Tech Companies a Drain on Power Grid Energy: Electricity demand in Silicon Valley has grown at four times overall U.S. rate, experts estimate.

By THOMAS S. MULLIGAN, Times Staff Writer

It was 109 degrees last June 14, the hottest day in San Jose history--and quite possibly the longest day in the history of SDL Inc. The skyrocketing mercury overtaxed the area's electricity grid, culminating in blown transformers and rolling blackouts in much of the Bay Area. Frenzied SDL managers suddenly found themselves in an odd bucket brigade, feeding diesel fuel into a backup generator five gallons at a time to protect several super-sophisticated devices. Without them, the optical equipment maker would have to close for up to six months--and face a potential loss of $200 million in sales.

As it was, the company suffered "only" $3 million in losses. But its experience that day points up a uniquely Internet Age energy crisis: The firms feeding the high-tech boom are increasingly dependent on a fragile power grid. At the same time, these very businesses are a big part of the problem, consuming electricity in amounts no one would have predicted even a few years ago. "The current electrical system was not ever designed for the Internet economy," said Karl E. Stahlkopf, vice president for power delivery at the Electric Power Research Institute in Palo Alto. "Anything chip related is a tremendous Achilles' heel." Power failures nationally cost more than $50 billion a year in lost productivity, Stahlkopf said, citing a study conducted for Business Week. "Those costs will only rise as our economy becomes more silicon based," he added. It should hardly be news to Californians that the power grid is stretched taut.

On Thursday, the state faced its first-ever Stage 3 power emergency, only narrowly avoiding the prospect of widespread rolling blackouts. So far this year, the California Independent System Operator, the nonprofit traffic cop for the state's electricity flow, has declared 29 Stage 2 emergencies--when the grid's reserve power supply has fallen below 5%. Cal-ISO has declared 46 less severe, Stage 1 alerts. In 1999, by contrast, there was just one Stage 2 alert and four Stage 1s. In an increasingly energy-efficient and "wireless" society, how can this be? Hand-held portable communicators run for hours on tiny batteries. High-efficiency fiber-optic lines are replacing copper in many places. The latest computer chips process vastly more bits of information than earlier versions while using a fraction of the power per bit.

Bear in mind, though, that "wireless" or not, every cell-phone call or laptop-computer message at some point engages the power grid. All the servers, routers and switches that speed that information along are plugged in somewhere, as are the air conditioners that cool them. The Electric Power Research Institute estimates that power demand in Silicon Valley grew by 12% in the year that ended in August--more than four times the overall U.S. rate. The region imports more than 90% of its power from elsewhere in California or from out of state.

Anyone in the Bay Area who was unaware of the capacity strain had the point driven home during the blistering heat of June 14. That afternoon, Cal-ISO initiated rolling blackouts, or temporary localized power shutdowns, to prevent a cascade of far more serious outages over a widespread area. The basic problem was a bit like what happens when you're in the shower and somebody flushes the toilet: The water pressure dips. With electricity, if you call for more power when the system is already running full blast, the voltage drops. But many electric motors are designed to compensate for low voltage by drawing still more current. And if you pull more current than your transformer can handle, it will overheat. Across the Bay Area by the end of that broiling afternoon, the voltage drop would cause 500 heavy-duty transformers such as the one at SDL to cook themselves into slag. Coincidentally, SDL's transformer blew at almost the same moment its PG&E representative called to warn that the company's power was about to be shut down as part of the rolling blackout. In the same call, PG&E said it might take a whole day to replace the toasted transformer. That was too long. If the backup generator ran out of fuel before the main power could be recovered, the results could be devastating for SDL, which is now in the process of being acquired by JDS Uniphase Corp. Steven Lane, senior facilities engineer, said later that the lasers and other equipment SDL makes rely on a process involving 10 super-sophisticated gas purifiers. If their palladium filaments cool suddenly in a power failure, the purifiers can crack and be destroyed.

