Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Kind of ironic perhaps that we are talking about the
power going out today in parts of northern Colorado. Given
our next guest, uh sarp oz Can, which is one
of the coolest names I've ever heard, is the director
of Energy Analysis at Inverus Market Intelligence. So they're they're
a firm that does all kinds of data analysis and
(00:22):
consulting and so on on energy markets, E n V
E r US, sarp Welcome to Koway. It's very good
to have you here.
Speaker 2 (00:31):
Thanks Ross for having me back on again.
Speaker 3 (00:33):
I gotta I gotta ask you.
Speaker 1 (00:34):
I don't know if I asked previously, but sarp oz
Can is one of the coolest names ever. Where is
that name from. I really have no idea. I'm thinking
like Armenia or something. I have no idea.
Speaker 2 (00:47):
Originally Turkish, Shross.
Speaker 3 (00:49):
Okay, not far. I wasn't that far far. You're you're
very close, very very close. Okay. What I would like
to talk with you primarily.
Speaker 1 (00:55):
About today is data centers. It's a huge issue everywhere.
Electricity use, which we're going to talk about, water use, space,
you know, the land use. I mean, there's a big
data center actually going up in Denver, and there's a
little bit of controversy about that. I heard a lot,
you know, you hear a lot of stories that try
(01:17):
to play up the use of data. And I'm not
saying they're overstating it, but I would like you to
explain in a way that we can all understand the
scale the scope of electricity requirements of data centers.
Speaker 3 (01:33):
Yeah.
Speaker 2 (01:33):
Absolutely so. Data centers are absolute power bustlers, and it's
the most important input into their processes. And to put
it in context, one megaalot of power can go to
power about eight hundred homes.
Speaker 3 (01:52):
Let's say small data.
Speaker 2 (01:54):
Centers today are about one hundred megaalots, so we're thinking
about eight and in a lot of cases ease can
go up to a gig a lot so times ten,
So there's a lot of power. And to also add
to that, these things are using power twenty four to seven,
so it's not like a home where we sometimes go
(02:16):
to sleep. Data centers don't sleep either, So it's a
very very steady demand on the grid that's enough to
power whole cities.
Speaker 1 (02:27):
Okay, I think the way that a lot of people
think that food comes from supermarkets, many people think that
power comes from those little holes in.
Speaker 3 (02:39):
The wall and I'm not being sarcastic.
Speaker 1 (02:41):
What I mean is I think that most people think
that it doesn't matter how many people have, how many
things plugged into, how many holes in the wall, there's
always going to be enough power, which might be true
in big cities before there's any data centers maybe, but
even that might not be true, like when everybody's trying
to run conditioning at the same time. So in that context,
(03:03):
what is the risk posed to existing electricity infrastructure by
the addition of a data center to an area.
Speaker 2 (03:12):
Well, first of all, we have to consider that we're
talking about the biggest machine on earth. The grid is
actually the biggest machine on Earth, and it's a very
very old and rickety one that we work off in
the United States today, and that machine needs to be
in a place where it's balancing the supply and the
demand at all points in time, at all locations. It's
(03:35):
a wonder that it even works the way it does
as well as it does today. So when you start
to add these very very large demand centers onto a
grid that hasn't seen an increase in demand for decades
in the past and is now experiencing this huge increase
in power, pool from its infrastructure. It certainly caused some
(04:00):
reliability issues, and that's why utilities need to spend the
money to upgrade their systems so that the reliability for
both the data center as well as all of us
remains stable.
Speaker 1 (04:15):
So if a utility needs to upgrade, either to support
reliability or to just support basic demand levels, doesn't that
mean then that I, as a rate payer, will be
paying somewhere between a lot more in a hell of
a lot more.
Speaker 3 (04:35):
That's absolutely right.
Speaker 2 (04:37):
So what utilities need to do is to recover their
costs from US consumers at a rate that is set
by their regulators, and the regulators approve the spending that
they need to do for these upgrades, and that those
upgrades are recovered through all of our rates and other
(05:00):
people's rates, including the data including.
Speaker 3 (05:02):
The data center. Right.
