Understanding the factors that impact data center energy pricing is essential for controlling costs and ensuring efficient, uninterrupted service.
Companies that aim to improve their data center processes have to be familiar with the colocation power requirements.
This tutorial will explain essential factors that impact the overall power expenses of a colocation facility. The text will also elaborate on calculating colocation power requirements to help businesses make informed decisions.
9 Factors That Contribute to Data Center Power Pricing
Because energy consumption is a significant cost contributor to colocation data centers, its optimal usage influences savings. Comprehending the variables that influence a power price helps in cost management and efficiency improvement.
When companies assess these factors, they can make decisions that maximize sustainability, reliability, and performance.
The following text elaborates on the nine most important factors that contribute to data center power pricing.
Energy Purchase Price
The energy purchase price depends on market rates and agreements with energy suppliers. Prices fluctuate based on supply, demand, and overall market conditions. To keep costs predictable, data centers often sign fixed-price contracts.
Additionally, energy tariffs vary by location, which enables data centers to reduce their expenses by choosing regions with more favorable rates.
Power Usage Effectiveness (PUE)
PUE estimates a data center's energy efficiency by comparing the total energy spent to the power used by IT equipment. A lower PUE means better efficiency, which helps reduce energy costs and improves operational performance.
PUE depends on cooling system design, climate conditions, and facility layout. Data centers optimize PUE with advanced cooling systems, energy-efficient equipment, and intentionally designed infrastructure.
HPC Equipment Power Consumption
Clients sometimes host high-performance computing (HPC) workloads in colocation data centers, including AI, machine learning, and large-scale simulations, which require significant power.
The servers, storage systems, and networking equipment used in HPC consume a lot of electricity, increasing operational costs. As these workloads scale, energy consumption grows, increasing the overall cost per kilowatt-hour in colocation facilities.
In addition, the need for powerful processors (CPUs and GPUs), large storage devices (e.g., disk arrays or cloud storage systems), and high-performance networking equipment creates additional demand for cooling resources, which escalates the electricity expenditure.
Cooling System Efficiency
A data center has to maintain optimal operational temperatures. Therefore, strong cooling systems are crucial. Weak cooling increases energy consumption, which raises operational costs.
To get ahead of that, colocation centers employ advanced cooling technologies, such as CRAC (Computer Room Air Conditioning) units and high-efficiency chillers, which reduce these expenses. CRAC controls temperature and humidity within the facility. On the other hand, high-efficiency chillers cool large areas with less power.
In addition, liquid immersion cooling submerges servers in non-conductive liquids that absorb heat better than air systems. Although initially more expensive, liquid immersion cooling lowers long-term operational costs and improves energy efficiency in data centers.
On-Site Energy Generation and Storage
Colocation facilities in regions with abundant renewable energy sources are better positioned to adopt self-generation technologies, reducing reliance on traditional power sources.
However, storage systems are also necessary to hold excess power during high demand or outages. Battery Energy Storage Systems (BESS) and other storage technologies provide backup power and stabilize costs by mitigating changes in electricity prices.
Renewable energy availability varies by location, making some colocation facilities better suited for self-generation than others.
Infrastructure and Facility Design
Strategic facility design minimizes power waste by optimizing airflow, reducing cooling strain, and improving equipment efficiency. Airflow control, hot and cold aisle containment, and energy-efficient hardware placement reduce cooling needs and energy costs.
Modern facilities also use advanced insulation, optimized rack layouts, and intelligent power distribution systems to supply energy to various areas. They monitor real-time energy demand, which balances power loads and stops overuse.
Moreover, modular layouts enable colocation data centers to adapt infrastructure quickly using prefabricated, easily assembled components. This flexibility allows providers to scale server capacity, enhance cooling, and optimize energy distribution without major facility overhauls.
Power Grid Reliability and Energy Contracts
Renewable energy is one of the methods data centers use to lower their carbon footprint and stabilize long-term energy costs. Many providers secure renewable energy through direct power purchase agreements (PPAs). They also invest in on-site solar and wind power generation.
While these initiatives lower reliance on fossil fuels, they require upfront infrastructure costs, which affect pricing.
Innovation also boosts energy availability. Many companies are turning to the combination of renewables and traditional sources. For instance, battery storage systems or hybrid energy used with traditional power sources improve energy usage.
Location and Regional Energy Tariffs
Energy costs vary based on the colocation data center location. By building in regions with many low-cost renewable energy sources, data centers lower costs.