The devices cost $60,000 each, Lane said, but the real danger is that it takes six months to obtain replacements. A six-month production shutdown would cost SDL not only $200 million in revenue but an untold loss of market share if customers switched to other suppliers. And SDL isn't nearly as sensitive to disruption as some other high-tech firms. Certain cutting-edge operations require what engineers call "six nines," or 99.9999%, reliability. That means they can tolerate outages totaling no more than 31 seconds a year, or about nine one-hundredths of a second per day. An entire sub-industry has grown up in recent years to provide UPS--uninterruptible power supply--equipment for high-tech users. These devices are basically truck batteries combined with souped-up versions of the surge-suppressing "clip strips" that many home computers, faxes and printers are plugged into. Beyond the question of reliability, there is intense debate about how much electric power is consumed by the information technology portion of the economy. One camp, led by energy consultants Peter Huber and Mark P. Mills, contends that the Internet infrastructure, the telephone system, home and office computers and peripheral devices such as printers, scanners and fax machines together accounted for 13% of America's energy use last year. By the end of the decade, they say, that number will rise to 35% or more. Other researchers, including scientists at Lawrence Berkeley National Laboratory, say high-tech consumes only about 3% of U.S. power. A Department of Commerce study this year said that although information technology industries now account for only 8.3% of gross domestic product, they have grown so fast as to contribute nearly a third of real U.S. economic growth between 1995 and 1999. Power demand has long been associated with GDP growth, but perhaps predictably, experts debate whether the link is breaking down or getting stronger. Frederick M. Schultz, power industry analyst for the brokerage firm Raymond James & Associates, said it almost doesn't matter what share of consumption belongs to high-tech. Far more important, he said recently, is "what's around the corner." As with so many other resource issues, the graying of America plays a part. The over-65 group, a record 34 million strong, is conservative about energy use in general and has low rates of Internet usage and computer ownership. They are only temporarily offsetting the rapacious demand for power among the generation approaching adulthood, Schultz said.

Consider the college dormitory. Thirty years ago, a typical student room might contain a couple of desk lamps, an overhead light, a stereo system and maybe a hot plate. Now check out Claire Steggall's room at the University of Rhode Island. The freshman engineering student and her roommate have two computers with printers and monitors, two mini-refrigerators, a microwave oven, a television-VCR with cable service, desk lamps, a stereo with a big subwoofer for boosting bass tones, a telephone, hair dryers, a Lava Lamp--you get the idea. University administrators say that when they refurbished Steggall's dorm last year, they had to double its electrical capacity. As are many other schools, Rhode Island is wrestling with whether to formally restrict recreational computing to off-peak times of day. Asked if she ever switches her computer off, Steggall thought for a moment and said, "I do if I leave for the weekend." Whether information technology is consuming 3% or 13% of U.S. power, there is little doubt that the uneven development of technology across the country is creating pockets of intense power demand that are straining regional resources. It isn't just Silicon Valley. Consolidated Edison, the electric utility for New York City, confronts a new kind of power hog that didn't even exist five years ago: the "server farm" or "telco hotel." In New York, these facilities tend to be converted warehouses stripped to the studs and crammed with rack upon rack of servers and other high-end computer and telecommunications devices that manage the flood of information over the Internet. So far, only two full-fledged server farms are up and running in Con Ed's territory, but 40 others are on the drawing board, said John Miksad, the utility's chief distribution engineer. Despite New York's roaring economy, the city's electrical demand has been increasing at a manageable pace of about 1.5% a year, Miksad said. With peak summer demand now at 12,000 megawatts, Con Ed has been planning for annual growth of 150 megawatts to 200 megawatts, about enough to serve 150,000 to 200,000 typical homes. But the server-farm phenomenon threatens to knock those forecasts sideways.

A single low-rise installation planned for the Bronx would draw 180 megawatts all by itself. By contrast, the World Trade Center, with its twin 100-story towers and sprawling underground shopping mall, draws a load of 87 megawatts, Miksad said. Investment analysts such as Schultz believe that demographics and the continuing build-out of the Internet will force construction of a new generation of power plants, such as the controversial Metcalf Energy Center, a 600-megawatt natural gas plant proposed for San Jose's Coyote Valley. A related trend that Schultz is betting on is the development of the "distributed power" industry, which makes small, single-purpose generators--typically, gas-fired turbines--as a source of backup or even primary electrical power. Firms with extreme reliability needs could use such mini-generators to take themselves off the grid at least part of the time. That won't be enough, the Electric Power Research Institute's Stahlkopf said.

Computer chips themselves need to be made less vulnerable to tiny blips in electricity supply, he said. Intel Corp. and other semiconductor makers are working on ways to put microscopic power storage devices on chips to give them "ride-through capability," he said.

In the meantime, SDL has taken steps to avoid another June 14. It is in the process of doubling the capacity of its "feed" from PG&E and has rented a bigger backup generator with uninterruptible power supply devices that will protect its critical gas purifiers. And--oh, yes--there's a much bigger diesel tank.

http://www.latimes.com/business/reports/power/lat_elec001212.htm

-- Martin Thompson (mthom1927@aol.com), December 12, 2000