The rise of Artificial Intelligence (AI) is propelling technological progress and economic growth at an unprecedented rate, becoming the core driving force of a new round of technological revolution worldwide. However, behind this prosperous scene lies an undeniable reality: the sharply increasing power demand is posing a severe challenge to the existing power systems.
Let's look at a set of data: On December 19th, experts from Finansvalp Bank, by analyzing the electricity price data from the European Union's statistical office for the second half of 2023, listed the European countries with the highest electricity prices. As expected, Germany tops the list with an electricity cost of €416.20 per megawatt-hour, while Ireland, known as the Silicon Valley of Europe, ranks third in Europe with an electricity cost of €374.60 per megawatt-hour, 52% higher than the European average. The Associated Press points out that the reason for high electricity prices in Ireland is the surge of numerous data centers under the AI wave. According to data from the Central Statistics Office of Ireland, these massive buildings and powerful computers consumed 21% of Ireland's total electricity last year, a figure that was only 5% in 2015, and it is projected to reach 27% by 2028.
Taking Google search as an example, a single query requires approximately 0.3 watt-hours (Wh), while the increasingly popular ChatGPT consumes 2.9 watt-hours of electricity, on average. This means that processing a ChatGPT query requires nearly 10 times the amount of electricity needed for a Google search.
Recently, the renowned consulting firm Gartner issued a warning in its latest survey report, predicting that by 2027, 40% of existing AI data centers will face operational difficulties due to insufficient power supply. Meanwhile, the research department of Goldman Sachs, in a recent report, deeply analyzed the impact of the surge in electricity demand on the United States, Europe, and the global scale, pointing out that one of the reasons is the continuous improvement in the energy efficiency of data centers.
Ireland, a Western European country with an area of only 70,000 square kilometers and a population of less than 5 million, has seen a rapid development of data centers and a significant increase in electricity consumption. According to public data, as of April 2024, Ireland has 82 data centers, with another 14 under construction and 40 more approved for planning. Among them, Amazon, Facebook, Google, and Microsoft account for 26 and hold 77% of Ireland's data center storage capacity. One of the reasons these tech giants choose Ireland is its favorable tax environment; Ireland's corporate tax rate of 12.5% is one of the lowest in Europe. On the other hand, Ireland has a natural advantage in building data centers. The country's high latitude ensures a pleasant climate throughout the year, with temperatures ranging from 6 to 20 degrees Celsius. The low temperatures make it easier to prevent data center computers from overheating without inhaling too much water, which also helps with the operation and maintenance of data centers.
However, the rapid development of AI has brought unexpected problems to Ireland. In addition to high electricity costs, the Environmental Protection Agency of Ireland is also concerned about the nitrogen oxide pollution generated by on-site generators of data centers, which are usually gas turbines or diesel turbines.
On November 6th, China's Ministry of Industry and Information Technology released a "New Type of Energy Storage Manufacturing Industry High-Quality Development Action Plan (Draft for Comments)" and sought public comments. It mentioned that new energy storage should be promoted for users with high requirements for power supply reliability, power quality, and large electricity consumption, such as data centers, intelligent computing centers, communication stations, industrial parks, industrial and commercial enterprises, and highway service areas.
At the same time, it encourages and supports users with large electricity consumption, such as data centers, to configure new energy storage systems. Through policy guidance and financial support, it promotes the application and development of new energy storage technologies. It also supports the construction of a batch of demonstration projects combining new energy storage with data centers, verifying the technical feasibility and economic viability through practical application, accumulating experience, and promoting successful cases.
The huge electricity demand of data centers has greatly increased the demand for energy storage products. As a key infrastructure, data centers need to ensure uninterrupted operation 24 hours a day. Data centers are the infrastructure for data storage and processing, and their safety is crucial. In recent years, data center fires worldwide have caused huge economic losses and seriously threatened personal safety. The most recent case was the explosion of lithium batteries in Alibaba Cloud's Singapore data center, which led to serious interruptions in services hosted by major technology companies, including Lazada and ByteDance. Due to the high safety requirements of data centers, when considering new energy storage, special attention must be paid to the high safety of energy storage technology. Flow battery energy storage technology, with its inherent safety and long-term energy storage advantages, is the best option for data centers to store energy.
Flow batteries use aqueous electrolytes, which fundamentally eliminate explosion risks and can serve as backup power in the event of power grid failures or power outages, ensuring the safe and continuous operation of key data center equipment, preventing data loss and business interruptions. Another innovative breakthrough in the field of flow battery technology is the iron-sulfur flow battery, whose electrolyte cost is only one-tenth of vanadium. It utilizes the economic advantages of iron and sulfur to significantly reduce costs and can achieve charging and discharging capabilities covering 6-12 hours, spanning days, months, and even seasons, providing excellent flexibility and adaptability, thereby reducing the need for new equipment and investment.
In addition, for high-safety-level places like data centers, the key is stable electricity use, and on this basis, energy saving, carbon reduction, and peak shaving and valley filling are carried out. By using energy storage systems in conjunction with new energy, fluctuations in new energy can be smoothed out, providing stable and lasting electricity for data centers, effectively alleviating grid congestion, and improving the efficiency of grid equipment use through precise regulation of power supply and demand balance. The electricity load of data centers has peak and valley differences, and energy storage systems have the role of peak shaving and valley filling, participating in power market peak regulation and auxiliary frequency modulation, from which data centers can benefit. At the same time, energy storage systems can improve the utilization rate of new energy, storing new energy to reduce the carbon emissions of data centers. With the continuous reduction of energy storage system costs and the industrial development of energy storage products for data centers, it is believed that energy storage for data centers will have an increasingly broad application prospect.
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