Datacenter Dynamics2013, March 4th

I am writing this blog from 36,000 ft above Scotland, en-route to Iceland, where I am about to revisit a bit of my own past and relish in how one of the oldest resources in the world is helping drive a highly modern industry in Iceland. It is something Iceland’s investment board, Invest Iceland, clearly wants to exploit and for good reason (more about that following my tour, sponsored by Invest Iceland).

For the next four days I will be shuttled around from data center to geothermal power plant – the tour focusses heavily on these two areas. And it is not surprising. A number of new data centers – including Verne Global- have opened in Iceland in recent years, and their number one sell is low cost made possible by Iceland’s abundant geothermal energy, which is fed into the grid.

Flying out from the UK – where I am based – I am all too aware that power costs can be a large hindrance to those wanting to operate in the country. And while the government has been quite clear that the country needs to find new ways to generate power, it has focussed more on the benefits of nuclear than any other alternative source from gas or coal-fired power. A report released in the last few days actually highlighted the UK’s support for nuclear energy. Minister of State for Energy John Hayes welcomed its support, which comes at a time when five companies are already building nuclear plants across the country.

“The Government is determined to see new nuclear play a role in our future energy mix, as it does today. We are working to make the UK one of the most attractive places in the world to invest in new nuclear,” Hayes said.

This is not to say the UK government has never considered using geothermal power. It went in search of opportunities in response to the 1973 oil crisis then gave up interest when petroleum prices fell. It did so again in the 1980s, looking at potential geothermal aquifers in the UK but gave up when it found one well drilled was too small to be commercially viable. (That well now provides district heating for a civic center and shopping center and some other city center buildings in Wessex.)

This does not mean the UK has no potential for geothermal energy. The North Sea has been listed as a possible resource and has Hot Dry Rock technology could provide even more potential.

In fact, a report by the Guardian newspaper in the UK said the UK could actually meet a fifth of its power needs by exploiting geothermal power, but not enough incentive was actually offered for such projects to exist – wave and tidal projects receive more government backing in the UK.

Part of the problem lies in the cost of drilling for geothermal energy, and the cost of pumping water to the underground rocks, an act which can bring about seismic activity.

Investing in geothermal

I also wonder how much of the problem lies in what already exists in relation to energy infrastructure? This seems to be a key talking point in Africa, where geothermal is now said to hold some promise, for both its industry and for its overall economic development.

Reports from Africa suggest the continent has 14,000MW potential of geothermal energy. And because much of the continent is still not even on the electrical grid, there exists an opportunity to set up micro grids, which allows energy to be generated in smaller plants – quite unlike the model used currently in the UK.

This model means energy can be produced closer to its source, with solar energy and wind energy supplementing the supply chain when populations are not nearby. It also means less can be lost during the transmission of the energy to its user.

The World Bank and the Development Bank of Ethiopia are now offering US$20m to help fund energy projects to help tap into Ethiopia’s geothermal potential, and it expects to offer a further $20m later on. Funnily enough, a British company has been shortlisted to build Ethiopia’s first geothermal energy plant – Cluff Geothermal.

It told The Guardian the government there is currently working out regulations around the space, with a framework expected in the next six months.

This is where my past comes into this blog. I used to edit an energy title, along with a number of other technology publications. I have attended numerous energy events, including the World Energy Congress in Rome in 2007 – the first event at which admissions seemed to stick that the world was running out of energy.

Solar, at this event, was pushed heavily. Wind, to a degree. And hydrocarbons, well they seemed to be the real flavour of that year. But much still appears to need to be done in each of these spaces to harness the real potential. Back then little was actually said about geothermal.

Someone recently asked our LinkedIn group for use cases for geothermal energy in the data center. There seem to be a few interesting case studies out there but also a fear that the technology is still maybe not up to the task.

But despite the challenges, Iceland seems to base a lot of its future on its geothermal power. And I am quite interested in seeing how it harnessed this, and the technological challenges it had to overcome along the way. The UK may not have opportunities as large as Iceland’s – or even Africa’s – but it will be interesting to talk with Verne, which has its own substation, to find out just how big an opportunity, in relation to geothermal energy, has to be to really make it worthwhile in the first place. And how much investment could be needed to make geothermal a reality elsewhere.

As Iceland’s catch cry says: Why burn coal when you have fire.