Energy hikes to hit SA datacentres

·25 Mar 2013

Lex van Wyk, CEO of Teraco Data Environments says that continued electricity hikes place immense pressure on South African business, specifically with regards to IT strategies and employment.

The National Energy Regulator of South Africa (Nersa) recently granted power utility Eskom an 8% average increase per annum over the next five years.

Van Wyk notes that an estimated 50% of an organisation’s power usage is expended on IT resources alone.

“Many South Africans will breathe a short sigh of relief that the proposed 16% hike was not approved, but the relief is short-lived with the lower than anticipated 8% increase in 2013.

“The reintroduction of rolling blackouts, the lack of maintenance and planning and the shortfall in South African energy is top of mind and threatens business feasibility and employment in general,” said van Wyk.

BRIC comparisons

Electricity prices in South Africa have increased by more than 170% in the past five years, whilst prices in other BRIC countries (Brazil, Russia, India, and China) have decreased by more than 36% in the past decade.

With mounting pressure on the power grid in South Africa, the reintroduction of load shedding comes as no surprise, according to the company lead.

Van Wyk said that seeking alternative energy solutions isn’t always the answer. He quoted the almost 100% increase in the diesel price over a four year period, which would affect those looking to consider generator power.

He said that Teraco Data Environments are geared to withstand power grid issues through substantial generator backup power, but the increasing price of Diesel makes this an expensive solution.

“With a keen eye on efficiencies, alongside investments in power efficient technologies, elements like cooling, virtualisation and colocation all become contributors to economies of scale,” the CEO said.

Guy Willner, a Teraco board member, reiterates that power is the real cost in the data centre.

“Internationally, over the last decade we’ve seen the pricing model for colocation data centres change almost completely from a footprint model to that of power. Floor space is now almost completely irrelevant and power and it’s guaranteed availability is the ultimate commodity traded,” Willner said.

“Given the increases over the past five years and the expected rolling blackouts, this model is unlikely to be financially sustainable. The Eskom crisis will force data centre operators to revise their models in order to stay afloat.”