Input sound file:
1003.Day 2 Batch 4
Session Name: Energy Blooms at eBay’s Innovative Data Center in Utah: eBay and Bloom Energy
S2: Video voice
S3: Ucilia Wang
S4: Peter Gross
S5: Dean Nelson
S6: Audience Member 1
There’s perhaps nothing more important than green and sustainability. We have a panel that will delve into this topic, led by Ucilia Wang, and she’s going to come out. The panels are going to come out and you’re going to be treated to a video first, followed by an interesting panel discussion, so let’s welcome them.
Video voice 00:26
There’s this oxymoron with sustainability, they have to choose between efficiency and ecological effectiveness. It’s not right. Data centers are the engine that are powering commerce, and they’re consuming over 2% of the electric consumption inside the United States today, and that’s growing. eBank serves the world, and our data centers are the foundation that allow those transactions to happen and we’ve got from the marketplace down point, eBay.com, over $68 billion of the goods are transact every year. That’s over $2, 000 a second, so our infrastructure needs to be up and ready for the great of 100 million people that utilize our services. As the largest consumer power for eBay Inc., my team have a responsibility to make sure that we are lowering the power consumed and lowering the carbon that is submitted for the infrastructure that we build.
Video voice 01:16
The Salt Lake City Data Center is the first one we’ve actually built from the ground up, and we’ve built it with efficiency and cost effectiveness, and flexibility and scale [online?] from day one. We design the air conditioning systems here to be able to take advantage of the climate. The electrical infrastructure is also extremely efficient. We also have some of the densest, most efficient deployments of compute infrastructure out there.
Video voice 01:39
The majority of power that’s actually generated in Utah is from coal. We found a way to actually solve that problem, and that’s from on-site generation so we can make a grid, a secondary source for us. We’ve got solar generation on the roof, all the way down to fuel cells to generate power that our servers are consuming.
Video voice 02:03
Everyone’s connected and every one of those transactions that you do, goes through a data center somewhere. Imagine if those data centers only consume half the power that they can today, I have a 14-year-old daughter at home, and if I can go back to her and say, we’ve actually reduced the carbon emissions for the planet by investing and designing our centers, that actually makes me feel great about what we contribute every day.
Ucilia Wang 02:43
Thank you so much for joining us for a panel on the green data centers. To my right is Peter Gross, Vice President of Mission Critical Systems at Bloom Energy. This is Dean Nelson, Vice President of Global Foundation Services at eBay. Welcome.
Peter Gross 02:57
Ucilia Wang 02:58
We saw the video about the data center, but for today’s panel discussion, we actually going to talk about on one of the two data center projects, specifically, that’s powered only by the fuel cells from Bloom Energy. Could you give me a rundown of how is this data center designed differently and what’s unique about it?
Peter Gross 03:15
Sure. This is called Project Quicksilver, and it’s the second phase of our data center in Utah. What we have is, Bloom fuel cells, that are the primary fuel source. Imagine we’ve got natural gas coming in, and then our computers are generating electricity and our computers are consuming that at a 100 feet away from which it’s generated.
Ucilia Wang 03:34
I know you’ve done and see liability is really important, so… any secondary source of power or is grid really the only other backup power?
Peter Gross 03:44
Yeah. Grid is backup, so we have the two fuel sources utility feeds coming in, the natural gas and the fuel cells. That’s how it’s backed up.
Ucilia Wang 03:53
What makes this project different for Bloom? This is a very first one where a data center is powered primarily – or I should mean, by fuel cells?
Dean Nelson 04:05
For Bloom, it’s unique for this whole industry. If you look at the history of the data center industry, especially on the electrical side, innovation has been slow and very incremental, nothing has changed significantly for 30 years. This is the single most transformational, the most disruptive technology solution to this industry in a very long time.
Dean Nelson 04:34
What’s unique about this is that the traditional way – and I’m sure that most of the people here in the room are familiar with the general architecture of the data center that includes a lot of components from generators to UPSs to batteries to transfer switches, all of switch gears, statics, switches, many other components making the system extraordinarily complex, complicated. Because of that, we’ve got a high level of redundancy on the [inaudible] reliability when you have that many components.