Speaker 1 (05:03):
So, there are some places, some utilities, maybe some state
government's passing laws about this, that are trying to make
sure that the burden of these higher costs actually go
to the data center, right, And they're trying to make
sure that the data center pays for some stuff upfront,
pays you know, as they're going for the electricity, and
has some kind of contract where if the data center
(05:25):
like closes down, that they still owe money for a while, right.
Speaker 2 (05:29):
That's absolutely right, And this is to make sure that
there is an equitable way that we pay for it
versus what the data center pays for their portion of
the upgrades. And these rates are ensuring that they have
a longer term contract, usually a decade or more. There's
(05:49):
a ramp up period so not all the demand is
imposed on the grid at one time. Making sure reliability
is safe for everybody.
Speaker 3 (05:58):
Else utilizing the grip.
Speaker 2 (06:00):
It requires that they have to pay all of those
costs back even if they don't use the power or
they decide to exit the area, and it requires a
lot more collateral as well as cash up front for
the what meant that's going to be used, so we
don't have stranded costs that then end up being recovered
from others that are not the data center we're targeting.
Speaker 1 (06:21):
We're talking with starpos Can, director of Energy analysis at
Inverus Market Intelligence. STARp if you were king, would you
I don't even know if it is possible, but would
you say that any data center greater than with greater
than an x number of megawatts or gigawatts or whatever,
(06:44):
power requirement needs to have its own dedicated power supply
and maybe not even be on the grid at all.
Speaker 2 (06:51):
Well, today we're seeing that a lot of data centers
are already doing that themselves, just due to the fact
that there's not a lot of ability to connect to
the grid and have that grid be able to support
you with the generation on the grid, and it takes
a period of time to be able to connect new
generations to the grid. That can take between three and
ten years and different jurisdictions, and these data centers don't
(07:13):
have the time to wait around for that, So what
they're doing is taking their generation behind the meter. So
that's why we're hearing about a lot more of these
projects having and sporting their own power needs through behind
the meter natural gas, fire power plants, battery, energy storage,
some solar, or a mix of all of those different generations.
Speaker 1 (07:33):
So if I can just reword what you said, just
to make sure I understand it, Such and such data
center would like to have its own small modular nuclear
reactor powering all its needs. But if they're lucky, they
will have that in five years or whatever some number.
But they want to open the data center next year
and therefore, their only source of power is the current grid,
(07:55):
So they got to do that, even if they're going
to transition later.
Speaker 3 (07:58):
Is that right or not?
Speaker 2 (08:00):
Or once the other way around that?
Speaker 3 (08:03):
Oh, go ahead, go ahead, it's the other way around.
Speaker 2 (08:07):
Actually, they would rather have their small module reactor on
site because they might not be able to get the
power off of the grid because that grid needs to
add that new generation on site and upgrade to get
it to them today. So they might choose to build
it on site now and then connect to the grid later.
Speaker 1 (08:24):
Okay, I get that, But my question was if they
were going to choose to build an SMR on site now,
can they build an SMR quick enough that they could
open the data center when they want.
Speaker 3 (08:35):
That was the point I was making.
Speaker 1 (08:36):
Even if they want an SMR, they're going to have
to go get the regular power first because it's going
to take too long to get the SMR built.
Speaker 3 (08:43):
That's absolutely right.
Speaker 2 (08:44):
SMRs are already still a technology that's in nascent stages
of starting to come up the curve of cost. There's
not a lot of them in production today.
Speaker 3 (08:55):
Today.
Speaker 2 (08:55):
They're looking at more of the ready technologies like natural gas,
fire power, power plans turbines UH and other things like
battery energy stored solar diesel power generators for for backup,
et cetera. SMRs still have a little while to go before.
Speaker 3 (09:13):
I we can't get any of that on site.
Speaker 1 (09:15):
This is an issue that's not going to go away,
so we'll definitely have you back and talk about it more.
Sarpos Can, Director of Energy Analysis at Inverus Market Intelligence
E n V E r US dot com.
Speaker 3 (09:25):
Thanks Sar, good to talk to you again. Thank you.
