Why do data centers need microgrids?

Power grids under strain

Increased energy demands have started to strain power grids, especially in heavily data center populated areas like Northern Virginia. In fact, according to a recent article in Forbes, utility companies may not be able to meet data center power demands for a few years. While the power supply is available, utility companies are not able to get that power to where it needs to be in a timely manner.

As a result, building projects with significant investments are being delayed. For example, we’re currently working with a large colocation company that may need to wait five to seven years before the utility company can deliver power to their data center site. In the meantime, they have started building because the utility has promised that power. To help mitigate this risk, we are looking to power the site with a microgrid to provide resiliency.  

Microgrids support net-zero carbon data center objectives

Advancements in microgrid technology are allowing data center owners to adopt a new approach to their energy needs. Microgrids are independent networks drawing from onsite energy sources like gas turbines, fuel cells, battery storage systems, wind, or solar. They allow owners to have more control through the ability to build the energy capacity needed to operate data centers – and as importantly, have reliable access to that capacity.

While microgrids have been around for decades, they’ve relied mostly on fossil fuels to generate power. More interest has been growing in microgrids because of their ability to balance renewable energy sources like wind and solar with distributed generation like gas turbines. This ability to deploy more zero-emission electricity sources is attractive for reducing GHG emissions.

But while the drive behind microgrids is being as green as possible, microgrids are not necessarily clean. Energy sources like fuel cells and gas turbines, for example, are not as clean as wind or solar. To overcome this, we look at emissions controls like carbon capture whenever possible, even on fuel cells.

Fuel cells typically give off carbon dioxide (C02) and water when converting hydrogen to electricity, and we capture that carbon whenever we can. For example, we are helping some clients to employ carbon capture to make food-grade CO2 used in manufacturing carbonated drinks, while helping others to truck carbon offsite for beneficial use.

The green hydrogen economy 

When we look to transition to new energy sources for gas turbines and generators, we typically look to hydrogen. But while hydrogen is an abundant element with green energy potential, it only occurs naturally in compound form with other elements. The cost and technology required to separate, store, and transport the hydrogen at scale have limited its use.

As a result, there isn’t enough hydrogen today to power plants in a commercial environment. But this is changing – driven by advances across the hydrogen ecosystem, together with a growing global interest in sustainability.

Powering microgrids for the future

In addition to hydrogen, there are various ways to power microgrids for data center sites, each coming with its own set of opportunities and challenges.

Outsourcing

Increasingly data center operators are outsourcing microgrid development as making power is not their core competency. A challenge with outsourcing, however, is the difficulty vendors are having with getting enough equipment to build a microgrid in the time needed to compensate for a utility struggling to deliver power on time. This is leading some companies to buy property knowing they can't get power, and then building a microgrid to attract a data center company to the property to, in turn, buy their power. 

Renewable energy sources

Renewable energy sources like solar and wind are producing green microgrids. These sites, however, are not as prevalent as others due to the location and size needed to generate that solar or wind power. A solar plant, for example, requires approximately 10,000 square feet per 100 kilowatts (kW). A data center site needing 300 megawatts (MW) of power would require a lot of land. 

Offshore wind power has a similar set of challenges. States like New York have offshore wind available, but that power is farther away from the site. Since it costs more to get that power onshore, a utility connection is needed onsite to utilize the power. And with wind turbines up to 500 feet in diameter, installing one on site would also require a lot of land.

Fuel cell and steam turbine plants

The most concentrated per square foot is a steam turbine or fuel cell plant. Fuel cell plants are typically made from 300–500 KW power blocks, meaning a site requiring 250 MW of power would need 5,000 fuel cell blocks. They’re also typically placed on one floor which requires a large footprint. Recently, fuel cells are being placed instead on multiple levels of steel to get more on a single piece of property and produce the power necessary to run a data center.

In addition, steam turbine and fuel cell plants need medium- to high-pressure natural gas from a utility company. When adding emissions controls, this could be a cleaner power producing facility than most utility companies. 

Hydrogen conversion of these plants from natural gas is a  costly option that would lower the GHG footprint. While most equipment can tolerate a 20% mix of hydrogen with natural gas, a full conversion would require major equipment modifications. If starting with natural gas and needing to maintain the critical load, a new hydrogen piping system would need to be installed, and the equipment swapped over to hydrogen one at a time, to minimize redundancy issues and risk to the facility.

Summary

The power market has gone through dynamic changes over the past few years. Buying power has changed from a utility purchase to a build-it-yourself process. Power purchase agreements (PPA) with third-party providers are becoming the new way to ensure a facility runs optimally – and in a way that is reliable, economical, and environmentally friendly to ensure meeting new ESG requirements that we expect to be mandated in the future.

At Ramboll, we support clients with engineering and ESG analytics to ensure they are moving ahead in the right direction.