Why do cloud providers keep building datacenters in Phoenix?

https://www.theregister.com/2023/07/15/cloud_datacenters_desert/

by mfiguiere • 3 years ago

129 164 3 years ago

And while at $0.078 a kilowatt, Phoenix's power isn't as cheap as Washington State, which is closer to $0.04 a kilowatt, but it's still competitive, Howard said.

JFC. Meanwhile, Hetzner charges 26 ct/kWh in Finland and 53 ct/kWh in Germany [1]. At these prices (and yes, I'm aware these also include the cooling costs) it's completely inexplicable to me how Germany can ever get actually competitive with US services.

[1] https://www.hetzner.com/de/colocation/

toomuchtodo• 3 years ago

it's completely inexplicable to me how Germany can ever get actually competitive with US services.

Speed of light and data governance laws.

marcosdumay• 3 years ago

Hetzner competes mainly on price. And completely clears the market on that metric.

My guess is it's because the US competitors are run by incompetent people that see no need to improve anything because they have non-competitive lock-in.

unethical_ban• 3 years ago

I thought my 0.10¢ /kWh was a bit pricey. Whew.

What was more shocking to me in that article was that google used 25% of Dallas's water supply.

Between power use and water use, while I appreciate teaching people to be mindful and responsible, I feel like caring slightly less about where I set my thermometer or if I have a long shower when our country's resources are being depleted by big tech and alfalfa shipments to China and almond harvests in California.

martinpw• 3 years ago

What was more shocking to me in that article was that google used 25% of Dallas's water supply.

As someone else pointed out, it is not Dallas, it is The Dalles. Totally different and vastly smaller town.

cloudwalking• 3 years ago

It’s not actually Dallas Texas, it’s The Dalles Oregon. Much smaller town. Bad journalism.

umeshunni2• 3 years ago

I suspect the $0.04 is wholesale pricing. When I lived in WA state, I remember paying closer to $0.10/kWh

Cipater• 3 years ago

Another commenter has pointed out that the claim about Dallas' water supply is untrue.

https://news.ycombinator.com/item?id=36737353

hguant• 3 years ago

Increased regulatory burden for US companies, increased labour enforcement targeting foreign companies in general, and preferential treatment for DE/EU companies codified in law.

Ylpertnodi• 3 years ago

increased labour enforcement targeting foreign companies in general

How? And can you provide any examples?

VWWHFSfQ• 3 years ago

Increased regulatory burden for US companies

EU is actually doing the opposite because they don't want to be cut off from the US internet companies. For instance, now allowing EU citizens data to be transferred to and stored in the US.

sclarisse• 3 years ago

Easy. Nuclear.

Oh, wait … you’re telling me they just phased that out? :(

But yeah, as it turns out energy prices matter; it’s not just corporate overlords of the fuel companies spreading astroturf when people point out the still-high costs of using renewables. It matters to homes and cars and industry too, and when energy costs more, the nation will have less.

mx20• 3 years ago

They now buy from the Nuclear Power plants a few km nearby the German Borders. The Prices are that high because of Taxes. They also probably get cheaper Industry Prices for electricity, but aren't allowed to resell that cheap energy to their customers.

mqus• 3 years ago

The myth that nuclear is cheap needs to die[1]. Nuclear is only "cheap" because of government subsidies that mandated its low price per kWh. The actual cost is far above most other options. So if we subsidize anyways, why not subsidize cheaper energy production methods?

[1] https://en.wikipedia.org/wiki/Cost_of_electricity_by_source (but also take a look at https://www.oecd-nea.org/upload/docs/application/pdf/2020-12... from the IEA/NEA)

immibis2• 3 years ago

The actual cost of renewable energy is barely relevant. What is relevant is that German energy politics has been dominated by Russian oligarchs who want nothing more than to sell Germany as much natural gas as possible. This high cost is not the cost of renewables, because they don't have any - it's the cost of non-renewables meant to be sourced from Russia, and the cost of replacing those with non-Russian sources or Russian laundered sources.

yuliyp• 3 years ago

You're comparing apples and oranges. The cost you're paying Hetzner is not just for the power they are buying from the electric company, but the cooling of that same number of watts as well as other building maintenance, networking, etc.

nik736• 3 years ago

Also note that this is Hetzner, a cheap provider. I am paying 65ct in one of the big data centers in Frankfurt.

wkat4242• 3 years ago

Don't forget we have a huge energy crisis right now due to the cutting of Russian gas. It's not directly affecting electricity production but overall energy pricing is severely affected due to people switching away from gas.

davidzweig• 3 years ago

I was planning on renting a 1/3 rack at Hetzner Finland, but power is cheaper in Bulgaria now (I'm in Bulgaria). Currently 19c/kwh for businesses and looking like it's coming down still (used to be closer to 10c I believe). It's also 80% nuclear/renewables, better than Finland, seems.