Dean Nelson 05:04
More importantly, if you come to think of it, what’s unique about this industry or that architecture is the fact that you have all the systems that don’t do anything except the use – consume electricity and nobody – who runs a data center ever wants to have them operational because that’s one – usually, things go bad. What’s unique about the eBay solution here, using Bloom fuel cells, is the fact that for the first time, for the first time in this industry, this device replaces all these components and provides an active role by generating electricity [inaudible] the life of the system, electricity that is typically cheaper than the cost of electricity generated by the utility, so it provides cheaper electricity for a much higher energy efficiency and the same level or higher level of reliability than a conventional data center.
Ucilia Wang 06:00
Now, I know some of the data center operators are starting to look at using alternative energy, so-called the green data center, and to reduce their carbon footprints. Apple, of course, built the data center in North Carolina with solar panels and Bloom fuel cells. Is there a disadvantage – I guess, distinct advantage for using just fuel cells to power your data centers as opposed to having this mixed of solar and fuel cells and other sources, alternative energy?
Peter Gross 06:28
Sure. If you look at the data center, utilities love us because we’re consistent power draw, 24/7, 365, by forever. Solar is different times of the day, six hours, you can grab some power. But really, the difference here with fuel cells – and I love what Apple has done, they’ve added clean energy to the grid, extremely important. What we were doing in this project is a little bit different where we replace the generators and UPS that Peter was saying, that you normally put in to a data center that’s only used 1% of the year or less, only in a failure scenario. Whenever you have the grid fail, your UPS will take over the power immediately, sit on a blip and then the generator is fire on and run for as long as the grid is out, and so there’s a huge components.
Peter Gross 07:15
We’ve now said, we no longer need them in this design, so remove that cost, and we put simplified fuel cells in there. Because the fuel cell technology is a distributed technology, it’s a bunch of banks of power generation. When you lose, something fails in there, you just lose capacity. You don’t lose it, so then the resiliency of the data center suddenly goes up. I have less components that could fail, I have less things that maintain that actually cause a fault inside of the data center. Suddenly, my availability or my resiliency in the data center is higher.
Peter Gross 07:47
When people are looking at data centers, like my peers and others in the industry, how would you build your next data center? What we were doing in this project is challenging fundamentally, how we’ve all done it for the last 30 years. Do we really need to have it set that way?
Ucilia Wang 08:04
You said that data centers now run on natural gas, any plans to switch to bio gas if it’s available? What are the plans there?
Peter Gross 08:10
Yeah. What we’ve done is– because natural gas is a cleaner fuel, in Utah, there is 90% coal, as I was saying. Now, we’ve got cleaner capabilities coming in and more efficiency of how it’s converted from natural gas to electricity and the no transmission loses because it’s consumed a 100 feet away, so very, very efficient. There’s also limited sources of bio fuel or other type of [renewal?] sources in Utah, so we’re looking at all types of things. Could we get bio fuel, could we get geothermals, solar, wind, etcetera, that could offset the delta between the natural gas… in that circle.
Ucilia Wang 08:49
Could you talk a little bit with the cost of the project and the economics of it? Because I’m sure a lot of people is thinking, well, this is great to have alternative and to reduce carbon footprint, but is it really worth the expenses?
Peter Gross 08:59
I appreciate you guys giving this to us for free. [laughter]
Dean Nelson 09:04
Actually, we paid eBay to allow us.
Peter Gross 09:06
Yes [chuckles]. I actually did pay for this and we did an entire cost analysis. What’s difference is, when you’re going to this new data center design and said, I’m going to change the way it’s designed, you have to do this from the beginning. We said, the data center we built in phase, compared to the data center we’re building now, this data center is half the cost, very interesting.
Peter Gross 09:27
The most important part of it is, the resiliency between the two, this is a tier four data center design. We’re going to build a tier two or a lower available design for things that could take more of an impact or a hit. What we’ve basically done is, that tier two is getting close to the tier four, so I’m getting the same availability, almost, with this much larger investment by deploying this new technology in challenging the way it’s been done in the past.
Ucilia Wang 09:54
You’re talking about the capitalist of all capital cost, right? It’s not the same–
Peter Gross 09:56
Ucilia Wang 09:56
Not just per kilohour of electricity that you pay.
