late 2024.

Amazon prides itself on being on track to power all of its global infrastructure with 100% renewable energy by 2025. It is the world’s largest buyer of renewable energy, and its local spokesperson tells me about specific strategies: energy efficiency, investment in off-site and large-scale renewable projects, and by deploying solar systems on the roofs of its buildings. The company will actively lobby for government policy that extends the supply of clean energy to Amazon and its customers.

“Organizations that move compute workloads to the AWS cloud can benefit from the net effect of Amazon’s sustainability efforts to reduce their carbon footprint,†the company says.

In December 2020, the company announced 26 new large-scale wind and solar projects in Australia, France, Germany, Italy, South Africa, Sweden, United Kingdom and United States. It has 232 renewable energy projects around the world, with a capacity of over 10 GW – enough to power the equivalent of more than 2 million American homes for a year. Except that the power is already expressed by Amazon’s own operations.

The company has been named for its carbon footprint and is keen to offset this criticism. Tim Dacombe-Bird, Amazon Web Services country manager for the public sector, said the New Zealand operation would be sustainable. “We believe it is vital that growth in the cloud is conducted in the most sustainable manner.”

To manage expectations, it should be noted that while Amazon promises to create 1,000 new jobs, the fine print reveals that it will only hire 200 people. The remaining jobs are hypothetical job growth in industries such as telecommunications, non-residential construction, power generation, and data center personnel, modeled in an economic impact study.

And while the company refuses to say how much of the new capacity will be built, it does indicate that the capital expenditure will include adapting the new and existing data center space to its specifications. Si will continue to expand in response to customer demand, he said.

Line company Vector (one of Amazon’s cloud computing customers in New Zealand) has already signed an agreement with Amazon Web Services to jointly develop a “new energy platform” which, according to Reseller’s technical writer News Rob O’Neill, will provide advanced counter processing from 30-minute to five-minute intervals in Australia and New Zealand. Going forward, this should enable energy and utility companies to develop innovative solutions and new market models that accelerate the adoption of renewables and electric vehicles, they say.

“We are delighted to see high-quality, blue-chip companies with a common ambition to reduce global warming, wanting to come to New Zealand to harness our unique, undeveloped renewable energy resource, which in turn offers l opportunity to develop these developments. We think it’s fantastic. “
– Mike Fuge, Energy Contact

Three years after opening, Amazon has yet to sign an agreement for the supply of electricity. Mercury Energy (another Amazon cloud customer) did not say whether they were in talks, citing commercial sensitivity. Genesis Energy said it was not in talks.

Contact Energy (yes, another cloud computing customer) says it’s not in specific conversations. Managing Director Mike Fuge told Newsroom he wants to talk to Amazon Web Services about delivering renewable energy to new data centers.

The company is already building a 152 MW geothermal power plant in Tauhara near TaupÅ, and Fuge says it has made no secret of its ambition to invest in more renewable, low-CO2 geothermal energy.

“We know that New Zealand’s high levels of renewable electricity are attractive to data center operators and that there are clear environmental and economic benefits to being in this part of the world,” he said. declared.

“With companies like Microsoft and Amazon Web Services looking to build data centers closer to Auckland, this only strengthens the opportunity,†Fuge said. “We are delighted to see high-quality, blue-chip companies with a common ambition to reduce global warming, wanting to come to New Zealand to harness our unique, undeveloped renewable energy resource, which in turn offers l opportunity to develop these developments. We think it’s fantastic. “

That’s the problem: much of this renewable energy resource remains under-exploited.

And one of the big challenges is funding. Mercury President Prue Flacks warns of the challenge of funding the new renewable power plants, grids and farms that New Zealand needs to meet its 2050 goals. We should build one new wind farm every nine months, she said.

So while Amazon’s commitment to spending and jobs is welcome, what New Zealand really needs is for the company to commit to investing in renewable energy here at large-scale, in accordance with its own global strategy.

Without it, the new data centers will only exacerbate New Zealand’s north / south imbalance and increase the risk of further blackouts like the ones we experienced last month.