Ross all right,
Kind of ironic perhaps that we are talking about the
power going out today in parts of northern Colorado. Given
our next guest, uh sarp oz Can, which is one
of the coolest names I've ever heard, is the director
of Energy Analysis at Inverus Market Intelligence. So they're they're
a firm that does all kinds of data analysis and
(00:22):
consulting and so on on energy markets, E n V
E r US, sarp Welcome to Koway. It's very good
to have you here.
Speaker 2 (00:31):
Thanks Ross for having me back on again.
Speaker 3 (00:33):
I gotta I gotta ask you.
Speaker 1 (00:34):
I don't know if I asked previously, but sarp oz
Can is one of the coolest names ever. Where is
that name from. I really have no idea. I'm thinking
like Armenia or something. I have no idea.
Speaker 2 (00:47):
Originally Turkish, Shross.
Speaker 3 (00:49):
Okay, not far. I wasn't that far far. You're you're
very close, very very close. Okay. What I would like
to talk with you primarily.
Speaker 1 (00:55):
About today is data centers. It's a huge issue everywhere.
Electricity use, which we're going to talk about, water use, space,
you know, the land use. I mean, there's a big
data center actually going up in Denver, and there's a
little bit of controversy about that. I heard a lot,
you know, you hear a lot of stories that try
(01:17):
to play up the use of data. And I'm not
saying they're overstating it, but I would like you to
explain in a way that we can all understand the
scale the scope of electricity requirements of data centers.
Speaker 3 (01:33):
Yeah.
Speaker 2 (01:33):
Absolutely so. Data centers are absolute power bustlers, and it's
the most important input into their processes. And to put
it in context, one megaalot of power can go to
power about eight hundred homes.
Speaker 3 (01:52):
Let's say small data.
Speaker 2 (01:54):
Centers today are about one hundred megaalots, so we're thinking
about eight and in a lot of cases ease can
go up to a gig a lot so times ten,
So there's a lot of power. And to also add
to that, these things are using power twenty four to seven,
so it's not like a home where we sometimes go
(02:16):
to sleep. Data centers don't sleep either, So it's a
very very steady demand on the grid that's enough to
power whole cities.
Speaker 1 (02:27):
Okay, I think the way that a lot of people
think that food comes from supermarkets, many people think that
power comes from those little holes in.
Speaker 3 (02:39):
The wall and I'm not being sarcastic.
Speaker 1 (02:41):
What I mean is I think that most people think
that it doesn't matter how many people have, how many
things plugged into, how many holes in the wall, there's
always going to be enough power, which might be true
in big cities before there's any data centers maybe, but
even that might not be true, like when everybody's trying
to run conditioning at the same time. So in that context,
(03:03):
what is the risk posed to existing electricity infrastructure by
the addition of a data center to an area.
Speaker 2 (03:12):
Well, first of all, we have to consider that we're
talking about the biggest machine on earth. The grid is
actually the biggest machine on Earth, and it's a very
very old and rickety one that we work off in
the United States today, and that machine needs to be
in a place where it's balancing the supply and the
demand at all points in time, at all locations. It's
(03:35):
a wonder that it even works the way it does
as well as it does today. So when you start
to add these very very large demand centers onto a
grid that hasn't seen an increase in demand for decades
in the past and is now experiencing this huge increase
in power, pool from its infrastructure. It certainly caused some
(04:00):
reliability issues, and that's why utilities need to spend the
money to upgrade their systems so that the reliability for
both the data center as well as all of us
remains stable.
Speaker 1 (04:15):
So if a utility needs to upgrade, either to support
reliability or to just support basic demand levels, doesn't that
mean then that I, as a rate payer, will be
paying somewhere between a lot more in a hell of
a lot more.
Speaker 3 (04:35):
That's absolutely right.
Speaker 2 (04:37):
So what utilities need to do is to recover their
costs from US consumers at a rate that is set
by their regulators, and the regulators approve the spending that
they need to do for these upgrades, and that those
upgrades are recovered through all of our rates and other
(05:00):
people's rates, including the data including.
Speaker 3 (05:02):
The data center. Right.
