Grid Independence: Bridging Power Gap with On-Site Generation for Data Centers (Part 1: The Challenge)

• Posted by Peter Schempp
• On Wed Jan 8

I’ve been working in the data center market for 18 years, and the changes I’ve seen over this period have been significant, but nothing like I believe we will experience in the coming years. Over the next decade, we’ll see significant advancements in on-site energy generation for data centers.

As data centers grow in size and complexity, so do their energy demands. With technology companies and other major corporations and institutions expanding the size and number of data centers they operate, the era of commercial companies relying solely on traditional utility grids is giving way to innovative energy strategies emphasizing localized power generation.

In this first article (of a two-part series), we’ll explore the challenges data centers face and the emerging trends in energy efficiency solutions to overcome these challenges.

In the second article, we’ll discuss the critical role of on-site energy generation in bridging the power gap. Companies that offer power interconnection solutions help data centers and other critical facilities navigate the complexities of on-site generation.

Challenges in the Data Center Market

Utility Constraints

The rapid expansion of data centers in the United States and worldwide has overwhelmed traditional utility infrastructure, precipitating a growing need for innovative power solutions. Utility companies face significant challenges in providing timely interconnections and delivering the substantial power required by modern data centers while minimizing the impact on their rate base.

Some of the challenges posed by utility constraints include:

• Lengthy Interconnection Timelines: At present, and in recent years, technological infrastructure demands have grown exponentially. Data centers often have to wait months, if not years, for utilities to approve and implement the interconnections needed to operate new data centers.
• Overwhelmed Utilities: Many utilities are inundated with requests, leading to prioritization based on ease of connection and minimal grid upgrades to get a data center up and running with adequate energy.
• Lagging Power Availability: The energy demand far outpaces the development of new generation sources. Some data centers’ energy needs rival the energy consumption of major cities. Many sites now require 1.5 gigawatts of power or more – comparable to a nuclear reactor.

Operational and Expansion Delays

The constraints posed by the lack of surplus power in the utility grid have rippled through national and international data center operations, necessitating companies to seek their own power solutions. There are few companies with the right expertise, breadth, and depth that can help organizations navigate these constraints with solutions such as:

• Expanding Operations Geographically: Data centers must scout multiple locations to secure adequate power that doesn’t disrupt existing energy demands in the region or result in impacts to utility companies’ rate base.
• Staggering Data Center Construction: Phased power availability from utility companies requires a staggered approach to data center construction, which increases costs and complexity.
• Engaging Third-Party Developers: To mitigate risks and reduce their need for self-reliance and the associated challenges and costs, some data centers contract with third-party developers to establish data center sites with pre-secured utility infrastructure.         Engaging third-party developers for energy solutions dramatically reduces the construction time typically required for a data center to become fully operational. Data centers working with third-party developers for energy needs don’t have to wait months or years to secure the necessary interconnects and other infrastructure.

Opportunities Await

In this first article, I wanted to discuss a few of the more notable headwinds facing Grid Independence.

Next week, I’ll share specific thoughts about the opportunities behind the challenges. In forward-thinking industries such as ours, we always view challenges as temporary roadblocks that ultimately give way to innovation and progress.

Companies like Chateau Energy Solutions that provide power interconnection and bridging power solutions have highly experienced teams that help data centers meet the challenges posed by the rapidly evolving need for increased-capacity and technical infrastructure. We help data centers procure the proper medium voltage equipment needed to connect to the grid – if available, serve as the program manager overseeing the multiple partners involved in this complex process, and provide interconnection of new electric generation sources that ensure reliable energy supply.

Contact us to help with your data center challenges.