Is the Internet causing an energy crisis?

Heavy Internet surfing could be contributing to America's fuel drain. Is it overstated or will we need to change our lives to confront the problem?

By Robert Bryce Special To  Interactive Week December 18, 2000 5:01 AM PT   In late September, while on the stump in Michigan, George W. Bush outlined his energy plan for America. More domestic oil drilling was needed, he told the crowd, because the country's energy needs far exceed its current production. We also need more renewable energy and more electric power because, he said, "today, the equipment needed to power the Internet consumes 8 percent of all the electricity produced in the United States." Bush isn't the only one to use the 8 percent figure. Over the last 18 months, that estimate - first published in a May 31, 1999, article in Forbes by Peter Huber and Mark Mills - has appeared in reports issued by investment banks, in energy projections issued by natural gas companies, and in numerous magazines and newspapers. But is it, in fact, an accurate reflection of reality present and future? PCs behind shortages? Questions about the Internet and electricity usage gained velocity this fall, after tech guru George Gilder and the Energy Information Administration both weighed in on the topic. In September, Bambi Francisco at CBS' MarketWatch.com reported that Gilder was predicting the Internet would "eventually use as much electricity as the entire U.S. economy does today." In late November, the EIA significantly increased its projections for future electricity usage and named computers as a cause. Meanwhile, California continues to be rocked by serious electricity shortages. On Dec. 7, the state declared a Stage 3 emergency, meaning that residential and commercial users could face rolling blackouts. On Dec. 13, the power shortage became so severe that U.S. Energy Secretary Bill Richardson threatened to hit out-of-state power producers with federal price controls if they didn't begin shipping more electricity to California immediately. Richardson also ordered federal hydroelectric networks to boost power generation. His moves helped the state avert widespread blackouts, but the long-term prospects for California's electric power system are unclear. These predictions and events have helped fuel a surge in the prices of once-stolid electric utility stocks. They have also contributed to the widespread belief that the Internet is causing big increases in domestic electricity usage. And while evidence supports that belief, it's not yet certain that the Internet is causing or will cause Americans to use vast amounts of additional electric power. Conflicting estimates There's another problem: Huber and Mills' 8 percent estimate appears to be wrong. All office, telecommunications and network equipment in the country actually uses about 3 percent of the power consumed in the U.S., said a group of staff scientists at Lawrence Berkeley National Laboratory. That analysis is supported by Steven Taub, an associate director at Cambridge Energy Research Associates, an energy consulting firm in Cambridge, Mass. The Lawrence Berkeley scientists are "much closer to right," Taub said. Questions about the Internet and electricity consumption are part of a broader debate over global warming. If Huber and Mills are right, the Internet's expansion is contributing to the warming of the planet and is therefore damaging the environment. If their critics are right and the Net is lowering the quantity of power needed to keep the economy humming along, it should be having a positive impact on the environment. Despite the attack on their estimate, Huber and Mills have refused to back off their 8 percent figure, triggering a rancorous debate over their motives, methods and credentials. Not surprisingly, the debate is suffused with politics: Huber and Mills are free-market conservatives who argue that the solution to looming electricity shortages is to build more big power plants. Their critics, generally speaking, are left-leaning energy analysts who favor distributed generation plants, higher-efficiency products and renewable energy programs, while opposing big new power plants. Increased use of the Internet, these critics argue, is increasing productivity and significantly reducing the nation's "energy intensity" - the amount of power needed to produce goods and services. Quantity vs. quality Even if Huber, Mills and gilder are wrong about the quantity of power used by the Net, the debate they have spawned is long overdue, and the issues they raise are crucial for the Internet and those who use it. The nation's aging power grid is sagging under the strain of surging economic growth and the need for more reliable power. According to the Electric Power Research Institute, America's generating capacity has grown 30 percent over the past decade, but its transmission capacity grew just 15 percent. EPRI predicted that over the next 10 years generation will grow another 20 percent, but the infrastructure needed to deliver that power will grow by just 4 percent. Nowhere are the problems of generation and transmission more evident than in California. "It's a dire situation," said Michelle Montague-Bruno, a spokeswoman at the Silicon Valley Manufacturing Group, which represents 190 companies in the region. To save power, members are turning off nonessential equipment, including some lights and computers. Electricity became a key issue for the group in June, when Pacific Gas & Electric was forced to cut power to about 100,000 customers after managers of California's power system warned that the San Francisco Bay area's power grid was near collapse. Those problems continued into December, when the problem was exacerbated by cold weather, power plants idled for maintenance and a shortage of electricity that can be imported. "There's a perception that the high-tech industry is responsible for the boom in power consumption. That's not necessarily accurate," Montague-Bruno said. "It's due to the boom in construction and the overall growth in the economy and population in California." Since 1998, California has licensed eight new power plants. But that new power won't begin coming online until next summer, which means the state's electricity woes are likely to continue for many months to come. Some companies have begun to look more closely at on-site generating equipment, including gas-fired turbines and fuel cells. Those technologies could be implemented at far lower cost than