00:00This is a story about robbing Peter to pay Paul.
00:03Even as continental Europe struggles with too much electricity coming from the sun,
00:08Scotland is contending with too much coming from the wind,
00:11forcing turbines to be turned off when the grid can't handle the electricity being generated.
00:16And it has come up with a very different solution.
00:19Scotland is building data centers to consume the excess electricity.
00:23Our colleague Simon Hampton brings us the story from a proposed data center site in Scotland.
00:31So Ravenscraig sits just at the east of Glasgow.
00:34It's 1,200 acres and was once Europe's largest steel strip mill.
00:40Motherwell was once known as Scotland's steel capital,
00:43but today it's undergoing a massive reinvention that hopes to turn brownfields into data centers,
00:49the factories of the digital age.
00:51Michael Hunter is the head of commercial at Apertura,
00:55who are contracted to build a data center here in Ravenscraig.
00:58From a data center perspective, there's a massive opportunity here
01:02to create economic stimulus that this part of the country needs
01:07and to not only unlock the compute, the 550 megawatts,
01:12to bring in significant capital investment.
01:15While data centers in rural towns are now a common experience for much of the developed world
01:20and are raising the hackles of some communities in the US and Europe,
01:24Apertura's data center development is unique in the way it plans to be powered,
01:30tapping into Scotland's most abundant resource, wind.
01:35So we're in a very unique situation here whereby we have two connections in very close proximity to the site.
01:41So one near a hill to the north and one at Whishaw to the south.
01:45These are grid-connected assets,
01:47so flow through from the offshore wind that Scotland has in abundance
01:52that we can then be utilizing to power the next generation of industry in Scotland.
02:00In most places around the world, data centers are struggling to secure enough energy to meet high power demands,
02:07putting them on a collision course with the local governments.
02:10In Scotland, the opposite is true.
02:13The so-called windbreak of Europe is generating too much energy,
02:17leading to a costly problem known as curtailment, or turning wind turbines off,
02:22where instead of the consumer paying the utility company to use electricity,
02:26the utility pays the wind generation company not to provide electricity that the grid can't handle.
02:33Last year, the UK spent £1.8 billion curtailing wind generation,
02:38with some estimates predicting that will rise as high as £8 billion by the end of the decade.
02:43It's becoming more commonplace.
02:46Because we've seen renewables deployed so rapidly,
02:49system capacity has become increasingly stretched.
02:52Peter Osboldstone is the research director at the energy analytics firm Wood Mackenzie.
02:58I think last year we saw about 8 to 10 terral hours of curtailed wind in Scotland,
03:05and that's about 10% of the available wind resource in the year.
03:09That is a massive amount. Why has it gotten to that point?
03:12It goes back to the pattern of development, where the capacity is.
03:15So, in a fleet of maybe 30 to 35 gigawatts of installed wind generation in GB,
03:23about 14 gigawatts of that is in Scotland.
03:26Scotland has about 10% of the national power demand,
03:30so a lot of that wind generation needs to be shifted further south.
03:33So, we hear about these data centres locating themselves close to wind turbines and where that energy is generated.
03:41What are the benefits that that provides?
03:44So, most of those data centres proposals are through Scotland's central belt and down towards the airship on the east
03:51coast.
03:52The curtailed winds, or the most curtailed projects, are offshore wind projects on the east coast.
03:57The key point here is you're connecting the excess supply with new demand,
04:04which is the right side of the system constraint.
04:07The system constraint is further south, so you just need to stop power from flowing across that constraint.
04:13If all the power generated by Scottish wind farms could be distributed throughout the UK,
04:18there'd be no need for curtailment.
04:20The problem is that the grid doesn't always permit the power generated to get where it needs to be used.
04:25Most UK data centre proposals are here, where Scotland connects into the rest of Great Britain's transmission system,
04:32like a traffic zone where multi-lane highways merge into one,
04:36a common spot for grid congestion that leads to curtailment.
04:39The real problem that Scotland, and indeed the UK, has just now is not a generation problem,
04:45but it's more of a transmission problem.
04:47So with all of that wind generation, when there is nothing to actually utilise the power
04:54when the wind is blowing, it results in curtailment costs.
04:58And what we're looking to do here is to put demand for that electricity strategically in places
05:05that then reduce those curtailment costs,
05:08ultimately providing compute to the people of the UK while lowering their household bills.
05:14And if they can lower curtailment costs, who benefits from that?
05:20So curtailment costs come in two parts.
05:23We're spending at the moment in the GB system, NESO, the system operator,
05:27around $350 million per year to turn off Scottish wind.
05:32But if you turn off a generator somewhere,
05:35the system operator also has to turn on a generator elsewhere.
