The New Economy
Copper Applications in General Interest Area
The word today is that we are no longer in the industrial age but are rather in something called "the New Economy," one based on information rather than industrial production. Well, maybe so, although Ignazio Visco, chief economist for the Organisation for Economic Co-operation and Development, points out that such a concept might help to explain trends now emerging in economic data, especially in the area of productivity. Without question, until the recent downturn, information communications technologies (ICT) appear to have helped foster the longest period of uninterrupted expansion, productivity growth, low inflation and low unemployment in history.
As the cartoon suggests, however, we are prone to ignore the dependence of the new economy on the "old" (i.e., industrial) economy. Yet, without energy and materials — mainstays of the old economy — computers and the Internet, and with them, the entire new economy, would not exist. As Dale Dougherty, publisher of the O'Reilly Network, put it: "Those of us who build information infrastructure haven't adequately understood how much the new economy depends upon the old economy's infrastructure — on electrical power plants, roads and bridges and even police and military services." And this is where copper enters the picture.
So what exactly does this all have to do with copper? First, a new-economy insider's somewhat grand definition, apparently written before the 1990's dot-coms became dot-bombs:
When we talk about the New Economy, we're talking about a world in which people work with their brains instead of their hands. A world in which communications technology creates global competition — not just for running shoes and laptop computers, but also for bank loans and other services that can't be packed into a crate and shipped. A world in which innovation is more important than mass production. A world in which investment buys new concepts or the means to create them, rather than new machines. A world in which rapid change is a constant. A world at least as different from what came before it as the industrial age was from its agricultural predecessor. A world so different its emergence can only be described as a revolution.
Obviously, the expectations voiced in this definition have not yet and may never be reached, but there definitely is a trend leading to new services rendered by companies using the Internet. While the ICT sector still accounts for a relatively small share of the United States economy—an estimated 8.3% in 2000—it nonetheless contributed to nearly a third of real U.S. economic growth between 1995 and 1999. In 1999 the Internet supported an estimated $300 billion in business-to-business electronic revenues. As recently as September 2000, it was estimated that worldwide spending for ICT products and services would reach $2.6 trillion in 2005. While the full development of the so-called "new economy" may be years, if not decades away, it does represent a potential for short term as well as long-term new copper consumption by both the electric power industry and the telecommunications industry.
Computers and the Internet
ICT involves, first of all, the almost universal adoption of computers and the Internet as tools to conduct old-economy business. Two well-known results of this application are the productivity gains seen at all stages of manufacturing and the emergence of business-to-business e-commerce for everything from the purchase of raw materials and services to the sales and delivery of final product. In fact, e-commerce is rapidly promulgating the new economy on a global scale, and business-to-business e-commerce seems to be the one part of the "dot com" industry that is thriving.
The engine that makes all this progress possible is, of course, the Internet, which is commonly defined as the entire world's telephone system plus a new communications language called the Internet protocol (IP) plus a system of numerical addresses to enable computers find one another. That is, the Net is one part physical, one part informational. It goes without saying that copper is vital to the physical portion of the Internet — wires and such — and along with it, the new economy. But there's more to this story than the need for lots of copper telecom wire.
The many networks that make up today's Internet are linked by installations that are variously called data centers, server farms, web farms or even Internet hotels. Here is where legions of servers, routers, switches, modems and devices that don't even have popular names yet ensure that the system operates as well as it does. A large data center utilizes hundreds of servers, often along with minicomputers, and, in the case of larger installations, even mainframe computers. Some businesses are turning entire offices into warehouses for their communications equipment. And all of that equipment consumes power.
Electrical Energy and the Internet
At the close of 2000, there were an estimated 320 data centers in the United States. As shown in the map, below, the centers are largely clustered in the major metropolitan areas listed in the accompanying table. There are 120 server farms in Silicon Valley alone. Today, data centers range in size from one- or two-floor installations in a modest office building to giants like the one under construction near Seattle that will encompass 576,000 sq ft (53,500 sq m). One reason for the observed growth is the rising number of Wweb servers, from fewer than 20 thousand in 1995 to 4 million in 1999, and to 29 million in June 2001.
