Industrial Power Basics

In order to understand the power efficiency of New School Mining, it’s important to understand the basics of power in industrial spaces, including 3-phase power, Voltages and providing a basis to understand the rationale behind all of our choices. We’ll also talk a bit about how power distribution in the power grid works. With this background you should be able make better choices about the power layout of you mining operation.

Watts, Volts and Amps, oh my…

Let’s start by talking a bit about Volts, Amps and Watts. Your typical home outlet provides 120 Volt AC power. In your home you will also have other derives like ovens, dryers, and furnaces that take 240 Volt Power. The reason for the high voltage is to reduce the amps needed to power the device. To explain the reasons for this, let’s backup and recap some basic electrical theory from physics. If you recall, the total amount of power a device consumes is measured in Watts, and we can calculate Watts if we know the Amps and Voltage a device takes. The formula is:

Watts = Volts * Amps

Some simple algebra and we can also calculate Volts or Amps if we know 2 of these 3 values. These are as follows:

Volts = Watts / Amps
Amps = Watts / Volts

So back to why your dryer takes 240 Volt power… It takes 240 Volt power to reduce the Amps needed to power that device. A typical dryer uses a breaker rate at 50 Amps. So that plug is able to deliver 240 * 50 or 12,000 Watts of power. We’ll refer to this as 12 kilowatts or 12 kW. If that device was powered with 120 Volt power, we would need 100 Amps to provide enough power to run the dryer. The larger amps mean we also need larger wire to provide that power. As amps increase, so does the wire size, but voltage can increase up to 600 Volts and we can use the same wires as long as the amps don’t increase. A great visual that shows wires size to amps for common types of wires can be found here.

So a dryer at 240 Volts needs a 8 gauge wire, while at 120 Volts would need a 3 gauge wire. A cost of $0.27/ft vs $0.79/ft. The other factor with larger amps is as cables get longer there is more resistance and therefore, you need to upsize the wire to handle longer runs. In our case here, the 50 Amp 8 gauge cable can go 100 ft before needing to be up sized, where the 100 Amp 3 gauge cable will only go about 75 ft before needing to be up sized. In a typical home these distances are usually not a factor, but is larger industrial building this becomes a big factor. For this reason, it is common to see higher voltages in industrial buildings. The specific voltages vary around the globe, but here in the US, the typical voltages are 480 Volts and 277 Volts. Before we go into this too much, we also need to talk about one other major difference between typical home power and industrial power and that is 3-phase power.

The typical home power system is referred to a single-phase power. In this system, there are 3 wires that carry power into your home. These are referred to as two hot wires and a neutral. If you look at the power pole near your home (if you have one and the wires are not underground) you will often see only two wires there. These two wires are a very high voltage hot wire, and a neutral wire. The neutral wire’s job is to take any unused power and provide a path for that power. So, the term single-phase is because there is just one hot wire that provides power to the home. However, the transformer that converts very high voltages to the typical household voltages of 120V/240V actually produces 2 hot wires and a neutral. So at the time power enters your house, it’s really a 2-phase power system. What that means is that if you measure the voltage between either hot wire and neutral, you will get 120V, but if you measure the voltage between the two hot wires, you get 240V. To understand this you have to look at the AC waveform generated by the transformer on the pole. [insert waveform]. But really you can just remember the fact that hot to neutral is 120V and hot to hot is 240V.

Phases

Again, if you look around at power poles you will often see large ones that have 3 main wires. These are 3-phase power and that is the type of power that most industrial building have brought to them. On these power poles there is actually a neutral wire also, which is often a smaller wire on the very top of the pole. With 3 phase power, we actually have 3 hot wires. And again on the power poles, we will have very high voltages with transformers to convert down to lower voltages. However, these transformers will be much larger and typically can’t fit on the poles so are located on the ground somewhere. Also these transformers will take the 3 phases in and convert voltages but not add a phase like the home transformers do. So these are truly 3 Phase in and 3 Phase out.