05:38The system has to stay in balance.
05:39So they're also spending about $650 million a year in turning other generators back on
05:44south of the border, essentially gas by a generation in England.
05:49But that would be a whole of Britain benefit if you lower those costs.
05:53It's not a local...
05:54Absolutely.
05:54And those costs flow through, at the end of the day, to consumer bills.
05:58So the benefits of reducing curtailment is a lower system cost feeding through to consumer prices.
06:05In theory, building data centres to tap into Scotland's surplus wind power
06:10and reduce curtailment costs might sound like a perfect solution.
06:14But data centres need power around the clock, and the wind doesn't always blow.
06:20Can curtailment alone power this data centre?
06:23So it's a really important question to think about.
06:26I think it's worth breaking it down into component parts.
06:28So the first bit is on the 550 megawatt compute itself.
06:33So the UK, like the rest of the world, is in need of this data centre capacity.
06:38With everything that's going on from general technology adoption,
06:43absolutely magnified through what's happening with AI,
06:46there needs to be that compute somewhere in the UK.
06:49What we're looking to then do is to site those data centres in places
06:55that have a minimum impact from an environmental perspective.
07:00And that includes putting it as close to where the renewable energy is being generated.
07:05So, as I say, then minimise that impact.
07:09It's part of the solution.
07:11Whether it's in isolation, it certainly isn't a perfect solution.
07:14The scale of interest in potential data centres in Scotland, 7 or 8 gigawatts,
07:21compares to maybe 4 or 5 gigawatts of peak demand for electricity in Scotland at the moment.
07:27So it's massive potential developments.
07:30That's not to say it will all go ahead.
07:33So, yeah, 24-7 electricity.
07:35And when the wind isn't blowing, low wind speeds or no wind speeds,
07:40that power needs to be made up from other sources.
07:42So that's drawn from the wider network,
07:44potentially reversing flows that are typically north to south at the moment.
07:48The other potential, and this is a concern for opponents of large-scale data centres,
07:54is that data centres start to use their own on-site generation, maybe gas generation.
07:58So there are issues there and concerns around emissions as well.
08:03Scotland has seen a surge in data centre proposals,
08:06but critics say most are speculative and raise concerns about the plausibility of tapping into curtailed wind,
08:13with the Environmental Group Action to Protect Rural Scotland saying,
08:16There is absolutely no plan from the Scottish Government on how the 7 gigawatts of proposed demand
08:22would be able to be delivered in a country with a peak energy demand of 4 gigawatts.
08:27But the UK's energy minister said they are consulting on ways to secure capacity
08:32by aligning data centre connections to regional infrastructure,
08:35adding,
08:44The UK's tech sector agrees.
08:47Matt Evans is the chief operating officer of trade association TechUK.
08:53There are an abundance of renewable energy sources in the UK, particularly up in Scotland.
08:58Do those present an opportunity for the data centre build-out?
09:02Definitely.
09:03And the reason for that is, quite often we're paying those renewable assets to turn off.
09:10You know, that doesn't make a lot of economic sense to do so,
09:13particularly if you can build data centres that can take that off-take from those renewable energy sources.
09:23That both increases the economic security of Scotland and the UK as a hool,
09:29but it also solves some of those curtailment costs as well.
09:33The challenges is, of course, why do we build data centres where we build them?
09:38And historically, that's been really sort of proximity to the customer-driven.
09:42You know, latency matters at the end of the day.
09:45Geography, even in the digital world matters.
09:49But that relationship is changing and is loosening a little bit as we move,
09:54not just from sort of cloud, but into AI inference.
09:59The prospect of using all that Scottish wind to power data centres
10:03may provide a solution to having too much power in the wrong places and at the wrong times.
10:09But Evans says it could also help the nation find a strategic edge in the AI race.
10:15I think what we should be aiming for is firstly the capacity to be able to service our own market.
10:22And as I said, vacancy rates at the moment are down to historic lows.
10:28So we need to be able to meet the demand from the UK economy and the UK public sector.
10:33So that's sort of a big challenge.
10:35But then it's also in terms of what type of economy do we want to be in.
10:40Clearly that is one that is being AI enabled and being driven.
10:45So we need to continue to drive investment into the UK,
10:52to continue to attract investment into the UK,
10:54to build out these economic infrastructure assets really.
11:01From a data centre perspective, there's a massive opportunity here
11:05to create economic stimulus that this part of the country needs
11:10and to not only unlock the compute, the 550 megawatts,
11:15to bring in significant capital investment,
11:18but also to allow Ravenscraig to be developed
11:22for 2,000 additional homes to be built
11:25and for the amenities that go alongside that,
11:29primary schools, retail facilities.
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