centralized power plants, and would obviate the need for big investments in new high-power transmission lines. In addition, on-site generation is more efficient - when electricity is transported long distances, significant amounts of power are lost due to resistance from the wires themselves. Confusing power picture Deregulation was supposed to lead to cheaper, more reliable power. But so far, deregulation, now under way in California and about two dozen other states, has only confused the nation's power picture. And all types of businesses -- from manufacturers to dot-coms -- are being forced to deal with questions about the availability, reliability and quality of electricity. America's power grid was "built on a 1950s and 1960s design that doesn't address the type of reliability that we need," said Karl Stahlkopf, vice president of power delivery at EPRI. Stahlkopf, too, believes that Huber and Mills overstated the amount of power used by the Net. But he argued that much of the debate is over the wrong issue. Yes, the quantity of power used by the Net is important. But Stahlkopf said Huber and Mills have been prescient in their discussion of the reliability issue, which may be a longer-term problem than questions about availability. "The nature of power usage in America is changing, because all silicon-based equipment needs absolutely reliable power," he said. EPRI estimates that power interruptions - some lasting just one-sixtieth of a second - are costing American businesses some $50 billion each year. Sun Microsystems has estimated each minute of power outage costs it $1 million, Stahlkopf said. Power quality has become a white-hot topic in boardrooms and on Wall Street. Recent initial public offerings for flywheel-based uninterruptible power supply companies, such as Active Power and Beacon Power, and fuel cell makers, such as H Power and Proton Energy Systems, raised hundreds of millions of dollars. Companies of all kinds are spending billions of dollars per year on technologies, ranging from batteries and flywheels to diesel engines, to assure a constant flow of power to their factories, clean rooms and data centers. But that reliability has a cost: Much of the equipment consumes more electric power, which Mills said supports his contention that the Internet will increase power consumption. "I don't believe for a second that electric power demand is going down," Mills said. "It hasn't for 100 years, and it won't go down now." So, who's right? In the debate over power demand and the Internet, data centers are often exhibit No. 1. These facilities, also known as "server farms" or "telco hotels," consume vast amounts of electricity. With power concentrations of 100 watts per square foot, a 10,000-square-foot data center can demand as much power as 1,000 homes. But unlike homeowners who turn their lights off when they leave for vacation, data centers require full power 24/7. In Seattle, a raft of new data centers is forcing the city to scramble to meet their needs. Over the next 24 months, the city's utility company expects a handful of data centers to raise its average daily demand by about 250 megawatts, an increase of nearly 25 percent over current loads. Other regions, including the San Francisco Bay and Chicago areas, are also facing power supply problems caused, in part, by data centers. Little doubt remains that electricity usage is rising. Until recently, the EIA was projecting that domestic power demand would rise 1.3 percent through 2020. But in late November, the agency increased its forecast by 38 percent, to an annual growth rate of 1.8 percent, citing higher-than-projected economic growth and a "re-evaluation of the potential for growth in electricity use for a variety of residential and commercial appliances and equipment, including personal computers." Although the EIA listed computers as a possible reason for the increase, economists and energy analysts cannot say with certainty why electricity usage is increasing, how fast it will grow or even the best way to meet that new demand. Nor is it clear how much of that growth is caused by Internet-related facilities, such as data centers. Wealth effect Some experts, like Taub, believe that much of the growth is the result of the "wealth effect." Americans are making more money, so they are buying more gadgets that use electricity. In addition, people are buying bigger houses that require more lighting, air conditioning and other comforts that require lots of power. And as the American economy grows, more companies are launched, more stores and offices are built and, thus, more electricity is consumed. Mills agreed that the wealth effect plays a role, but he firmly believes data centers will increase consumption. "When we get tens of millions of square feet of data centers, the power supply problem is going to be more acute," Mills predicted. In fact, the two sides find some common ground when it comes to power consumption by data centers. Jonathan Koomey, a staff scientist at Lawrence Berkeley, has calculated that by 2005, data centers could be consuming slightly more than 1 percent of all electricity in the U.S. Koomey based his projection on a report written earlier this year by Richard Juarez, a senior Internet analyst at Robertson Stephens, who predicted that 50 million square feet of data centers would be online by that time. Juarez's estimate may be conservative. On Dec. 12, IBM Chairman and Chief Executive Lou Gerstner announced that Big Blue will build 50 new data centers to meet the growing demand for the outsourcing of information technology services. -- Anonymous, December 20, 2000 Answers What did I tell you guys about California energy policy last year? Their troubles are of their own making. -- Anonymous, December 20, 2000 You know, if I ever design any forum software that allows html tags, I'm going to include a scan of each post for open tags, and add a close for any left open when the post is made. -- Anonymous, December 20, 2000 OFF?? -- Anonymous, December 20, 2000 -- Anonymous, December 20, 2000 Can I give it a try? -- Anonymous, December 20, 2000 Hopefully I got it right this time... (And in the right thread :( -- Anonymous, December 20, 2000 I tried too... -- Anonymous, December 20, 2000 Maybe we will be spending the rest of our lives trying to fix this thread :-D It's fun trying to figure it out though! -- Anonymous, December 20, 2000

Enough is enough :-D

I'm going to quit trying if this doesn't work.

-- Anonymous, December 20, 2000