Speaker 1 (05:03):
So, there are some places, some utilities, maybe some state
government's passing laws about this, that are trying to make
sure that the burden of these higher costs actually go
to the data center, right, And they're trying to make
sure that the data center pays for some stuff upfront,
pays you know, as they're going for the electricity, and
has some kind of contract where if the data center
(05:25):
like closes down, that they still owe money for a while, right.
Speaker 2 (05:29):
That's absolutely right, And this is to make sure that
there is an equitable way that we pay for it
versus what the data center pays for their portion of
the upgrades. And these rates are ensuring that they have
a longer term contract, usually a decade or more. There's
(05:49):
a ramp up period so not all the demand is
imposed on the grid at one time. Making sure reliability
is safe for everybody.
Speaker 3 (05:58):
Else utilizing the grip.
Speaker 2 (06:00):
It requires that they have to pay all of those
costs back even if they don't use the power or
they decide to exit the area, and it requires a
lot more collateral as well as cash up front for
the what meant that's going to be used, so we
don't have stranded costs that then end up being recovered
from others that are not the data center we're targeting.
Speaker 1 (06:21):
We're talking with starpos Can, director of Energy analysis at
Inverus Market Intelligence. STARp if you were king, would you
I don't even know if it is possible, but would
you say that any data center greater than with greater
than an x number of megawatts or gigawatts or whatever,
(06:44):
power requirement needs to have its own dedicated power supply
and maybe not even be on the grid at all.
Speaker 2 (06:51):
Well, today we're seeing that a lot of data centers
are already doing that themselves, just due to the fact
that there's not a lot of ability to connect to
the grid and have that grid be able to support
you with the generation on the grid, and it takes
a period of time to be able to connect new
generations to the grid. That can take between three and
ten years and different jurisdictions, and these data centers don't
(07:13):
have the time to wait around for that, So what
they're doing is taking their generation behind the meter. So
that's why we're hearing about a lot more of these
projects having and sporting their own power needs through behind
the meter natural gas, fire power plants, battery, energy storage,
some solar, or a mix of all of those different generations.
Speaker 1 (07:33):
So if I can just reword what you said, just
to make sure I understand it, Such and such data
center would like to have its own small modular nuclear
reactor powering all its needs. But if they're lucky, they
will have that in five years or whatever some number.
But they want to open the data center next year
and therefore, their only source of power is the current grid,
(07:55):
So they got to do that, even if they're going
to transition later.
Speaker 3 (07:58):
Is that right or not?
Speaker 2 (08:00):
Or once the other way around that?
Speaker 3 (08:03):
Oh, go ahead, go ahead, it's the other way around.
Speaker 2 (08:07):
Actually, they would rather have their small module reactor on
site because they might not be able to get the
power off of the grid because that grid needs to
add that new generation on site and upgrade to get
it to them today. So they might choose to build
it on site now and then connect to the grid later.
Speaker 1 (08:24):
Okay, I get that, But my question was if they
were going to choose to build an SMR on site now,
can they build an SMR quick enough that they could
open the data center when they want.
Speaker 3 (08:35):
That was the point I was making.
Speaker 1 (08:36):
Even if they want an SMR, they're going to have
to go get the regular power first because it's going
to take too long to get the SMR built.
Speaker 3 (08:43):
That's absolutely right.
Speaker 2 (08:44):
SMRs are already still a technology that's in nascent stages
of starting to come up the curve of cost. There's
not a lot of them in production today.
Speaker 3 (08:55):
Today.
Speaker 2 (08:55):
They're looking at more of the ready technologies like natural gas,
fire power, power plans turbines UH and other things like
battery energy stored solar diesel power generators for for backup,
et cetera. SMRs still have a little while to go before.
Speaker 3 (09:13):
I we can't get any of that on site.
Speaker 1 (09:15):
This is an issue that's not going to go away,
so we'll definitely have you back and talk about it more.
Sarpos Can, Director of Energy Analysis at Inverus Market Intelligence
E n V E r US dot com.
Speaker 3 (09:25):
Thanks Sar, good to talk to you again. Thank you.
Ross all right,
The Ross Kaminsky Show News
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