Off-grid data centre powered by tidal energy planned for Scotland

Morgan Stanley scheme sidesteps major barrier to renewables – the long wait for connection to the national grid
Tricia Holly Davis
guardian.co.uk,
Thursday October 16 2008 12.00 BST

A plan to build a large, off-grid computer data centre in Scotland, powered directly by tidal energy, is set to be announced by the US investment bank Morgan Stanley.
The scheme sidesteps one of the biggest barriers to installing renewable energy — the long wait for connection to the national grid. It also addresses the need to find low-carbon ways of powering fast-expanding and power-hungry data centres which house large arrays of servers.
The data centre will be located in Scotland's Pentland Firth, which separates the Orkney Islands from the Scottish mainland, and has huge potential tidal energy resources. The data centre would require about 150 megawatt hours of power, equivalent to that needed to power a city the size of Bristol.
Morgan Stanley, working with Atlantis Resources Corporation, a Singapore-based developer of tidal current turbines, proposes to install an array of tidal turbines in the Pentland Firth. They say the first series of turbines would be operational in 2011. The project's estimated cost is between £250m-£300m.
Initially, the data centre would run on power drawn from the grid. However, once the turbines were installed, the energy would be transferred to the data centre via a private cable, also funded by Morgan Stanley,, bypassing the queue of renewable energy projects awaiting grid connection.
"If you bring industry to northern Scotland you overcome the electricity transmission constraints, while benefiting the environment," said John Woodley, co-head of Morgan Stanley's European and Asian power, gas and related businesses. "Given that data centres need to be built somewhere, it makes sense to place them as close as possible to renewable energy sources that are currently grid-constrained."
Morgan Stanley is aiming to attract customers such as Google, who have fast growing computing capacity needs. Google would not comment specifically on discussions with Morgan Stanley, but said it is actively exploring options to power its data centres with renewable energy.
"The data centre is the key to the tidal project," said Roy Kirk, area manager for the Highlands & Islands Enterprise, the Scottish government's economic development agency for the region. "The biggest barrier for any large-scale renewable energy project is grid transmission."
However, Morgan Stanley and Atlantis must still secure planning permission, another hurdle for renewable energy projects. To date, no large-scale tidal energy project has made it past the concept stage in Britain, while projects a fraction the size of the Pentland Firth proposal, have taken years to come to fruition.
"There are a number of barriers to entry in the tidal market," said Gareth Zahir-Bill from Triodos Renewables.
The specialist investment bank helped to finance the small-scale Marine Current Turbine project, which recently went live in Northern Ireland. "That was 13 years in the process," he said.
A spokesman at the Department for Energy and Climate Change said: "Data centres are significant users of energy, they are responsible for 3% of electricity use in the UK and this is expected to double by 2020."
He acknowledged that grid connection and planning issues hindered the development of renewable energy. "The planning bill currently before parliament will streamline the consent system and our renewable energy strategy to be published in the spring will be aimed at overcoming barriers such as grid connection."
Atlantis can apply for a seabed lease from January 2009. Leases will be awarded next summer. Atlantis must also receive consent from the Scottish government. Morgan Stanley will also need approval from the Highlands Council to construct the data centre and lay the private cable to transmit power from the turbines.
But the ongoing financial crisis will not derail the plan, said Woodley: "The longer term risks and opportunity presented by climate change and energy security remain. We will continue to seek investments that promise scale and commercial viability."