Computer-room space in the U.S.A. grew from an estimated 1 million square feet (93,000 sq m) in 1998 to over 17 million square feet (1.6 million sq m) in 2000. In that year, the investment firm, Salomon Smith Barney, (SSB) asked approximately 40 companies about their foreseeable space needs. The response: an anticipated nearly 17.9 million square feet (1.66 million sq m) of computer room space needed by the end of 2001, and 25 million square feet (2.32 million sq m) by 2003. An estimated 10 to 20 million additional square feet were scheduled to be built in 2001, but much of this construction was put on hold as the market adjusted.
|Austin, Texas||New York City, New York|
|Boston, Massachussets||Phoenix, Arizona|
|Chicago, Illinois||San Diego, California|
|Dallas, Texas||San Francisco, California|
|Denver, Colorado||Santa Clara, California|
|Irvine, California||Seattle, Washington|
|Los Angeles, California||Washington D.C./ Northern Virginia|
Data centers can consume 3 to 5 times more electrical power per unit area than the equivalent amount of space in a traditional office building filled with human workers. According the Edison Electric Institute, a typical server farm uses between 25 and 40 watts per square foot (269 and 431 W/m 2) of floor space; in fact, some buildings have been built to handle 100 to 150 W/ft 2 (1076 to 1615 W/m 2). To be precise, these power density numbers refer only to that portion of the building that is occupied by computing and support equipment. Still, and by way of contrast, a traditional office building using 5 W/ft 2 (54 W/m 2) closes at 5:00 PM, whereas a server farm using 40 W/ ft 2 typically operates around the clock. The power consumed by a large, fully occupied server farm can reach the megawatt range, as much as a small airport or four large hospitals.
Projections vary as to how much electrical power all that data crunching will ultimately call for nationwide. A report by Mark Mills, cofounder of the Digital Power Group, a Washington, D.C.- based technology assessment and forecasting organization, made headlines when it stated in the May 1999 issue of Forbes Magazine that the Internet's total annual power consumption had already grown to 290 billion kWh, or an estimated 8% of U.S. electricity consumption. It also stated that, in all likelihood, the Internet is responsible for one-half to two-thirds of the growth in electricity demand. According to Mills, who conducted the study on behalf of the coal industry, for every two megabytes of information moved over the Internet, one pound of coal was burned to generate the electricity energizing the transaction. Ordering a book from Amazon.com or downloading an MP3 music file, for example, translates into a half-pound of coal being burned.
On the other hand, Jonathan Koomey of the Department of Energy's (DOE) Lawrence Berkeley National Laboratory (LBNL) questioned Mills' numbers, saying that the DOE's own surveys of energy consumption for residential, commercial and industrial sectors, which, like Mills' data, include the energy required to manufacture the equipment, indicate that the electricity used for office, telecommunications, and network equipment currently stands at only about 3% of the electricity used in the U.S. A. Likewise, Karl Stahlkoph, vice president of Power Delivery at the Electric Power Research Institute (EPRI), estimates that about 3% of total U.S. energy use goes to ICT and about 1% goes to Internet functions (a total of 4% under Mills' definition). The California Energy Commission has shown that between 1990 and 1999 Silicon Valley's growth in energy consumption has been little more than that for the State as a whole—12% vs. 11%—essentially equivalent to population growth. Joe Romm, a former acting assistant secretary of energy at DOE, made headlines in 1999 when he testified before both the House and the Senate that the Internet is actually saving energy and thereby making the reduction of greenhouse gases ever more practical.
However, during the boom in data center construction, actual requests for power from developers of data centers seemed closer to Mill's projections than others. The Seattle Post Intelligencer reported that data centers requested 445 MW of power in a small area near South Center Mall outside Seattle. And on the East Coast, a July 2000 New York Times article reported that "One developer looking at a site in North Jersey for the home of a potential million-square-foot data and communications center asked Public Service (the local utility) for 100 MW of power-one third of what the utility provides the entire city of Newark." According to the Sacramento Bee, one data center company told the Sacramento Municipal Utility district that it would need 50 to 65 MW of power—roughly the equivalent of all other growth in the area in an average year. And Keith Reed, a senior corporate account manager with Pacific Gas and Electric, has indicated that data center customers in PG&E's territory are forecasting unheard—of leaps in electrical demand. PG&E has reported that data centers requested 341 MW of power in 2000 and an additional 1,000 MW of power by 2003—the equivalent of approximately three new power plants. Aside from projection, each new Exodus Communications, Inc., data center covers 100,000 square feet or more in size. Each uses from 10 to 20 times the energy of an equivalent-sized office building or, according to one analyst, "enough juice to power 100,000 homes."
A proposal by U.S. DataPort envisions building a ten-building complex in San Jose, California, totaling 2.2 million sq ft (204,000 sq m), and consuming 180 MW by 2005. A portion of the 180 MW would be generated by the Company's own power plant. This proposal sparked considerable concern in over California's already strained power grid, particularly when another San Jose data center firm, Cisco Systems, attempted to block the construction of the new power plant in San Jose citing that the city was the home of high-paid tech workers and should not be marred by a power plant. Other server farms have also considered building their own power plants, or are actively dong so. A British computer services company, iXguardian, is building a data-storage facility outside London that will incorporate a gas-fired 24-MW plant. However, enthusiasm for building new generation facilities appears to have subsided in light of the slower-than-expected rise in customer demand.