Peter Gross 10:00
Yeah. From that financial standpoint, you end up have a capital that turns into Apex. The other one is, like Peter was saying, the cost of electricity in Utah is low, it’s cheap. It’s dirty and cheap, right? But, that’s not what we want. We want clean and clean commerce for eBay. Now, when you go back and have a lower capital cost overall, you have to, in fact, to that apex into your overall kilowatt/hour cost that you would have. Now, I have natural gas, with a certain conversion plus money, apex from the capital, and my overall cost are closely even cheaper.
Ucilia Wang 10:33
Operational cost and – also lower in a long term or in a short term, you see the cost being lower right away?
Peter Gross 10:42
If you look at it, comparison to the one we’ve built first and the second one, we’ve spent twice as much capital. That one, which means, it translates to more apex. We’ve spent half the apex, which is less apex, and then the actual natural cost are relatively cheap. Overall, the TCO hands up pretty well.
Dean Nelson 11:03
If you’re looking at the cost, the individual box if you want, outside the [inaudible] above the data. If you look Bloom Box, there are three components. The capital, the equipment itself, is the operational cost which is primarily driven by the cost of natural gas. Operational cost, maintaining, supporting the equipment, over the life of the equipment. You very well know, the whole landscape is changing dramatically because abundance of natural gas, the availability of natural gas and the economic is dramatically changing. The cost of electricity is going up, there are all kinds of factors that create conditions, under which nuclear power is being used, coal is being shut down, it’s all about natural gas.
Dean Nelson 12:00
One of the advantages of using a solution like this and obviously, eBay and Dean looked at that, is the fact that you have the ability, it’s the only product that have the ability to really lock your prices low – your cost, over the life of the equipment, because you have the ability to – because of the abundance of natural gas, because of the stability of the supply, you have the ability to have full control of the operational cost in terms of electrical use by simply locking the cost of electricity for – I don’t know, 15 years. We cannot do that. You cannot had your bets when it comes to electricity, but you can do with natural gas. That changes the whole profile of the industry significantly because there is a significant rise in cost of electricity. That’s typically in California and been going up 5. 5% over the last eight years or so, and there have been an indication that the cost of electricity will continue to go up, and many other regions around the country. This is a way to really predictably be able to control your operational cost.
Peter Gross 13:18
What’s interesting too is that I pay the power bill for the company, right? It’s a significant bill. What I love is, I have the potential for a Power Hedge that I never had before. As Peter was just mentioning, I could lock the natural gas rates for 15 to 20 years if I choose to do that. And so, depending on what changes, from the actual governmental regulations potential to regulations and co-plants and other things that come in, carbon tax, I have more of a lock there. It makes more predictable for my cost going forward. Then, I’ve got of course the efficiencies of conversion.
Peter Gross 13:51
Then on top of that, I also am making my transactions, so they think of eBay.com, we have $68 billion ago through eBay.com. We touched the $150 billion or $175 billion in commerce last year. All of the transactions going through this site are going to be cleaner. It’s the bonus that comes from it, so I’m queuing my cost center control. I’m increasing my availability for what our customers are seeing with less, and I’m making the actual transactions cleaner.
Dean Nelson 14:22
May I add to what Dean say here? If you look at what’s important to a data center, any operator, any owner of a data center, there are three components that are quantifiable. One is cost, cost of ownership that includes energy. The second one, the main priority is reliability. The third one which for some people are more important than others is the carbon footprint. These are the three. I mean, obviously, there are other important factors like flexibility, maintainability, securities, these kinds of things.
Dean Nelson 14:58
What eBay has done here is, they have the ability to leverage all these three elements into – with the architecture develop here, they can indeed create more reliable, lower cost, greener system. No other solution existed that provides all these three benefits simultaneously. The more reliable, the lower efficiency and the higher cost is different here.
Ucilia Wang 15:27
I’m going to open up actually to question and answer session, so anyone has any questions for Dean and Peter?
Peter Gross 15:36
Because eBay transactions [inaudible] [chuckles].
Ucilia Wang 15:39
This is the chance to ask about the economics or the technologies involved in making the data centers cleaner.
