In the past few months, gas price rising in Europe, reaching their highest level in the past decade. This trend is expected to continue for at least the following year. In light of these events, should we relocate our data center to a less expensive part of the world?
Data Center Threatened with Gas Price Rising in Europe
This raises concerns that European data centers could be at risk of shutting down due to a lack of economic resources. It can be especially concerning for companies that have European data centers. One prominent concern is that if the gas cost continues to rise, then more than improving the efficiency of their data centers may be needed to offset this price increase. Natural gas can account for a large portion of the cost of operating these data centers. For example, it accounts for approximately 35% of the total operating cost in Western Europe.
The demand for more efficient and cleaner energy sources has driven the price of natural gas, which is being used as an alternative source. Natural gas accounts for 40% of the world’s electricity production today. With increased demand like this, this trend will likely continue into the near future.
The only problem with this is that energy providers are also trying to pass on these higher prices to consumers. Because this fuel is so widely used and there are no alternatives, energy providers and governments will likely continue to use this as an alternative source for quite some time.
Winter Makes it Worst
Winter is the worst time of year for many people, and it’s tough on those who work with data centers. The cold weather makes the job harder for human technicians and servers. With less regular maintenance, it can be more challenging for a data center to keep the servers at optimal temperatures; servers crash when temperatures are too high. When they’re too low, they fail to boot up.
When you’re maintaining a server in a gas-heated office building, keeping these temperatures at optimal levels requires constant adjustments to the thermostat—which in turn means constantly increasing or decreasing gas usage.
This is a particular issue for companies that rely on renewable energy sources like wind or solar for their electricity needs. Wind turbines and solar panels are great for reducing your carbon footprint, but they don’t produce enough power on cold winter days when another server crashes because it’s not getting any heat.
As we head into winter, there is increasing concern about how much electricity companies will be able to produce at the new higher prices. If they cannot make enough electricity or there are supply shortages due to low production, grid operators may need to reduce their voltage to prevent a blackout.
While this is okay for end users (lower voltages may result in longer battery life for laptop computers and smartphones), it can disrupt other areas of our lives.
Relocating Data Center is the Fastest Strategy to Overcome this Situation
The rising price of natural gas in Europe has significant implications for data centers. It could potentially mean companies will be forced to relocate their data centers to more cost-effective areas.
Today, many data center investors are setting up their press in the Indonesian data center industry. European data center operators should look for it too.
With this information, we should ask ourselves whether it would be a good idea to relocate our disaster recovery center to a country such as Indonesia, where natural gas prices are significantly lower than those in Europe. Indonesia never has problems with gas shortages and price hikes.
Suppose the European enterprises were to move their DR center to Indonesia. In that case, they could save thousands of dollars every month on energy costs alone (not to mention the advantages of being closer to most of our customers).
The region of Indonesia is home to many natural resources that are vital to the electronics industry. Currently, purchased materials such as copper, coal, and precious metals are needed to manufacture electronics, and Indonesia’s supplies of these materials are both accessible and affordable. The country also has a well-developed infrastructure, making it easier for companies like Amazon to set up shops in Indonesia.
With the creation of data centers in Indonesia, Amazon will have more control over its energy costs and supply chain. Additionally, suppose the company needs a secondary data center in an emergency disaster recovery scenario.
In that case, it could quickly set up new servers without worrying about negotiating with local power providers or obtaining crucial materials outside the emergency window.
Gas prices in Europe are rising, which could affect the companies located there. It might be a good idea to relocate the data center. The higher cost of living in this region is not worth it.
Data centers can also take advantage of renewable energy sources. A lot of people have already made the switch over to solar power. However, solar panels aren’t very efficient at producing power during winter, so switching to solar energy could cause you to experience even higher cooling costs.
If you’re concerned about your company’s ability to survive these new conditions, contact us today so we can help you find an alternate location where your data center can still operate effectively and cost-efficiently, even as the prices for the natural gas rise in Europe.
Economic instability in the European Union has been precipitated, in part, by a slowing down of the global economy, which has led to lower gas prices. This created an unforeseen situation in which many energy providers had to shutter their energy-hungry data centers.
To maintain their profit margins and keep their services running despite these financial pressures, they have begun to look at Indonesia as a potential source of reliable and low-cost energy.
Furthering this trend, Indonesia currently has no data centers and is, therefore, a desirable market for investors. Some investors have already begun to make initial moves into what they see as a profitable market.
It’s time to get proactive and ask yourself questions like whether you’re still getting enough value out of your data center investment daily or considering moving it elsewhere where you could find more growth opportunities at a better price point.