I have three Asus ESC8000 G3 with 8*3080 GPUs each. I have been hosting in the basement but looking at colocation or renting a space. Colocation pricing doesn't seem to favor power-hungry GPU servers though.

I have a source for cheap Asus ESC8000 G3 and cheap 3080 turbo cards, in case anyone needs to set up machines for ML inference, mail me.

genewitch2• 3 years ago

In all the datacenters i've used in the US they don't charge per kwh, they charge per max amperage, so you can get dual 15A 240VAC or dual 45A or whatever you need, and that's baked into the cost. Each rack has a power budget due to cooling concerns, etc.

On the one hand, the bill is always the same amount, regardless of power consumption. On the other hand, you gotta make sure you use your power budget or you're wasting money.

miguelazo4• 3 years ago

Why do you think Germany was so keen on getting more cheap Russian gas, and why the US was willing to do anything to stop it?

drdrey• 3 years ago

And while at $0.078 a kilowatt, Phoenix's power isn't as cheap as Washington State, which is closer to $0.04 a kilowatt, but it's still competitive, Howard said.

what kind of writing is that? It’s unreadable, in addition to mixing kW and kWh

personjerry• 3 years ago

Also commentary like "The crux, of course, is water."

WarOnPrivacy• 3 years ago

As far as using up their allotment of commas, you may be right. Past that it seems to stand okay.

dylan6047• 3 years ago

From the off, commentary is set as the standard:

"With more than a hundred 100F (37.7C in non-Freedom units)"

gruez• 3 years ago

You missed the paragraphs leading up to this, which mentioned tax incentives. What they were probably trying to say was that the tax incentives were good, and the even though the electricity prices weren't the lowest in the country, the two combined makes it an unbeatable combo.

tredre3• 3 years ago

I think drdrey was talking about the dubious usage of commas that makes the sentence hard to ingest, not the content per se.

furyofantares• 3 years ago

It's that the structure of the sentences is garbage. I don't think the one quoted here is even the worst offender. Every comma in this article is an adventure. Some of them are okay, some should be deleted, and some should be periods.

rhaway84773• 3 years ago

Which is fantastic because Arizona will then make up that deficit by pulling in federal funds, part of which will disproportionately be paid by residents of Washington.

meindnoch• 3 years ago

mixing kW and kWh

Journalists are journalists for a reason. (They aren't that much into STEM, if you know what I'm saying)

umeshunni2• 3 years ago

If they knew the difference between kW and kWh, they wouldn't become journalists.

ghaff4• 3 years ago

You realize that tons of software engineers make mistakes and aren't really all that smart either?

seatac76• 3 years ago

Agreed, really shoddy tech website writing.

gymbeaux2• 3 years ago

Damn I’m paying 0.104/kWh in Jacksonville, FL. We have a public utility company (JEA) that NextEra Energy (FPL’s parent) has been trying to get its hands on. They promise lower rates, yet in parts of Florida where FPL is the utility company, people often complain of the high rates. I believe FPL’s rate is technically lower than 0.104 but is higher in practice when you factor in all their bullshit fees.

lotsofpulp• 3 years ago

A residential user in Washington is also paying ~$0.10 per kWh, total cost divided by total kWh.

callalex4• 3 years ago

Here in California we pay between $.4 and $.5 and they are going to raise the prices again next year. It’s really, truly insane.

mvf4z7• 3 years ago

Detroit checking in. I pay anywhere bewteen $0.182/kWh to $0.237/kWh (varies depending on time of day).

Furthermore, our electric utility has some of the worst reliability in the country. Riddle me that. Some of the most Detroit shit I have ever heard.

lostlogin9• 3 years ago

The article has been changed now I think, it’s in kWh.

dubcanada2• 3 years ago

I guess the answer is regions. If they built all their DCs in Washington there wouldn't be any DCs in south middle area of US. And since temperatures are largely based on proximity to the equator, it would mean zero DCs near the equator.

But I really don't know what the article is implying. We should built zero DCs anywhere hot? Or DCs use lots of resources, like water and power which are in short supply in deserts?

jononomo2• 3 years ago

If you go near the equator but go up in altitude then it won't be hot. There are places in Costa Rica and Columbia where it is basically 72-degrees every day all year.

cannonpalms• 3 years ago

I wonder what impact cosmic radiation has at those altitudes. I seem to recall experiments somewhere in Colorado that demonstrated a need for ECC, etc.

dubcanada2• 3 years ago

True, but wouldn't water be harder to get? From my understanding tops of mountains would have significantly less water reserves than valleys. Although they may have more then deserts...

konschubert2• 3 years ago

Deserts are great for power since you have space and sun for Solar

ghaff4• 3 years ago

That area of the country is also pretty seismically stable and generally doesn't have other sorts of natural disasters. (Some wildfires but not everywhere.)

fhsm• 3 years ago

And has a lot of sunny days - whether falling in your crop or your panels.

mgw• 3 years ago

The Register misquotes itself by writing that “Google's datacenters in Dallas, Texas consumed more than a quarter of the city's water supply”.

