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Media - Canberra Times

Utility behind $1b data city plan

Published: 02 October 2007

John Thistleton

Utility provider ActewAGL is behind a proposal to construct a $1 billion "data city" to create massive computer storage in what would be one of the most significant infrastructure projects undertaken in Canberra.

ActewAGL has formed Canberra Technology City with partners Galileo Connect, a giant British-based data company, and Technical Real Estate to establish two 24-hour data hubs at Hume and Belconnen.

The consortium also wants to build a gas-powered generator at Hume, capable of trebling the data centre industry standard for power output.

Excess power would go into the energy grid and the generator, combined with a bigger capacity gas pipeline, would help Canberra through peak winter and summer periods.

As well as providing valuable energy back-up, the venture would create 600 jobs.

The consortium sees a market in the sudden and dramatic rise in demand for electricity to power computer hardware. The development would offer huge computer storage suitable for global financial institutions and governments.

The consortium is about to embark on a roadshow to sell the concept to companies throughout Australia and the Asia-Pacific region, including Hong Kong and Singapore. Technical Real Estate director Bruce McEwen said the consortium was proposing 20 "next generation" data buildings at the Hume hub and 10 supplementary ones at Belconnen for companies demanding dual sites for production, back-up and recovery purposes.

Rapid growth in demand for power for computer processing exceeded the physical limits of existing data centres worldwide. ActewAGL chief executive John Mackay said assessing the viability of a gas-powered generator for Canberra had been under way for five years, but the economics did not stack up without a major new user.

Mr Mackay said Canberra residents also stood to gain, with surplus power going into the main grid.

The consortium wants the first centre commissioned by 2009.

"This has huge potential. If we can make it happen soon, before a major player enters the market then there could be the generation of employment and income," he said.

ActewAGL would need to upgrade one of its supply pipelines to either the Sydney-Moomba line or eastern gas line to feed the Hume generator.

Mr McEwen said federal and state governments and a range of data centres in Australia and around Asia needed more power than was available.

"For every unit of power used by the computers, you need another unit to cool them and so as demand for power goes up, likewise demand from the cooling structure rises," Mr McEwen said.

Recent power failures had threatened critical computer systems in central Melbourne and Sydney locations.

"The boards of these companies are well aware of the need to move their computer operations to more robust data centres.

"One of the big issues around the globe is the failure of power infrastructure to cope with demand.

"Even at a domestic level, when someone turns on an air-conditioner there is a problem," he said.

"We have a unique partnership with ActewAGL for a planned, on-site, gas-powered electrical generation."

He said 80 to 90 per cent of Australia's power came from coal-fired generators.

Using gas as a clean burning technique relative to coal was a vast leap forward for data centres.

Sourcing power offsite meant 10 to 15 per cent of power was lost during transmission, depending on atmospheric conditions. Power generation at the data centres overcame the transmission loss and led to a power gain.

Most data centres around the world had a power rating of 300 to 500 watts per square metre. Modern ones hastily constructed in the dotcom boom in 2001 were rated at 600 to 800 watts per square metre.

Offering 4500 watts per square metre would attract investment in the proposed new centres.

The locations of the Canberra technology hubs are under wraps until clients are signed up.

Mr McEwen said discussions were under way with educational institutions to enhance course materials for training staff.

ActewAGL thinking big on new data `city'

John Thistleton, Business Editor

Published: 06/10/2007

Billed as one of the most significant developments ever undertaken in Canberra, a $1 billion, world-class data centre "city" proposed by multi-utility ActewAGL, is winning powerful allies. Capitalising on a worldwide shortage of secure and robust data centres - high-tech storage houses for financial institutions and government agencies - the proponents say the data city could increase the ACT's economy by an astonishing 3 per cent.

The latest data centres are known as data pods which can be dovetailed into other data pods and scaled tip as institutions grow. One pod is worth about $70 million. Galileo Connect, a data centre designer leading the market in Britain and Europe, is partnering ActewAGL's foray into the Asia Pacific data centre market.

In a race with Singapore and Hong Kong to capture market share, they're proposing 20 pods in Hume and 10 in Belconnen, powered by a $200 million gas generator which would bring a host of other benefits to Canberra.

But there's a catch. They've got to convince multinationals their technology city solves the biggest threat to the data centre industry, a lack of power. So where did all this begin? According to Canberra engineer Scott Carr, the seeds to this new venture, which could bring a host of multi-nationals to Canberra, were sown when ActewAGL formed in 2000. The Australian Gas Light Company and ACTEW Corporation, an ACT Government-owned enterprise, entered into Australia's first utility joint venture.

Further partnership developments saw ActewAGL become Australia's first multi-utility offering electricity, natural gas, water and wastewater services tinder one roof. Mr Carr, who has worked for Actew for the past 15 years, says some Canberra companies use the throwaway line that their growth is tied to the fortunes of this city.

But in ActewAGL's case, it's true. Serving a predominantly IT-based economy's power needs nurtures and guides the utility's entrepreneurial focus. Twelve months ago Mr Carr took a fresh look at ActewAGL"s long cherished goal of bringing gas-fired electricity generation to Canberra as a back tip to its primary supply. In 2002 the multi-utility was weighing tip a business case for natural gas-fired generators which emit between 30 and 40 per cent less greenhouse gas than black or brown coal generators. It considered its economic credentials as well as the ecological and social issues.

It revisited the issue in the wake of the 2003 bushfires, when it was feared another disaster of such scale would threaten the territory's power supply. Again, studies showed it wasn't economically feasible. It was clear when Mr Carr, 37, returned last year to the business case for a gas generator that another big consumer of power was needed if such a generator was to be viable in the ACT.