Audience Member 1 15:46
Hi. First of all, congratulations. I think it’s amazing, what you’ve done. My question is, you are your only consumer within your data center today, and you talked about tier four data centers, so the operators of data centers who result to the enterprise, those certifications are extremely important. Do you think those certifications and the process of replacing or changing – dramatically changing the infrastructure is a barrier to them being able to use this technology?
Peter Gross 16:29
Let me see if I can clarify. You’ve got a KOLO that actually is hosting a lot of companies in it.
Audience Member 1 16:33
Take the Verizons or–
Peter Gross 16:35
Sure. Each of those companies, when a consumer come in and say, what’s your tier class? Are you tier four?
Audience Member 1 16:41
Peter Gross 16:42
Great. And so, I think that there is a great dialogue that’s going to be happening with the Uptime Institute assessed classifications, right? Peter has been in the industry for a few years–
Dean Nelson 16:51
Peter Gross 16:51
Just 75, right? And, has built a billion data centers or something, and I think that this is – there’s disruptive technology that’s coming in that we have to accommodate within those tier classifications. Bottom line, will they have better availability in that infrastructure by having this type of technology backing it up. What we found is, we will. Let’s say, KOLO and others that have even more critically of having so many clients altogether concentrated, really need to care about that and being able to quantify this via Uptime tier level or some other measurement would be very important.
Dean Nelson 17:24
Just to add to your question. Indeed, we’re starting the dialogue with the Uptime Institute for the certification and we also assigned and talked to a number of wholesale collocation providers.
Peter Gross 17:40
The reason we’re here today is we’re sharing this content with the world, right? We’ve been very public about this project because we do believe that it starts the right dialogue. There’s a technology that people should consider from Mission Critical environments. We basically put our money where our mouth is. These were the transactions go through. These were the transactions go through. This is our revenue, right? This is our engine that feeds eBay.com for global commerce. That’s a big deal. [chuckles] By having that in there, we’re proving out that this is actually can be done this way. We have high confidence that it will be – we’ve span up stuff last week. We go live in August.
Audience Member 1 18:14
I have a following question.
Peter Gross 18:16
Audience Member 1 18:17
I’m wondering if you have future projects where you’re looking at actually power purchase agreements to do frequency regulation and power conditioning. You talked about bringing the cost down by half, there may be renewal assets that you can actually – then use battery technology and put energy back on to the grid for others to consume.
Peter Gross 18:42
Yeah. We’ve got interconnection agreements because we’re generating 6 megawatts of power on-site. We’re going to consume it all because our data center growth is pretty high. But there might be things where – you said, we have triggers with the utility. I would say, it’s probably best to go back and feed this to the grid, from a cost standpoint. Great, we’re increasing the cleanliness of the grid, and then we could take other things that are coming off. This is the main response in other programs that will put in place, but the connection is really important, and we’ve got those connections today. We just don’t know exactly how we take advantage of them.
Audience Member 1 19:16
Dean Nelson 19:17
Energy storage, as far as the grid stability is concern, is very important in the – and Bloom is a player that would solve some of the issues related to the stability of the grid created by essentially – ironically by renewable cell, as opposed to having large buffers, large battery banks on the grid, fuel cells can play those role.
Ucilia Wang 19:44
Anyone? One last question then, actually I was trying to touch on – given that there’s so many energies in having fuel cells and this whole green data center concept, what’s your next project with fuel cells and renewable energy? Would it be the US or are you looking at – with Bloom or with eBay, domestically or internationally for this kind of project?
Peter Gross 20:10
I’m focused very heavily on this one right now, but I’m sure you guys have a hundred of them all lined up, right? [chuckles]
Dean Nelson 20:15
Actually, we have– I was surprised to be honest, how rapidly this solution has been embraced by the industry and now we have a number of projects in the process of being developed, some of them are close to being installed, and so this is growing very nicely. Bloom has been growing extremely rapidly for the last five years.
Ucilia Wang 20:43
Do you see more adoption in Europe for example, because of the more progressive emission reduction policy there, versus in US?
Dean Nelson 20:50
I don’t know if the Green Cloud is are more important in Europe. Yes, we’re looking at other locations around the world and it’s primarily driven by availability of gas and cost of natural gas.
Ucilia Wang 21:05
Got it, okay. Thank you so much for joining us. Thank you.
Dean Nelson 21:09
Peter Gross 21:08
Thank you, fascinating.