Clicking through to the quoted article [1], the figure is actually for The Dalles, Oregon, a city with a population about 80 times smaller than Dallas’.

[1] https://www.theregister.com/2022/12/19/google_datacenters_da...

briffle• 3 years ago

Google in The Dalles, OR site also uses much less water than the Aluminum smelter that used to be at their current location.

feoren• 3 years ago

That's like saying they're lighter than the moon. Your fact is more about how unbelievably resource-intensive aluminum smelters are.

dylan6047• 3 years ago

From personal experience, most auto-fill fields will correctly find Dallas for "dal", but will quickly update to Dalles for "dall". Which is weird since "dalla" comes before "dalle" alphabetically which makes me think their "learned" use implies more people looking for Dalles type "dall".

I've been caught out by this on multiple occasions.

jlarocco• 3 years ago

It's not too weird...

If it offers up "dallas" for "dal", but the user keeps typing, then it's reasonable to assume "dallas" wasn't what they were looking for, or they'd have picked it after "dal".

rollcat4• 3 years ago

Every time I want to launch Photos.app or Photo Booth.app through Spotlight, it keeps flicking between one and the other almost with every key press... then when I think it's done, and am about to press enter, it updates the top result a millisecond before I hit enter.

snowwrestler• 3 years ago

And The Dalles, unlike Dallas, has a huge source of water available: the mighty Columbia River, currently flowing 140,000 to 240,000 cubic feet per second (cfs). (Snowmelt causes daily surges.)

The Trinity River at Dallas, TX is currently running at 400 cfs, LOL.

shawndrost• 3 years ago

This makes the datacenter out to be a massive water user. Which it is, in some sense. It's also worth considering that this volume of water usage -- 274.5 million gallons per annum, or 842 acre-feet -- is about 1/3 that of an average-size (445 acre) farm.

irrational• 3 years ago

You mean The Dalles that sits on the banks of the humongous Columbia River? That’s the one they are worried about using too much water? The Columbia River pours more water into the Pacific Ocean than any other river in the Western Hemisphere. Are they worried about the Pacific Ocean going dry?

michaelcampbell• 3 years ago

I get that it's common usage (and that's what language basically is), but when I see "80 times smaller" my brain screams "80 times what? Wouldn't `1 times smaller` be zero?" Yes, brain, yes it would.

bob1029• 3 years ago

Is it not possible to run a datacenter completely dry by making certain compromises?

ghaff4• 3 years ago

I'm going to say only by consuming vastly more electricity to dissipate the heat using closed loop systems. (And probably not completely in any case.)

gottorf• 3 years ago

They're talking about some special evaporative cooling system. Thousands of datacenters around the country run on garden-variety HVAC systems that don't require any water, just regular refrigerant.

re-thc• 3 years ago

Data centers live off connectivity. You can't just build it anywhere. It's not just about the cloud provider.

What about other cloud providers, ISPs, exchanges, peering endpoints, etc? There needs to be good fiber routes to other cities or data centers in the region.

You can't just pick a random city and hope AT&T, Verizon, NTT or whoever would turn up. You can surely pay for it but then that might cost more than the power and other concerns. If there's not enough bandwidth you wouldn't even survive a DDoS attack.

britzkopf• 3 years ago

But I often think surely there must be some viable economic model in which a data center is built in some remote area with plentiful hydroelectric or geothermal power that would largely go unharnessed, and that cheap source of power makes building specific connectivity infrastructure to that location feasible, no? Someone correct me...

immibis2• 3 years ago

There is, it's called Bitcoin mining.

latchkey2• 3 years ago

Note the number of datacenters in Quincy, WA and the Coinmint facility in Massena, NY.

coding1232• 3 years ago

Every time these kind of stories come up, I just think of that guy in Chandler, AZ that just hears wump wump wump wump of the air conditioner all year round. I feel for him. Hopefully he moved.

s3p3• 3 years ago

Unfamiliar with this.. what happened?

coding1232• 3 years ago

Well, I tried to find the specific story but I can't. However since that article first came out, apparently it highlighted the issue and now articles like this seem to be coming up:

https://www.azcentral.com/story/news/local/chandler/2021/11/...

It's one of those things that once you hear it, you can't un-hear it.

yellow_lead• 3 years ago

The answer:

Of course, all the property, tax incentives, and power you ever want won't do cloud providers much good if it's in the middle of nowhere. Latency is still a factor and cloud providers like to spread their datacenters out to serve broad geographic regions. In the case of the Phoenix, that's the American Southwest, which is home to just shy of a fifth of the US population.

