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Microsoft intentionally waste $70k of unused electricity

microsoft datacentre

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#1 BenW

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Posted 28 September 2012 - 12:00 PM

Microsoft intentionally wasted $70,000 of electricity at one of their datacentres recently, which would otherwise have been unused.

The justification was that their contract with the electric company requires them to use at least a certain amount of power, or pay a $120,000 fine.

Full story on Engadget.

Do you think MS was justified in their action? Economically it was the better choice, but it's not the best message to send environmentally. Personally I don't think electricity companies should be allowed to set contract terms like that in the first place.
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#2 gregwarner

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Posted 28 September 2012 - 12:37 PM

I'd like to know exactly what the electric company's rationale was behind it's minimum required usage? If one of their customers doesn't use some power, doesn't that mean more power for everybody else? (I'm not an electrical engineer. I don't know the answer to this!)

But it doesn't sound like MS is at fault here. It sounds more like the electric company's fault. I'm sure MS wasn't the one to propose a minimum usage with a fine on themselves for failing to meet it. That sounds more like something a greedy provider would come up with, not the customer. (MS is the customer in this sense.)

Too bad MS will take the blame for it, though. They're so easy to target. It's much more difficult to blame a nameless electric company.
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#3 Chall

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Posted 28 September 2012 - 12:38 PM

Well, my guess on why they exist is so that a company can "reserve" electricity for themselves, so that they will always have access to at least that much. But, if the company isn't using all of that energy, they probably fine them for making the electric company produce extra to maintain what MS had left in terms of the contract. Sorta like how a fish salesman would reserve a fish for the customer, but the customer never comes to get the fish, so it rots. Now the salesman has a rotten fish, and it may have cost him some customers who may have wanted that fish, so he asks for more than the usual for wasting his time. This is just a guess though.
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#4 BenW

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Posted 28 September 2012 - 12:39 PM

That makes sense. Anyone know what happens to electricity if it isn't used? I assumed it just sat there in the grid until it was needed (kind of like a battery) :)
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#5 gregwarner

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Posted 28 September 2012 - 12:41 PM

Well, my guess on why they exist is so that a company can "reserve" electricity for themselves, so that they will always have access to at least that much. ... This is just a guess though.

That's a good guess.

So in that case, who's "fault" it is really boils down to MS over-estimating how much electricity they'd use, and they over reserved? So they're at fault for using less electricity?

I'm just being cynical because I know the general public will spin any situation, no matter which way it goes, to villainize MS.

That makes sense. Anyone know what happens to electricity if it isn't used? I assumed it just sat there in the grid until it was needed (kind of like a battery) :)


I come from southern California, where we'd have rolling "brown-outs", where they would temporarily reduce the voltage going to a particular section of town because there wasn't enough electricity to go around. I see things from that perspective. I've never considered what would happen if there were too much electricity on the grid. I suspect the wires would bulge outward where the pressure was greatest, and possibly spring a leak, spraying excess electricity onto the ground. :biggrin:
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#6 Chall

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Posted 28 September 2012 - 12:43 PM

That makes sense. Anyone know what happens to electricity if it isn't used? I assumed it just sat there in the grid until it was needed (kind of like a battery) :)

I have been taught that electricity is the movement of electrons through a conductive material. If that is the case, then there has to be a limit to how much you can flow through them at any given time. This also applies to batteries, which is why you can't recharge your laptop for a year and expect enough battery life.
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#7 Upstream

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Posted 28 September 2012 - 01:59 PM

I'd like to know exactly what the electric company's rationale was behind it's minimum required usage? If one of their customers doesn't use some power, doesn't that mean more power for everybody else? (I'm not an electrical engineer. I don't know the answer to this!)

But it doesn't sound like MS is at fault here. It sounds more like the electric company's fault. I'm sure MS wasn't the one to propose a minimum usage with a fine on themselves for failing to meet it. That sounds more like something a greedy provider would come up with, not the customer. (MS is the customer in this sense.)

Too bad MS will take the blame for it, though. They're so easy to target. It's much more difficult to blame a nameless electric company.


First and up front I would like to say it is a wrongful thing to do, wasting energy in these modern times. As for the business/economic take on this case I think it can turn out to be a rather expensive cost saving. Big companies like MS by policy invest a lot of time and money in working more durable and bad press can undo millions invested in a few days. Bad call I think.

For the power company I think they usually have to buy and sell energy on commodity markets. This probably involves things like futures, options etc to hedge (protect against) financial risks. It could be they already bought the energy in advance for a certain price and covered this expense with the contract with MS. This fine could be a way to prevent customers to buy power elsewhere when prices go down leaving the supplier behind with longterm contracts with prices above market prices. If the fine gives a large enough spread 50K in this case (120-70) it does not make dropping market prices attractive as it does not outweigh the fine.
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#8 Orjan

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Posted 29 September 2012 - 03:26 AM

To answer what happens to non used energy:
The grid is loaded with exactly the amount of energy used at each moment, regulated by the grid control centre. There is at any time not produced more energy than it is used, all controlled by computers of course, predicting what will happen the coming seconds all the time. At certain times, control engineers, overseeing the computers, overrides to make a smoother change, for example at period pauses of super bowl, they know the energy usage increase heavily compared during the very play. (Ppl making snacks, toilet visits and much more demanding more energy).

Many power companies buy time limited bulk packs of power from producers (them selves or others) to serve their customers with, based om predicted usage at time periods and then if the power of those bulks isn't used by their customers, they need to pay for it even if not used. This is why the fine of not using enough power comes in place.
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#9 BenW

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Posted 29 September 2012 - 05:10 AM

Thanks for the explanations Orjan & Upstream. It's a shame that it works like that - because saving power ought to be something companies are encouraged to do!
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