Digital Transformation to Hit the Energy Wall

This audio was created using Microsoft Azure Speech Services

In my last blog post, I discussed the world’s ever-increasing need for energy and how to turn that challenge into an opportunity. Now, let’s explore how that shift will develop. 

We live in an ever-changing digital world – one that is engaged in deep revolutions. From new business models and new consumer technologies to new infrastructure, energy and power systems – digital transformation is ubiquitous.

Change does not come without hurdles. In fact, one of the today’s greatest challenges faced by company leaders is to simply “make digital work.” The topic of digital transformation and its challenges rise as the top concern on every C-suite survey feedbacks.

Yet, these surveys overlook a key aspect. With our world turning hyper-digital, its impact on the power system is dramatic. Also, these surveys fail to recognize traditional energy as the greatest barrier to successful digital transformation.

Digital transformation is leading toward an “always on” paradigm

As the digital economy develops, IT is pervading all sectors.

The development of the Internet of Things is taking digitization to a new level, transforming the way we interact with our environment, and the way business and manufacturing processes operate. IT is pervading homes, buildings, industrial plants, energy grids and transportation at a scale never before experienced.

With everything becoming a data center, requirements on energy availability are skyrocketing throughout all market segments, significantly transforming an outdated, century-old power system that’s simply not designed to meet such demands.

Energy availability has been a critical topic in IT systems for close to two decades. The industry of data centers has been looking at 100% computer room availability. The requirements for reliability of the energy system (alongside cooling) has traditionally been several orders of magnitude above that of other applications. Typically, the Uptime Institute tier topology standard has been designed for data centers to ensure the highest reliability through design and operations conditions. Nowhere else in the industry have trends gone that far.

For example, availability is at the business core of Pulse Data Centre in Queensland, which is Australia’s first Regional Uptime Tier III facility. To ensure reliable services for its corporate and enterprise customers, the new site will combine multiple solutions, from IT and power innovations to building management and security, all of which will enable precise planning and capacity allocation.

Digital transformation is leading to a massive “surge” for power

IT represents roughly 10% of the worldwide power consumption. Yet, its share in the mix keeps growing. Current forecasts expect it to double by 2030, or a growth of around 10% CAGR. By then, IT power consumption could reach three times its current levels.

But forecasts depend on the underlying assumptions, and they can be proven wrong. The truth is that the pace of development of IT is far exceeding those conservative rates.

Let’s have a look …

  • The number of connected devices is increasing at lightning speed. Various forecasts show staggering growth numbers between 15% and 50% CAGR, from 30 billion devices today to between 200 and 1,000 billion by 2030.
  • This leads to a significant increase of data production: Data has multiplied by six in the last five years, and forecasts consider potential growth of “business as a service” to be 30% year on year in the coming decade.
  • This volume of data production creates a significant impact on memory access, which represents around half of total energy consumed by computing. By 2030, the volume of data in memory could be multiplied by 100 to 10,000, depending on forecasts.
  • The consequence is that communication networks would need significant upgrades to maintain the same access to information – by an order of magnitude of 20 – while going mobile, which is much more energy-intensive than traditional fiber optics.

A concurrent forecast taking in account those parameters would lead us to think that IT systems will consume as much as the total forecasted power demand by 2030. That would mean global power consumption would quadruple, which is not exactly what forecasts currently depict. Is the world ready for that?

Of course, research is uncovering new ways to cope with these staggering figures, and efficiency will be reached in many aspects – in the way we compute, the way we access data, and the way devices consume energy. Nevertheless, most of the research is still in early stages.

No matter what we think of forecasts, energy is emerging as a roadblock to the true development of the digital economy.

In the next post of this series, I will discuss how we go about transforming our traditional energy system to enable a new digital power economy.

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