Data centers have made it clear they’re willing to pay more for faster access to electricity. But how much more? The value of speed-to-power has been difficult to pin down.
In an October 6 research report, Living on the Edge: The Rise of Distributed Power, Morgan Stanley introduces a new metric that accounts for something conventional electricity cost comparisons overlook: the economic consequences of waiting for power. “Time-to-power is becoming as important as cost-of-power,” the analysts write.
The findings challenge a longstanding assumption in the energy industry: that electricity delivered by the grid is generally the least expensive option. Once the cost of waiting for a grid connection enters the equation, the economics shift dramatically. Technologies that traditionally struggle to compete on price suddenly look far more attractive.
The implications extend beyond the data center industry. Morgan Stanley sees the growing adoption of onsite power creating a cycle of manufacturing scale, technological innovation and falling costs. That could make distributed energy competitive in other commercial and industrial markets, even after the initial data center boom subsides.
