Rethinking Data Center Power
Overcoming Data Center Power Interconnection Challenges
As data center development booms, we're seeing an unprecedented increase in power demand. According to McKinsey, U.S. data center power consumption is expected to reach 35 gigawatts by 2030, up from 17 gigawatts last year. To achieve that level of growth, it’s critical that we work together to understand and address challenges from the perspective of tech-driven data center owners and customer-serving utilities.
When looking to utilities for interconnection, data center owners and developers face challenges like speed to market, capital cost of infrastructure and monitoring carbon emissions. Simultaneously, utilities face challenges in providing power to data centers, like infrastructure build times, cost to ratepayers and system impacts.
Data center owners, utilities and power producers have a variety of options to consider as demand accelerates for power interconnections.
Power Supply for a Typical Data Center
Data centers vary in size, and many are big energy consumers. A typical data center can range from 100-300 megawatts in electrical demand. To look at the power configuration of a typical data center, consider a 100-megawatt data center.
A 100-megawatt load likely requires a substation, preferably with two independent utility feeds to meet expected reliability and resiliency. The substation generally includes transformation to medium voltage, and distribution switchgear supplies power across the data center campus to many separate 480-volt load centers. Each load center typically feeds a load of about 3 megawatts, supporting a combination of information technology, HVAC, network systems and the central utility plant.
Nearly all data centers are considered mission-critical, so backup power is provided to most or all of the facility. Backup power is provided with Tier 2 emergency diesel generators sized to match the capacity of the 480-volt load centers located around the facility.
Challenges Faced by Data Center Owners and Utilities
Although the current power setup for typical data centers has a reliable grid supply with redundant feeders, an electrical system with built-in redundancies, and lots of diesel generators, regions saturated by data centers are faced with a limited availability of grid-supplied power. Utility infrastructure buildouts add a layer of complexity, often requiring extended timelines to complete. Factors like these are driving alternative approaches to supplying data center power, which can either exacerbate or mitigate speed-to-market for new data centers.
As data center owners and developers explore options, they need to address:
- Capital cost and operating costs. As large tech companies downsize and face new economic realities for data centers, costs become an increasing concern. The technologies and approaches to supplying power greatly impact the installed cost of data centers and the ongoing operating cost.
- Environmental considerations. Tech firms often have ambitious goals for reducing carbon dioxide emissions. Emissions from data centers are primarily attributed to electric supply, which drives demand for alternative, low-carbon power generation sources. If additional power capacity is needed, air permitting can also impact project costs and timelines. This can be especially true if traditional power generation technologies are included, as some of these can produce significant air emissions, which may require longer permitting periods and more costly emission control technologies.
- Reliability. When one considers recent events like the FAA system failure, Microsoft Teams outages, or the stock market being unable to open due to server issues, it’s easy to see how critical reliability is for data centers. Downtime and outages are unacceptable to end users, which necessitates a dependable and resilient power supply infrastructure at data centers.
On the flip side, utilities must consider:
- Schedule to build infrastructure. Planning, permitting and constructing new transmission lines to serve data centers takes time, and data center developers are often working on tight timelines.
- Capital costs. Utilities are impacted when ratepayers face the cost for infrastructure upgrades.
- System impacts. Transmission system upgrades or new generation capacity is often needed to serve data centers.
- Environmental goals. Data center customers and other customers often have to meet climate-related goals. The chosen power supply has a significant impact on these goals.
- Grid reliability. In the face of increased renewable penetration, major storms and weather events, grid reliability is a constant concern. Increased demand due to data center growth and electrification across other sectors only amplifies this fact.
Data center owners need a power supply that can be operational quickly, and is cost effective, clean and reliable. To meet these requirements, utilities must be ready to adapt their systems and integrate or purchase alternative technologies and fuels to meet the needs of their tech clients.
Alternative Technologies and Fuels
Data centers are looking at alternative generation technologies to bring power to facilities when the grid isn’t an option or won’t be ready on the desired timeline. While the technologies aren’t new, most haven’t traditionally been used on data center campuses.
Combustion turbines are workhorses in the power generation industry. They’re power dense, and don’t take up much space. Combustion turbines can be installed relatively quickly — some units are mobile. They’re also fuel flexible, allowing operation on natural gas, diesel, or even hydrogen, and offer the option to capture and use exhaust energy. Combustion turbines have a long start-up time relative to emergency diesel generators, so they’re better suited as a primary power source, or possibly as a back-up with longer-term uninterruptable power supply or battery systems.
Often funded by private entities, data centers have adopted fuel cells more than any other market, despite their relatively high expense. Data center fuel cells have a steady electrical load, which matches fuel cell operating parameters nicely, and their low emissions profile helps with permitting and environmental goals. Fuel cells also offer an easy transition to hydrogen fuel.
Battery Energy Storage Systems
By themselves, battery energy storage systems offer an alternative back-up solution to the primary power source, but they don’t replace baseload power from the grid. However, BESS can be ideal for systems that need brief generation backup to shift data and network traffic to other locations when an outage occurs. Additionally, BESS can sometimes provide revenue through demand response or other programs. Combined with other generating assets, BESS are often part of a larger microgrid system.
Solar, Wind, Carbon Capture, Modular Nuclear, Geothermal
Solar and wind generation are most often used to supplement other power sources. With large roof areas, data centers can make great solar sites. However, to supply a significant portion of the required power from solar energy — typically to achieve carbon emissions goals — a virtual power purchase agreement or renewable energy credit is often considered.
As carbon capture technology matures, it may play more of a role in helping data centers meet climate goals while providing reliable power. Carbon capture technology uses fossil-fueled generation and captures the CO2 emissions. This process is only feasible if there’s a pipeline or geological feature available for storage.
While not a mature or widely available technology today, modular nuclear could be a great fit. However, the current regulatory environment for nuclear impedes speed-to-market.
If the geology allows for geothermal power generation, this option can be considered. Pilot projects are underway to assess effectiveness.
Hydrogen gets a lot of attention as a potential carbon-free fuel source. As the price and availability of hydrogen options improve, it may play a significant role in data center power generation. In addition to hydrogen, data centers owners and developers are also considering natural gas generators, biofuels and renewable natural gas.
All kinds of technologies, fuels and configurations have the potential to play a role in powering data centers in a manner that’s quick, clean and consistently reliable.
Utility and Power Generation Response
Utilities and power producers have a variety of options to avoid losing data center load and revenue. One longer-term solution is to reduce the greenhouse gas footprint of grid-supplied power. Utilities that choose to “green the grid” by maximizing low-carbon-emitting power generation will help data centers, and other customers, reach their climate related goals.
Proactive transmission planning is another longer-term solution. Rather than waiting for interconnect requests and studying one project at a time, utilities and power producers can engage data center owners before they’re ready to put shovels in the ground. Working to understand a data center’s long-term plans, evaluating the utility’s system and its constraints, and defining and pre-planning transmission projects before they’re necessary can reduce the queue for interconnections. Revising the interconnect process could also help integrate renewables and other distributed generation projects.
In the shorter-term, utilities and power producers can serve data centers by acting as a third party for data centers to outsource onsite power generation. Through a power purchase agreement or other energy as a service contract, a temporary or permanent power plant could be built to feed power through the substation until, or even after, utility feeds are available. Solar, other renewables and BESS could be added to the plant, building a microgrid with controllers and optimization software. Or, the system could include a combined heat and power configuration, providing power and thermal energy in the form of chilled water to keep the data center cool.
Using PPAs or other energy as a service contracting methods, power producers and utilities can implement a variety of technology configurations enabling them to provide service for data centers.