At the same time he was grappling with another issue - a sudden and dramatic rise in power needed by an internal data centre. "It just struck me that the engineering side of it, the modelling of it, there was so much correlation between the two that we should look into it further. The load profile well suited what we were looking for in the gas-fired power station," he said. Providing energy for Canberra's private and government data centres has made ActewAGL aware data centres aren't coping with an exponential growth for computer processing power.

Better technology is making computers world-wide hungrier for power, but data centres struggle to get enough power off the grid for processing. They also need power to keep cool. An extra Unit of power generation requires an extra unit for cooling. Mr Carr thought that instead of drawing power from the main electricity grid, backed tip by costly stand-by power from diesel generators and batteries, a gas-fired generator could be built, giving Canberra its prized back-tip energy supply. Galileo Connect's successful data pod design, which has provided a million square metres of data centres overseas, has been attributed to the design skills of Paul Flatt, who is in Australia singing the praises of ActewAGL's initiative. Mr Flatt said the ActewAGL-Galileo partnership announced this week would become a benchmark for the rest of the world.

"It's only a matter of time for other countries to say, we need to do something similar. Without question it will be a benchmark of the next level of a sustainable data centre." Mr Carr said the idea stemmed from ActewAGL being a unique multi-utility supporting numerous businesses with diverse infrastructure needs. Canberra's IT-based economy was built around information storage for Federal Government departments. "As a commercial analyst you see lots of opportunities," he said. The notion of using data centres to build a business case for a gas generator was explored by ActewAGL's commercial development team, which began looking at the market - dividing it into successes and failures and talking to chief executives in Britain and the United States, as well as independent consultants.

Systematically it looked at how far tip the value chain these people were operating, from the infrastructure level to management facilities, telecommunications services and so on. "We spoke to the market and government agencies who had big data centres. Universally they were telling us the problem was about getting more IT equipment into data centres," Mr Carr said.

ActewAGL's focus reaches well beyond the ACT and Australia to a solution for the global problem. If they got their solution right there was no reason large multi-nationals desperate for adequately powered facilities would not be interested. "And when we look at those high value tenants who have critical IT systems, they cannot afford any period of down time unless they incur massive losses," Mr Carr said. "The key problem they are finding is constraints around infrastructure, dealing with different utilities for different parts of the solution, utilities whose business model doesn't necessarily fit getting involved with these multi-nationals and working with them on a solution." Of all the people consulted by the Canberra utility in its preliminary investigations, CB Richard Ellis, the world's largest commercial real estate firm, stood out with good, balanced information, confirming much of what ActewAGL had already established about the data industry's problems.

CBRE was asked to find the world's best data centre infrastructure partner. A table of candidates was drawn tip and narrowed down before Britain's market leader Galileo Connect was chosen and given the pitch about a gas-fired generator solving the power issue. "Galileo really got it," said Mr Carr. "They knew what the market wanted, they've been working with 500 customers who have a global presence. They knew the constraints around electricity prices, around land, around infrastructure. They knew that well because they were helping their clients with those problems and infinitely got what we were doing. They were more impressed with this than perhaps the other way around because they were having difficulties with other utilities ... banging their heads against a wall. ''They were enthusiastic supporters, they provided us with a lot of support, detailed costings, access to the design, overall market planning. "We could see that we were on the right track."

Galileo Connect, ActewAGL and investor Technical Real Estate have formed Canberra Technology City and have been pitching their plans to large institutions in Melbourne and Sydney this week. Next week they're travelling to Singapore and Hong Kong to test the new data centre model with multinationals and governments whose reliance on computer back-up is growing every week. Technical Real Estate's financial backer is the listed real estate investor and developer Thakral Holdings.

Thakral's managing director, John Hudson believes there'll be no stopping Canberra Technology City's foray into the Asia Pacific. "The way you measure data centres is the amount of watts per square metre (w/sin) they can consume," Mr Hudson said. "Most data centres in the world are capable of achieving 800w/sm, the better ones 1000w/sm. Galileo allows us to deliver 1500w/sin scaleable tip to 4500w/sm."

Mr Hudson said the world's incredible dependence on computers had left old data centres creaking at the seams. Upgrading them creates a new opportunity for Thakral. Mr Flats said Galileo was just entering the Australian market with pre-fabricated data pods, which are tested off site before being assembled on site. All are identical so that their construction and price can be guaranteed.

If Canberra Technology City went ahead it would comprise identical buildings other than tweaks and adjustments, which would have more to do with carpet colours than technology.

The Galileo model has a scheduled assembly of nine months and, according to Bruce McEwen of Technical Real Estate, that is simply unheard of in the industry.

Most data centres take between 18 months to three years to build. "Here we have a unique design with a very superior engineering company with many, many years of experience across Europe that knows what you have to do to make these buildings perform, and that is unique," Mr McEwen said. "We don't have that experience in any country in Asia, only perhaps in Japan."

Mr Carr said the consortium's belief that it has a global solution is now being tested in the market. An anonymous Hume businessman isn't a fan of the project.

He asked how ActewAGL could spawn such a venture when it could not get a return from services provider TransACT, which had cost Canberrans $100 trillion in capital investment.

ActewAGL's chief executive John Mackay said that was absolute rubbish. The Government's investment in TransACT was less than 20 per cent of the overall investment, the rest coming from private investors. "Our primary aim is to get a gas-fired power station in Canberra which will provide security of supply, so that is highly legitimate for a government to support - it's keeping the lights on."

A briefing on the data centre project will be held in Canberra on October 15.