Last week in Dutch Financial newspapers ( translated from Dutch by deepl )
I should imagine that’s good news for us
Walter
Sky-high energy prices are hitting data centres that consume a lot of power.
Some have been buying power at a high price for some time, but are not yet able to pass this on to customers.
Clients receive requests to open up their contracts.
Data centres are overextending their cash reserves because they are pre-financing expensive power.
Data centres for the Dutch internet and data traffic are threatened with financial problems because of the sky-high electricity prices. Some of them are asking customers, including hospitals and hosting companies, to break open current contracts so that they can pass on the higher prices. They have little choice.
In the first instance, it is a business risk for the data centres, not for us,' says Ludo Baauw, ceo of hosting company Intermax, which recently received the request to change a current energy contract. But data centres and hosting companies are in a marriage. For us, it is also important that the data centres stay alive. Because our customers are hospitals and governments that cannot suddenly do without computers.' A hosting company rents out computer servers that are set up in data centres.
Since August, the electricity that data centres buy has become almost four times as expensive. At the end of last year, the first data centres already approached their customers, warning them of drastic price increases. But since the Russian invasion of Ukraine, the prices have risen explosively. The smaller data centres explain that they are now running out of money on their contract with us', says Baauw. They themselves pay €0.25 per KWh. To us they charge €0.13 per KWh.'
Experts in the sector compare the situation to the problems at energy suppliers, where the rapidly rising electricity prices have led to bankruptcies. Last year, several small energy companies went bankrupt, including Welkom Energie, Naked Energy and Sepa Green Energy.
All households in a medium-sized city
Data centres keep computer systems running. Virtually every organisation needs them to process data. Even crucial organisations such as hospitals, energy and water companies store sensitive data there. The buildings full of computer servers are major consumers of energy: some need as much power as all the households in a medium-sized city.
The pain is mainly in data centres that buy the power at a variable price, but have agreed a fixed price with their customers. Maasstad Hospital in Rotterdam recently received a request from data centre Bytesnet to break open the current contract. Bytesnet wants to 'return to previous agreements' and be able to adjust the bill each month, according to a hospital spokesperson.
More transparent price model
Bytesnet director Jan-Joris van Dijk confirms that he is writing to clients, but states that he only wants to discuss contract extension. He proposes a 'more transparent' price model, in which his own purchase price and the passed-on price 'match'. There are customers who still pay him the low prices of a few years ago, while he himself buys electricity at today's prices. It hurts us, but we are not falling over', he says.
Ultimately, all parties expect, the higher energy bill will be paid by the end users, from hospitals to hobbyists with their own website.
Pressure on cash flow
Many data centres have contracts that pass on the power bill to their customers. Nevertheless, they also suffer from the high energy prices. We pay the bill in advance', says Stijn Grove, director of the trade association Dutch Data Center Association. We forward the bill, but the money comes in later. The high energy prices put enormous pressure on the cash flow. As a result, data centres also postpone investments that are not immediately necessary, according to Grove. Such as extra capacity and new technologies that should lead to lower energy consumption.
Hosting companies do not rule out drastic price increases. We think that the situation will be very difficult for the data centres,' says chairman Ruud Alaerds of the Dutch Cloud Community, an association for hosting companies. 'Many of our members are anticipating an official letter from their data centre announcing or at least proposing a price review.
Moving
For some customers it pays to move their equipment to a data centre with a better contract. We concluded an annual contract when the prices were still lower', says Wido Potter, of data centre BIT in Ede. This enables him to offer lower prices than competitors with unfavourable contracts.
Customers can also move to, for example, northern Sweden or France, where the relatively cheaper hydropower or nuclear energy is used. Companies that want to expand will certainly look into this,' says Eric Luteijn of Datacenter Works. But connections to the rest of the world are not easy in the Netherlands.
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