Perspectives on Business and Economics, Vol. 40

39 workers transition, the necessary workforce could readily emerge. With the near-term ability to provide all the requirements, Alaska could soon become an oasis for data processing, transforming a state economy reliant on converting nonrenewable resources into tax dollars to a modern economy drawing on renewable resources available for a long time to come. Data center giants, such as Amazon Web Services and Microsoft Azure, have grown to become the largest arms of their respective companies. One of the biggest issues they face is the demand their centers place on the utility grid in the face of fluctuating electricity prices. Amazon Web Services is known, in terms of their sales strategies, to sell computational hours based on priority and processing time. With the conversion of the grid to renewables-based energy, systems and data centers could face even greater issues in keeping up with demand. For example, if the wind were to stop blowing in sections of northern California on a cloudy day in the winter, energy prices would skyrocket, in turn causing data centers to stop jobs or to push off nonessential jobs until electricity prices come down. Increasing dependence on renewable energy sources could thus become problematic. Some centers may have long-term contracts with providers or methods to hedge a spike in prices, but, in the end, these methods may not actually reduce the cost below what constant renewable sources can provide in terms of electricity availability. With Alaska’s unique position of being a battery, capable of producing renewable-generated electricity consistently through multiple methods, companies would be well positioned by moving their data centers to Alaska. Data Center Challenges Although the state clearly has great potential to establish an environment friendly to data centers, there are four factors that may constitute Achilles heels, preventing Alaska from doing so. The first issue preventing data centers from taking off is how small the electric grid is in terms of transmission infrastructure. The Railbelt grid, which stretches from the beginning of Cook Inlet to the east side of Fairbanks, contains the only 230-kV line in the entire state of Alaska (U.S. Energy Information Administration, 2021). Thus, given the limited electricity infrastructure, the question remains as to whether the existing grid could actually handle additional demand should it emerge. As discussed previously, server racks, the backbone of a data center, can cost up to $30,000 per year to power, which means a substantial amount of power being consumed, thereby requiring a network robust enough to transmit it. One response would be to expand the existing grid; alternatively, a microgrid linked to any new electricity sources could supply the electricity for a center, thereby bypassing the need to extend existing infrastructure. So Alaska must not only decrease the cost of electricity in the state but also consider upgrading its existing power grid or help industries develop a microgrid to handle increased energy consumption. A second issue plaguing data center development is seismic activity. Alaska is one of the most seismically active places in the US, with literally thousands of earthquakes occurring across the state per year. The equipment inside these centers can be delicate; shaking or damage from earthquakes can easily disable a center for a long period of time, if precautions are not taken. Fortunately, a tremendous amount of research has been done in this field, as data centers in California are facing this same issues caused by vibration brought on by earthquakes. Solutions range from bolting server racks to the ground/floor to vibration reduction systems deployed below the building to reduce the shaking (Wong, 2017). However, all these capital-intensive precautions do not guarantee the possibility of a center going offline for a long time due to an earthquake. Therefore, the business case for seismic-aware construction must be stronger than in other places in the wider arctic that have the same energy and internet advantages. Data security issues are another possible problem for new centers. One of the most challenging battles that faced tech/data center giants in 2016 was the EU General Data Protection Regulation, which provided rules and regulations for how personal information can be gathered, stored, and used for any data entering, staying in, or leaving the EU (European Parliament and Council of the European Union, 2016). This meant that these companies faced serious financial and liability