Power Shortage Internet-Related?
The power shortage problems faced by California in early 2001 underscored the demands brought on by the Internet. "The Internet has had far more of an impact on the (power) grid than we had foreseen," said Justin Bradley, Director of Environmental programs for the Silicon Valley Manufacturing Group, a trade organization. "The promising new economy could be short-circuited unless steps are taken to upgrade California's power grid."
However, hysteria generated by earlier power requests made by the data center industry is clearly beginning to wane. In November 2001, Renewable Energy Policy Project (REPP), a Washington, D.C., think tank, issued its report "Energy Smart Data Centers: Applying Energy Efficient Design and Technology to the Digital Information Sector." This group pointed out that present data centers were grossly over-designed and that significant energy savings were possible. Whereas an average for the industry "nameplate demand estimate" indicated an average of 100 W/ft 2, current "measured demand" was only 35 W/ft 2. They estimated that with efficiency measures taken, this demand could be reduced to from 17 to 28 W/ft 2.
Similarly, in late 2001, EEI formed the Internet Hotel Task Force, the purpose of which is to determine present and future levels of energy consumption in Internet hotels. Its preliminary findings are that while construction of data centers had progressed at high speed from 1995 to 2000, the bursting of the high-tech stock bubble in 2000 and the U.S. economic downturn in 2001 slowed the expansion of data centers considerably. Few existing hotels are currently being used to their full capacity and construction many others have been put on indefinite hold.
PG&E, which had asked for 341 MW for 2000, saw an actual load in November 2001 of only 50 MW. Austin energy, from which server farms requested 100 MW for 2001, had an actual load in November 2001 of but 6 MW. Accordingly, developers now use a realistic 50 W/ft 2 in their design calculations rather than the much higher energy densities they'd requested in the past.
Jonathan Koomey, of Lawrence Berkeley National Laboratories agrees that 50 W/ft 2 is realistic. Thomas Callsen, of Commonwealth Edison in Chicago puts the figure at 40 W/ft 2. In the February 1, 2002, issue of Transmission & Distribution magazine, Callsen concluded that when the actual floor area of a data center occupied by computer equipment and other factors, such as the actual air-conditioning load, are taken into account, the overall power load requirement of such building is more like 40 W/Ft 2 than the 150 W/Ft 2 and up called for by many facility designers.
The bottom line, at least for the present, is that the precise amount of electrical power used by and for the Internet is unknown, but the new economy apparently already accounts for a substantial increment of electrical power use, and that increment will likely grow significantly in the future. And, where there is electrical power, there is a need for copper.
Reliability and Power Quality Important as Well
Yet another (and largely unrecognized) factor in the supply of electrical power to the new economy is power reliability. Here, too, copper is and will be important.
Current power plants deliver power at 99.9% (three-nines) reliability. That's an outage equivalent of about eight hours per year for a typical customer. Hospitals, airports, military bases and computer centers require greater reliability and, therefore, deploy standby generating systems, backing them up in many cases with uninterruptible power supplies (UPS) that utilize standby storage batteries. Several case histories describing copper's role in such installations are found at CDA's Power Quality web site.
However, according to Peter Huber, Co-editor Digital Power Report Magazine (Gilder Technology Group Publication) the requirement for Internet systems starts at six-nines and is moving toward nine-nines reliability — that's 99.9999999% reliability! At that level, interruptions are measured in hundreds of milliseconds — a mere flicker of a light bulb but enough to crash a sophisticated server or router. Attaining this degree of reliability requires the installation of a number of subsidiary devices ranging from diesel generators (three- to five-nines reliability); to superconductor capacitors (six-nines); to battery farms and even large electro-mechanical flywheels. In addition, the industry has adopted an "N+1" policy — install one more unit that design calls for. All of than hardware calls for more copper.
The U.S. Department of Energy has addressed the power reliability problem though its Distributed Energy Resources (DER) program. Because the utilities' power transmission and distribution infrastructures are the weak links in the system, the DER program suggested the creation of "power parks," reservations set aside near critical power consumers for the purpose of providing high-reliability power. The parks include uninterruptible power supplies such as battery farms, ultracapacitors and flywheels. Two have already been established: Delaware Industrial Park in Delaware, Ohio, and the University Research Park adjacent to the University of California, Irvine Campus. A third is under construction to serve McAllen and Mission, Texas. Again, all that electrical hardware calls for copper.