The most common type of 3 phase power is 208V/120V. In this system the voltage between any of the 3 hot wires and neutral is 120V. This makes it compatible with standard home appliances and devices. However, if you have a device the expects 240V power that is not easily available in the industrial space it would require a special transformer to make that power. Now if you measure between any hot to hot pair in this 3-phase power system you will get 208V. The value of this is not a random choice is a specific ratio that is based on the nature of the AC waveforms used in 3-phase power. But without getting too deep into waveform phasing, let’s just remember that the ratio is always going to be the square root of 3 or 1.732.

So, we’ve mentioned a few times that the power poles have very high voltages. These range from 1000’s of volts to 500,000 volts in some cases. The reason for these high voltages relates to the dryer. These poles are carrying millions of watts of power or Mega-Watts (MW) of power. If they did so at 120 Volts, one MW would be 8333 Amps and that wire would probably be a wide as a car. However, at 500k Volts one MW is just 2 Amps and can therefore use a very small wire even at long distances.

So, in larger industrial buildings, you will often see a 3-phase power system, referred to a 480V/277V. In these buildings, this power is brought into the building and used for large appliances like AC units, fans, manufacturing equipment and lighting. Yes, in these buildings some lighting will actually run on 277-volt power through the use of transformers designed for this higher voltage. In these buildings you will also see a transformer inside the building that is designed to covert the 480V/277V power down to 208V/120V power. This is typically referred to as the high voltage and low voltage supply.

Demand

How power charges are calculated varies by different utility companies, so it is important to research their price structure and figure out what your real power cost will be. In our location, there are actually several different schedules that we can be on. The effective price per kWh can vary significantly across these schedules. Some will have different rates at different times of the year. If you have smart meters in your area, then you may also have different pricing at different hours of the day. You may benefit from utilizing these smart meters to get cheaper power at night. I had to make a spreadsheet to figure out what the rates would be. [include spreadsheet]

Kilowatt Hours

If you’ve looked at your home power bill, you’re probably familiar with the term kilowatt hours or kWh. This is a measure of power over time. So if you have a 100 Watt light that runs 24/7, it would use 100/1000 kW or 0.1 kW. It runs all day, so that means that per day it uses 0.1 kW * 24 Hours or 2.4 kWh. And in a 30-day billing period it would consume 2.4 kWh * 30 or 72 kWh. In the USA, the average power cost is 12 cent per kWh, so that bulb cost $9.36 to run all the time. Of course, add some taxes on top of that and you get your total power bill. However, in industrial power, you will typically also see what is called demand charges, and they often account for ½ your total power costs.

A Demand charge is a charge for the load you place on the grid and is typically a number of dollars per kilowatt. This is measured based on the highest power consumption you have during the billing period. So using the previous example, if you run a 100 Watt light bulb 24/7, your demand charge is based on 100 Watts or 0.1 kilowatts. However, let’s say you are a manufacturing facility that operates 8 hours a day. When running your facility used 100 kW. So your demand charge is based on 100 kW. Your kWh charge will be based on the 100 kW * 8 hours in a day * 22 working days in the month or 17,600 kWh. Now when demand charges come into play the kWh price would say go from 12 cents to 7 cents, but the demand charge might be $40 per kW. So our light bulb example would cost:

72kWh * $0.07/kWh or $5.04
0.1 kW * $40/kW or $4.00

for a total of $5.04 + $4.00 or $9.04

Nearly the same cost as the 12 cents per kWh, But things get more interesting with our factory example:

17,600 kWh * $0.07/kWh or $1232
100 kW * $40/kW or $4000
For a total of $5232

But if we did this as just 12 cents per kWh it would have only been 17,600 kWh * $0.12/kWh or $2112

Thankfully, miners’ power is constant throughout the day and as such, the impact of demand charge is minimized. But it’s still important to understand how it is calculated. The last element of demand charges to know is that it is measured based on the largest consumption of power on any one hot wire of the 3-phase system. So if you were to power your mining facility that consumed 100 kW, but instead of it being 33 kW on each of the 3 legs it was actually 20 kW, 30 kW and 50 kW on each leg. You would actually be charged a demand cost based on 150 kW. This brings us to a topic of Phase Balancing. This is the bigger factor to manage in the mining facility and data center space.