Rising energy costs erode competitive advantage of colocation data center operators

Temporary power generation equipment manufacturer Aggreko’s study highlights the cost of rising energy costs to colocation data center operators

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Caroline Donnelly, Data Center Edit

Published: August 16, 2022 Sun 14:45



from the UK and Data centre operators in Ireland have made public the financial challenges their businesses face

In a survey of 253 data centre professionals from the UK and Ireland commissioned by Aggreko, More than 60% say their electricity bills have risen over the past three years, up to 40%, while 3% of UK respondents report that prices have risen by more than 50%.

As a result, more than half of UK respondents to the poll (57%) said electricity now accounts for 10% to 30% of their total operating costs, w another 25% said they paid “much more” than that amount.

“Over the next six months, most people expect to pay similar fees, although those who say they expect to pay 40% or more increase,” Aggreko said in his accompanying statement. Attached 21 pages Power Struggle – Data Center Report. “Over a 12-month period, the majority again expected to pay between 10% and 30%, but again those choosing one of the higher tiers increased. This gradual shift suggests a lack of confidence in the energy market in the short-term , most expect more pressure on balance sheets.”

Meanwhile, 63% of Republic of Ireland participants (RoI ) said electricity accounted for 40% of their total operating costs. The report goes on to say that the UK data centre market is suffering more than the return on investment.

“58% said that rising energy bills over the past two years had a ‘significant impact’ on their profit margins. In ROI, the results were in the ‘minor’ The distribution between impact and “significant” impact is more even, at 47% and 49%, respectively. That is, only 4% of respondents in both markets reported no change.”

Survey respondents mostly work in colocation companies with at least 100 to 2,000 employees, with Billy Durie, head of the global Aggreko data center division, saying it is currently possible It is the smaller players feeling the pinch from rising energy costs.

“Seeing data centers feel the pinch,” he said. “As a high energy user, rising prices will undoubtedly make it harder for small facilities to remain competitive, and our survey shows just that.”

The report also comes after several months of rising energy The cost of the post-release was cited as one reason the hosting provider’s UK subsidiary Sungard AS fell into administration.

The report also highlights the actions operators are taking to mitigate the impact of high electricity prices on their business, with over 70% of UK respondents claiming the situation makes it harder for them

These actions include installing more energy efficient heating and lighting systems and participating in demand-side response programs to reduce the amount of energy their sites consume

at this point , more than 70% of UK companies surveyed listed energy security as a concern, which the report said was not an unfounded concern, as 65% said they had experienced electricity supply in the past 18 months at different times. Time points were cut.

In terms of ROI respondents were concerned about, 80% said they were concerned about power continuity, with 60% having experienced a power outage. “In this group, many reported having to reduce or suspend operations while addressing outages,” the report said.

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Caroline Donnelly