Data centers are not the only entities that demand nine-nines reliability today. EPRI estimates that 10% to 13% of all electricity in the United States needs to be of digital quality to serve not just Internet and ICT needs, but all the embedded microprocessors used for process control in manufacturing, finance and elsewhere. EPRI has two relevant projects underway: One addresses the question of cost recovery when customers have on-site generation capacity. Another calls for a collaborative R&D program in order to provide improvements in the overall transmission, distribution and end-use infrastructure within the power industry. That study seems to point to the wider use of underground lines - where copper offers certain technical advantages.
Communicating Over (and Computing With) Copper
Fiber optic communications cable now conducts the bulk of Internet messaging between telephone company central offices and between central offices and major use centers, yet copper continues to play a vital role in short distance telecommunication, either through ordinary twisted-pair copper telephone lines or improved (and now mandatory), "Category" cable. As Innovations has reported previously in, for example, ( xDSL Technology and The Internet ; The Evolution of Telephone Cable ; xDSL Deployment ), digital subscriber line (DSL) technology, which operates on twisted pair copper cable effectively raises copper cable's bandwidth to levels than can avoid the need for fiber optic cable in many cases.
Another encouraging development from copper's point of view is the growing use of solid-copper core wire in coaxial cable. Core wire was previously made from copper-plated steel on because the high-frequency signals typically carried over coax cable are carried on the conductor skin, making high conductivity throughout unnecessary. The growing popularity of cable modems bring with them a need to carry low-frequency (60 Hz) current on coax lines as well, and manufacturers recommend copper-core coax for the hook-up.
Also, there is copper's emerging use in interconnects, the microscopic "wires" that connect components in a computer chip, that raises the speed of microprocessor and memory chips. Without copper, processing speeds would be limited. The amount of copper used in each chip is small, but it is absolutely essential to meet today's and tomorrow's Internet requirements.
Projections for the number of data centers needed in the future have been scaled back, but once the new economy regains its momentum, it will almost certainly call for a larger and more reliable power generation and distribution infrastructure, and that will call for copper. The threat to copper posed by large-scale conversion to fiber optic cable has long since been realized, yet copper use continues to grow for category cable and improved coaxial cable.
How much copper will ultimately be needed to fulfill the future Internet-driven need is impossible to predict, but the Copper Development Association Inc. estimates that there are about 2,000 pounds (907 kg) of copper installed per megawatt of power plant capacity. As use of the Internet continues to grow, copper consumption will inevitably follow.
Mills, Mark P., The Internet Begins with Coal — a preliminary exploration of the impact of the Internet on electricity consumption, The Greening Earth Society, May 1999.
Mills, Mark and Peter Huber, "Dig more coal-the PCs are coming," Forbes Magazine, May 31, 1999.
Mills, Mark, Kooto and the Internet: The Energy Implications of the Digital Economy, testimony before the U. S, House of Representatives, Subcommittee on National Economic Growth, Natural Resources and Regulatory Affairs, February 2, 2000.
Mitchell-Jackson, Jennifer D., Energy Needs in an Internet Economy: A Closer Look at Data Centers, Thesis for MS degree, Energy and Resources Group of the University of California, Berkeley, July 10, 2001.
Dennis McCafferty, Power Play, USA Weekend, Gannett Co., July 6-8, 2001
Lazarus, David, "Net Complex a Dilemma for San Jose," San Francisco Chronicle, March 22, 2001. Proposed U.S. Dataport compound of 10 buildings.
Mahedy, Stephen and Dan Cummins and Danny Joe. "Internet Data Centers: If Built…Will They Come," Salomon Smith Barney Report, August 3, 2000.
Yankee Group, "Executive Summary of The U.S. Collocation Market: High-Tech Real Estate Heats Up," 2000, www.yankeegroup.com.
Cook, John, "Internet data gain is a major power drain on local utilities," Seattle Post Intelligencer, September 5, 2000.
Feeder, Barnaby, "Digital Economy's Demand for Steady Power Strains Utilities," New York Times, July 2, 2000.
Peyton, Carrie, "Data servers crave power: High-tech electricity needs amplify crisis," The Sacramento Bee, November 26, 2000.
Energy Solutions and Supersymmetry, Data Center Market Research Study, Presentation for PG&E Customer Energy Management, October 19, 2000.
Reiterman, Tim, "San Franciscans Protest as 'Server Farms' Sprout," Los Angeles Times, March 26, 2001.
Angel, Jonathan, "Energy Consumption and the New Economy," Network Magazine, January 1, 2001.
Huber, Peter & Mark P. Mills, The PowerChip Paradigm, The Huber-Mills Power Report, The Gilder Group, Inaugural issue.
Geography and the net — Putting it in its place, The Economist, August 9, 2001, pg 19.
Also in this Issue:
- Copper-clad Condos Cap Ann Arbor’s Ashley Mews Building
- The New Economy