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Rob Garbutt, left, and technical director Patrick Doyle.

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1:00 am, June 16, 2008
Data centre operator's lust for power

UK Grid ponders £4.5m power plants investment

By Joanne Birtwistle

Manchester's power shortage has forced UK Grid, a data centre operator, to draw up plans to generate its own electricity.

It is considering an investment of at least £4.5m in combined heat and power plants to serve a new centre it is planning in the Northern Quarter.

The company, which has tripled its turnover each year since 2005 — hitting £420,000 in 2007 with a target of £1.5m to year end March 2009 — said if it did not take the step, its growth would soon be hindered by electricity supply problems.

The company has two facilities on Manchester Science Park, which will be full in nine months time, despite a recent 7,000 sq ft expansion, and power capacity restricts further growth in the area.

It is in talks for another 12,000 sq ft location just outside the science park, on a different power ring, but managing director Rob Garbutt said this was just a short-term solution.

The company has its eye on a 130,000 sq ft site in the Northern Quarter, which it says would be suitable to hook up to a mains natural gas supply to feed CHP plants. “We are looking at other locations suitable for CHP, but this one is prime for it,” said Garbutt. “We'd use the space in 20,000 sq ft chunks.”

CHP units cost £1.5m for a plant that can generate 2MW of power, which is enough for around 15,000 sq ft of space, according to Garbutt. The company would need three plants initially, costing £4.5m. There would also be the cost of installing a fibre network at the new site — an additional £300,000.

But it could get more value out of a CHP powered centre. There are four levels of data centre, but only tiers one and two are available in Manchester at present.

Tier three data centres, which require two independent electricity feeds, can charge more. Garbutt reckons a CHP powered data centre could be tier three, if it hooks up to the grid as well.

Connectivity

Tier three centres are mostly used by government organisations and financial institutions. “Manchester needs a tier three, the demand is there,” said Garbutt.

Privately-owned UK Grid has two routes to fund its plan. The first is to bring in another company to install the equipment and take on all costs but then sell the electricity generated by the plant to the company.

“It's still cheaper than buying the electricity from the National Grid, but there are risks with that. Our preference is to have full control over the plants and get investment from a venture capitalist or business angel for a stake in the business,” said Garbutt. “But the funding aspect is new to us. We've grown organically so far.”

Telecity was one of the first data centre companies to come out of the university 10 years ago. Its data centres at the Science Park are at capacity and it too is looking for other locations.

Director James Tyler said that although data centres don't have to be based in the city centre, the concentration of connectivity providers make it the most attractive location. “We look for locations on or close to major connectivity networks.”

But Tyler emphasised that there was a lot more to a tier three data system than having to independent power feeds, security is a big issue, and said Telecity's tier two systems were similar to tier three in those respects.

Telecity is also looking at a range of different technologies for power generation. “The constraining factor is not space but power. Access to power is a key driving factor in our ability to grow,” said Tyler.



COMMENTS? jbirtwistle@crain.com