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Week of July 28-August 3, 2000
VOL. 31 No. 10
Search for staying power
By Monica Perin
When an electrical short caused power to go down in the Galleria area one Monday last month, most customers on that electric circuit were without power for an hour and a half until a Reliant HL&P crew manually switched them to a second backup circuit serving the area.
But Stewart Title Co.’s data center sailed through the power outage unaffected, thanks to a device called an automatic transfer override installed for Stewart by Reliant just the day before.
The device cost Stewart Title $35,000, but Mike Davis, director of technical services at Stewart Title division Landata, says it paid for itself many times over that first day of operation.
“All of our offices across the country tie into the computer servers in our data center,” Davis says. “When the power goes down, we have to shut down the servers, and everyone stops working. Electronic commerce doesn’t go through, orders are not coming in, everything stops.
“Sometimes we lose hardware – computer systems,” he says. “There is the potential for data loss. Plus it takes time after the power is back up to get the system going again and retrieve data.”
Simply put, the Internet economy runs on electricity. Computers and the Internet today consume 13 percent of the nation’s available power compared to less than 1 percent just seven years ago. The Internet today draws an estimated 300 billion kilo- watt-hours of power, and the cyber world is expected to claim half the power grid within just a few years.
And not only is demand for power exploding in kilowatts, the Internet economy also requires high-quality power that flows in a clean, constant stream, free of surges or sags. It is estimated that U.S. companies lost $50 million in 1999 because of power quality breakdowns, such as brownouts. So the other critical power need of e-commerce is reliability – power that never goes out.
The nation’s electric grid supplies power with 99.9 percent reliability, which means, on average, eight hours per year of down- time. But high-tech users like data centers and telecommunications facilities require 99.999 percent or higher reliability, which translate to a few seconds of outage over a year.
But the U.S. electric power grid, as it exists today, can’t offer that. As a result, a new energy technology industry is emerging to supply those critical power needs, and analysts at Banc of America Securities estimate it could become a $50 billion industry within the next five years.
PREMIUM SITES
The Westwood Technology Center, which is under development in the former Westwood Mall building in Southwest Houston, is typical of the kind of clients seeking that increased reliability from power companies. IRM International, a consulting firm that specializes in serving high-tech facilities for the information technology and telecommunications industries, has been working with the Tech Center’s developers and Reliant Energy HL&P to provide the enormous amounts of power the center’s tenants will require.
The center’s 500,000 square feet of space on the lower level is being fitted for high-density server farms and telecom co-location facilities which can require 10 to 12 times the power of a normal office building.
“The location happens to be a nexus of a large amount of communications structures – fiber optics of a number of carriers. And it has received a lot of attention from these people,” says George Carr, IRM project leader. “The full electric load it could require is so large that the numbers caused the Reliant folks’ eyes to roll back in their heads. It’s a huge challenge.”
Reliant is bringing in a second circuit from a separate power substation. The initial capacity will be two 35-kilovolt circuits that will provide about 60,000 kilowatts of electricity, says Reginald Comfort, manager of electric distribution engineering for Reliant HL&P.
And depending on tenants’ needs, Reliant will also offer a variety of rollover schemes. Automatic transfer devices like the one installed for Stewart Title can provide rollover speeds ranging from 30 seconds down to 0.0083 seconds, according to Reliant, although the devices that reduce power interruptions in the micro-seconds range are still in the research and development stage, Comfort says. During the rollover time, an uninterruptible power supply, usually battery-operated, can be used to keep computers running.
Rollover switches are offered by Reliant as part of its Premium Rollover Service, which was initiated a couple of years ago and now is beginning to see increasing demand.
“We’re seeing requests for premium service on a daily basis now.” Comfort says. “We’re seeing more and more of these Internet customers – (with) nothing but computer equipment.”
WORRY OVER WIRES
Reliant is working with the Electric Power Research institute on pilot projects, including energy storage devices that prevent momentary fluctuations in the flow of power.
While Reliant is willing to work with individual customers to provide solutions for their power needs – with the customer paying the cost – consultants at IRM say they are trying to get Reliant to anticipate heightened power demands and prepare for them in advance.
“It’s a chicken-and-egg thing.” Says IRM’s Jim Francis. “Reliant says we’ll bring the power in when you need it, but if a client moves in, they need it right now, and it’s a very lengthy process to get it.”
Indeed, IRM President Michael Colton says timing to market is everything for dot-coms planning to go public. “They don’t have time to wait for the utility to take a year or two to bring in power. Downtime is unacceptable in the dot-com market,” he says.
IRM’s Carr points out that Houston’s business continuity is interrupted more often by electric failures than anything else, including the weather. Overhead power lines and a lack of zoning create problems in Houston that aren’t problems elsewhere, he says.
“In the Central Business District, most power distribution is underground, so the reliability factor there is higher. But in Greenway Plaza you have overhead services through unzoned neighborhoods, and that represents a risk to tenants in large complexes. A garbage truck backs into power line and knocks it down and businesses go down.”
For that reason, Reliant has proposed burying distribution in Greenway.
For businesses whose power needs cannot be adequately addressed by the grid, the next option is to install an on-site power source – a generator. This was the route Stewart Title was planning to take until Reliant added a second circuit in the Galleria area to meet growth demands. That plus the automatic switch met Stewart Title’s needs instead.
But on-site generation is seen as a big part of the emerging critical power industry. Enron Energy Services, an outsourced energy management business started a year and a half ago, has just formed a partnership with Siemens Westinghouse, one of three global suppliers of gas turbine generators.
“We discovered that our clients required a higher quality power than the grid can provide, so we have to install certain equipment for the customer,” says Sean Holmes, vice president for strategic infrastructure development.
That can mean generators or other technology, such as fuel cells or flywheels. Enron’s agreement with Siemens enables it to tap into Siemen’s power engineering expertise on behalf of Enron’s clients, but the agreement is equipment-neutral.
“We’re marketing a solution, not pushing a product,” says Holmes.
Enron offers its clients risk management expertise and performance measurement as well as something unheard of in the traditional power industry – a money-back guarantee. Enron guarantees the quality of power, and they meter it to track its performance. If the customer doesn’t get the quality they need. Either they don’t pay Enron or Enron pays them liquidated damages, says Holmes.
Such a financial guarantee is also being made by Calpine Corp., a California-based independent power producer that recently unveiled a new business unit called Calpine c-Power, which plans to market small 10- megawatt gas turbines as the core of its new critical power business.
Enron’s guarantee is covered by a partnership with Hartford Steam Boiler, the largest equipment insurance company in the world. Calpine’s underwriters are Hartford, Lloyd’s of London and AIG.
“ The No. 1 claim in dollar terms for Hartford is power quality problems,” says Holmes, whose business unit has signed a half-dozen power quality deals so far – though none in Houston – and has “a lot more in the pipeline.”
“Power supply is a critical issue here in Houston, more than people realize,” says IRM’s Colton.