I'm kind of put off by the title - which sounds as if they should not build in hot areas. It should be "Here's why cloud providers keep building datacenters in the America's hottest city"

s3p3• 3 years ago

Exactly. The article is just saying random things. The title and body have no logical connection to each other, and it reads like it is trying to second guess itself on every point it tries to make.

sremani2• 3 years ago

American South West is Vast expanse. Depends on how you count it too. If DFW, Austin, San Antonio count as American South West for that 20% number, which is arguable, the Phoenix location does not make sense.

Phoenix datacenters are largely a SoCal play, the cost of investing in SoCal versus on the other side of the border with tax incentives a bit more business friendly environment and near zero land costs (compared to Coastal California metro).

When it comes to water management, the desert towns like Las Vegas, Phoenix do a far better job than coastal cities.

note: 80% of American population lives East of 98th parallel, that is roughly East of I-35 and majority of the remaining 20% is along pacific coast.

kibwen3• 3 years ago

If DFW, Austin, San Antonio count as American South West for that 20% number, which is arguable, the Phoenix location does not make sense.

Right. As measured from the center of the Texas triangle, Phoenix is 915 miles away. Chicago is 910, and Jacksonville, FL on the Atlantic ocean is 900.

miguelazo4• 3 years ago

Do not put Phoenix and Vegas in the same category for water management. Vegas has done a decent job, Phoenix, and the sprawling suburbs around it, have done a terrible job and are in for a very rude awakening.

coffeebeqn• 3 years ago

I’m curious why they use water instead of solar and AC with good insulation. Cheaper?

bobthepanda• 3 years ago

Sufficiently big AC systems often use water cooling because water is more effective at transferring heat than air, is cheaper than other liquids, and unlike other liquids is not a massive safety hazard if it leaks.

It is why if you want to defrost something quickly, leave it in water rather than in the open air.

xwowsersx2• 3 years ago

Basically, yes. It's about cooling efficiency, cost-effectiveness, practicality and scalability. Water has excellent heat transfer properties, which allows for efficient cooling. As I understand it, solar will have limited capacity and depend on sunlight availability..which obviously fluctuates based on weather conditions, whereas data centers need continuous power supply. Also, cost of installing a large-scale solar power system and maintaining battery storage can be high.

hinkley3• 3 years ago

Don’t homes in Arizona mostly use swamp coolers? They’re more efficient as long as you have a water supply

Hell my high school in Illinois had one. If you stood in the wrong spot some days you’d get spritzed because it wasn’t quite evaporating everything.

s3p3• 3 years ago

This article made me dizzy. It keeps going back and forth and destroying every point it tries to make.

A state bill signed into law in early 2021, extended tax breaks on the use, installation, assembly, repair or maintenance of datacenter equipment, for most Arizona datacenter However, cheap land and favorable tax incentives aren't the only thing cloud providers are looking for.
Access to power is another important factor. Phoenix's power isn't as cheap as Washington State
Phoenix, that's the American Southwest, which is home to just shy of a fifth of the US population. However, proximity won't do much good if you don't have adequate connectivity to support them.

polio• 3 years ago

Would it make sense to build a datacentre underground to help with cooling?

sparker72678• 3 years ago

It is typically much more expensive to dig down than build on the surface, and in the Phoenix area ground temps are still very warm. A well insulated building on the surface will be easier to build, maintain, and won’t require significantly more energy to keep cool.

(And with a data center, the majority of the heat is coming from inside the facility, not the environment outside.)

callalex4• 3 years ago

Heat that builds up underground doesn’t really ever leave and eventually causes big problems. Here is a recent example in Chicago: https://www.nytimes.com/2023/07/11/climate/chicago-undergrou...

on2k17nm• 3 years ago

Just like how global tech companies rent out facilities build on lakebeds in Bangalore, India :-)

hinkley3• 3 years ago

Thermally there are spots in western Colorado or eastern California that would be better. The problem is that if you look at maps of major internet thoroughfares in the US, there aren’t many going through Colorado. Which is probably more Kansas’ fault than Colorado.

cashsterling• 3 years ago

This points to the overall conversation about how fresh water is valued. If the sliding scale for fresh water prices was more aggressive, this would change the design of cooling systems for industry and large buildings.

It is straight forward to design air-cooled refrigeration systems... even for operation in very hot/desert environments. With this in mind, I think pricing water to make it more cost effective to use water cooling towers, rather than entirely air cooled systems, is very poor policy. The amount of water used to provide cooling for Las Vegas, for instance, is absolutely ridiculous.

hnburnsy• 3 years ago

Not mentioned is the lack of natural disaster threats. No winter storms or wild fires or earthquakes or tornadoes or hurricanes.

Why do cloud providers keep building datacenters in Phoenix?

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