Securing power is one of the biggest risks data centres (DCs) face today. The expansion and modernization of global electricity grid infrastructure is struggling to keep pace with the rising power demands of AI and digitization, especially in primary DC markets.
As an industry acutely affected by capacity constraints and costly outages, and committed to ambitious renewable energy targets, the DC industry must change the way it thinks about energy.
Microgrids represent a paradigm shift in the approach to energy and may become indispensable to DCs looking to grow rapidly and sustainably.
In this round-up, we bring you the latest activity and innovation in microgrids, highlighting how DCs and energy providers benefit from adopting and creating power technology fit for the future.
What are microgrids?
Microgrid concepts vary, but they are essentially small-scale electrical grids, with local, behind-the-meter (BTM) power generation, management and/or storage systems that can connect to or run independently from a traditional power grid.
Microgrids help end users overcome grid constraints by enabling faster grid connection, adding additional capacity and providing resilient and sustainable power. Other benefits include cost savings from BTM generation and commercial gains from flexible energy management, including trading back to the grid and shaving peak demand.
#1: Verrus DC: delivering a new age of energy management and flexibility
Alphabet-backed Verrus’ DCs (i) incorporate microgrids based on battery storage and advanced power management systems. They provide smart, dynamic power to meet the flexible nature of AI, marking a departure from the historically required but inefficient, power-hungry 24/7 99.999% uptime.
Verrus’ DCs are designed to segregate critical and non-critical loads, delivering continuous power where needed and more flexible power for AI training models and other forms of batch computing.
Its microgrid technology and energy management capabilities deliver a wide range of benefits including:
Reducing redundancy
Eliminating traditional diesel backup generators
Energy balancing and minimizing stress to electricity grids
Circumventing long interconnection queues
Optimizing carbon in energy procurement
#2: DPO and Schneider Electric: bringing modular AI DCs directly to the power source
DPO is a flexibility expert, specializing in operating onsite, BTM DCs collocated at renewable generation assets, that are designed to run only when power is curtailed, wasted or undervalued, and turn off during times of peak demand.
Under a new partnership (ii), Schneider Electric and DPO announced that they are teaming up to develop 100MW of modular AI DCs at six wind farms across Texas and plan to expand the strategy to solar, hydro and other renewables.
Capitalizing on the high flexibility of new AI computing demand, DPO works with power companies to reduce the underutilization of electrical generation assets. This model helps power companies better manage the output of their assets, maximizing operational efficiency and profitability.
In addition, the DCs benefit from large energy cost savings by procuring the power BTM. The Texas wind project is estimated to save $21m/ year compared to purchasing grid electricity. (iii)
This business model of bringing AI DCs into the field to capture wasted energy is gaining traction. Crusoe Ventures (iv), a DC startup valued at over $1bn is taking a similar approach, with over 200MW deployed capacity as of 2023 and plans to scale to DCs across 1.2GW of power capacity in Texas.
#3 Enchanted Rock’s ‘Bridge-to-Grid’ service: expediting DC operations
Enchanted Rock is a leading provider of ‘electrical resiliency’ microgrids. The company’s newest service, ‘Bridge-to-Grid’ (v) helps DCs and other large energy users become operational sooner by providing short to mid-term power generation while they are queueing for grid interconnection.
Following interconnection, the microgrid technology can be removed or remain onsite to provide resilience and grid support.
In 2022, Microsoft commissioned Enchanted Rock to build a biofuel-powered microgrid to provide backup power during outages at its San Jose DC (vi). This microgrid replaces the need for diesel to power emergency backup generators.
#4: Tencent’s 10MW solar microgrid: pushing the limits of onsite PV
For large DCs with workloads that require steady power around the clock, the viability of intermittent renewables has often been questioned. Tencent DC’s recently launched 10MW onsite PV microgrid shows us how cloud DCs can make it work (vii).
Tencent is no stranger to self-installed energy generation, with over 50MW of installed capacity across its DCs in China.
To overcome the challenges of intermittent renewables, its new microgrid project includes energy filtration and suppression technology to stabilize the power as well as a battery energy storage system to store excess power.
Tencent’s technology is also complemented by an AI-enabled energy management system that predicts future electricity demand and generation, allowing it to monitor and forecast its electricity needs.
#5 AWS’s nuclear-powered DC: chasing large green power for large green DCs
The search for sustainable power is pushing DCs to expand to new markets and adopt new energy technology. Previously, DCs perceived nuclear as a risk, choosing site locations far from nuclear energy power plants. However, the industry has changed its tune, opting to collocate sites at nuclear power plants and investing in research and development of small modular reactors.
AWS recently acquired a 1,200-acre campus in Pennsylvania on which it plans to build 960MW of DC capacity. The site is adjacent to a 2.5GW nuclear power plant from which it will directly source energy BTM under a long-term power purchase agreement (viii).
The $650m price tag makes this deal the largest individual US commercial sale of 2024, highlighting the value of scalable infrastructure with access to sustainable power.
#6: ECL: powering DCs fully off-grid DCs with green hydrogen
Capitalizing on advancements in power generation, battery energy storage and power architecture, ECL is the first company to offer modular, off-grid DCs fully powered by hydrogen fuel cells (ix).
Its cooling systems are designed to use the water, created as a byproduct of the hydrogen fuel cells, to cool the DC, eliminating dependence on external water sources.
Backed by investment from Molex and Hyperwise, ECL has recently secured its first customer.
Earlier this year, Microsoft also successfully trialled hydrogen and microgrid technology, partnering with Caterpillar to integrate a 1.5MW hydrogen fuel cell and a battery energy storage system into its Cheyenne DC. During the trial, the power system provided uninterrupted power for 48 hours, achieving 99.999% uptime (x).
This roundup is just a sample of the companies embracing flexibility and microgrids today.
Our recent work with DC developers and infrastructure investors has given us a firsthand account of both the challenges around securing a clean, resilient, timely and scalable power supply and the growing interest and innovation in solving these challenges.
To solve power challenges DCs must continue to change their requirements, accepting more flexible power connections and intermittent power, advancing their energy management capabilities to optimize energy usage and continuing to push the boundaries on location, chasing sustainable power to the source and developing it onsite.
If your company is developing digital infrastructure for the future, now is the time to invest in the capabilities and technologies to manage and meet your power needs.
by Brooke Behrenfeld
Consultant at Ampersand Partners
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