Data centres are factoring microgrids into their plans to secure reliable electricity supply, as their energy needs are poised to strain grid capacity in the U.S. But they are showing a preference for fuel-based power sources rather than renewable energy.
Electrical utilities are “scrambling” to boost capacity while the country’s electricity consumption overcomes its pandemic-era stagnation and rises to meet the energy demands of artificial intelligence (AI), cloud-based computing, and server facilities, reports Microgrid Knowledge.
According to recent statistics from the U.S. Energy Information Administration, the country’s commercial customers consumed nearly 14 billion kilowatt/hours in 2023, a 1% increase from 2019. Most of that increase was from 10 states, led by Virginia, which has become a top location for data centres drawn to that state’s “densely packed fibre backbone and to four subsea fibre cables.”
Texas also saw a notable rise in electricity demand because of its relatively low costs for electricity and land.
But amidst the “new hyperscale data centre construction” are “rising worries about the utility’s grid ability to keep up,” Microgrid Knowledge writes. “Microgrids are considered a current and future solution to those demand challenges.”
Companies like cloud AI start-up CoreWeave and Amazon Web Services are already signing deals for dedicated power and microgrids. CoreWeave has entered a strategic partnership with Bloom Energy, which will supply the company’s Illinois data centre project with solid oxide fuel cell energy technology to generate onsite power. Bloom Energy is striking partnerships with other companies like Sembcorp Industries and semiconductor giant Intel.
Other data centres are using similar strategies to secure access to primary and backup power, Microgrid Knowledge previously reported in April.
“We are seeing a lot of microgrid providers of natural gas solutions or fuel cells offering a 24/7 solution for these larger loads to address utility constraints,” Elham Akhavan, senior microgrid research analyst at Wood Mackenzie, said at the time, adding that most solar+storage microgrids don’t currently make economic sense. Microgrid providers are therefore suggesting off-grid microgrids that use fossil fuels, renewable natural gas (RNG), and alternative fuels.
Akhavan added that grid constraints are pushing companies to be deliberately off grid when their back-up power would have been grid-connected in the past. Grids face the greatest strain accommodating rising energy consumption by limited resources during periods of peak demand. But microgrids, which can more nimbly provide bridge power to bring data centres online, can be repurposed to meet that peak.
That potential now has some utilities striking interconnection deals with some large energy users that provide for data centres to be taken off the grid during peak demand periods.
“I spoke to a utility this week that will provide an interconnection in exchange for interruptibility,” said Allan Schurr, chief commercial officer for Enchanted Rock, a natural gas and renewable gas microgrid company. “In that situation, the microgrid covers the planned interruptions and any outages.”