Areas with favorable energy tariffs or incentives for energy-intensive industries lower operational expenses even more. Since a stable power grid and minimal risk of outages ensure greater reliability, these regions create conditions for less expensive backup systems.
Additionally, regions with colder climates naturally aid in cooling infrastructure, lowering overall energy consumption.
Grid Reliability and Power Redundancy
Colocation data centers rely on dual power feeds to receive electricity from separate sources. During an outage, automatic transfer switches allow seamless switching between these power sources to maintain operations without interruption, ensuring continuous uptime.
The increased frequency of brownouts or blackouts in certain areas leads to more stringent fuel storage, increased maintenance costs, and stricter compliance regulations. These challenges are prevalent in regions where the power grid is less reliable, requiring more robust backup systems and additional monitoring infrastructure.
Environmental Factors
Data center energy consumption fluctuates based on local environmental conditions such as temperature and humidity.
Cool regions lead to lower cooling expenses, but energy consumption rises during heat waves or snowstorms.
High temperatures require extra cooling measures to maintain server temperature standards, which leads to higher energy use.
Backup power for heating systems is necessary during freezing conditions, which subsequently raises overall energy requirements.
How to Calculate Colocation Power Requirements
Planning energy consumption improves efficiency and supports a stable IT environment.
Getting familiar with how to calculate colocation power requirements helps you manage costs, ensure equipment reliability, and avoid downtime.
The following text explains the best ways to calculate colocation power needs.
Assess Power Density Needs
Tracking power usage makes budgeting and scaling infrastructure easier. Rack density is an important factor behind the colocation power needs, and it has increased because of high-performance servers.
In 2020, the average rack density was around 8.4kW, but certain data centers support up to 20kW per rack today.
Higher-density racks require more power and cooling, which impacts costs.
Plan for Scalability
As the infrastructure expands, so do the power requirements. Therefore, choose a flexible colocation provider for energy capacity adjustments.
Calculate energy requirements by factoring in extra growth capacity so as not to underestimate power consumption as the infrastructure grows. This foresight prevents unplanned power shortages and expensive upgrades.
Measure Power Draw Accurately
Built-in meters on power distribution units (PDUs) help you track real-time power usage and avoid overloading circuits. PDUs distribute power to different equipment in a data center and monitor power consumption for each connected device.
If meters aren't available, check the equipment faceplates for voltage and amperage ratings.
To calculate power consumption, use the following formulas:
- Amps × Volts = Watts. Determines power draw for single-phase equipment.
- Amps × Volts × 1.73. Applies to three-phase power calculations.
- (Amps × Volts × 1.73) × 0.80. Applies the NEC 80% rule to prevent overloading circuits.
These formulas ensure accurate power allocation and help mitigate the risk of failures due to overloading.
Note: The NEC 80% rule suggests using only 80% of a circuit's capacity to avoid overloading and ensure safety.
Account for Backup and Redundancy
When accounting for colocation power needs, consider backup and redundancy. These factors ensure ongoing operation during power disruptions.
To prevent any downtime during primary power failures, ensure backup power can handle the full load of critical devices.
Most colocation facilities provide these uninterruptible power supplies (UPS) and backup generators for critical equipment.
Understand Power Billing Methods
Power billing methods vary between colocation providers. It's crucial to understand how billing works to accurately forecast costs and avoid unexpected fees:
- Flat Rate Billing. Establishes a fixed monthly amount for a set amount of power usage, regardless of actual consumption.
- Metered Billing. Charges based on actual power usage, so the cost depends on how much power the equipment consumes.
- Allocated Billing. Sets a prearranged amount of power per month, and you are billed for that fixed amount.
Understanding your billing method helps calculate the true cost of powering your equipment, ensuring you choose the most cost-effective solution for your needs.
Account for Cooling Needs
Factor in cooling requirements to ensure accurate colocation power requirements. Cooling systems prevent your equipment from overheating, which lead prevents any damage or failure.
Colocation providers often integrate cooling solutions with power systems to ensure they work efficiently together.
Keep in mind that as power density increases, cooling demands also rise, further impacting infrastructure costs.
Conclusion
This article explained how companies could learn about colocation power requirements. It also elaborated on different factors that influence these needs and ways to calculate them.
Next, read about the differences between colocation and cloud and how to pick the best option based on your business needs.
