Data centers are under immense pressure to expand, and the primary obstacle to that growth is grid constraints. That’s according to a recent survey of data center industry leaders. AlphaStruxure found that 92% of key data center decision makers see grid constraints as the primary obstacle to data center construction.
This pressure is highly visible in Data Center Alley, northern Virginia, where grid connection delays can extend to seven years.
Hyperscalers, data centers, and colocation operators want to shorten wait times. With more than 90% of companies planning AI investments in the near future, data centers must expand fast to support power-hungry AI workloads. One possible solution involves tight collaboration between data center and grid operators, known as “grid interdependence.”
How grid interdependence works
Grid interdependence requires an understanding and active working relationship between utilities and end users with large electrical loads like data centers. Utilities approve connections to the grid, provided data centers coordinate with the grid operators in times of high demand and/or grid anomalies. These situations typically occur during extreme heat or cold weather, or during severe weather events such as floods and tornadoes.
Grid interdependence would allow for the end user’s energy systems to be utilized or have the facility disconnect in order to maintain and improve grid stability.
On-site power generation
For grid interdependence to be effective, data centers must generate or store some energy on-site, enabling them to continue operating even when disconnected from the grid. On-site power generation is nothing new for data centers. Uninterruptible power supplies with batteries (UPSs) and standby generators have long been integral to the power infrastructure of data centers.
Microgrids with battery energy storage systems (BESS) are increasingly being deployed at some facilities. These systems often tap into renewable power sources, such as solar and wind energy, and work with the batteries to store energy for use when needed. Besides supplying power during outages, BESS and microgrids enable operators to disconnect from the grid during peak hours to optimize energy consumption. In the AlphaStruxure survey, batteries were ranked No. 2, next to solar, as an on-site power option.
Issues with on-site power
On-site power generation isn’t without challenges. Even if a data center is entirely self-sufficient – as seems to be the plan for the natural gas-powered Stargate AI facility in Abilene, TX – on-site generation has challenges.
Prime power natural gas turbines and engines are subject to the local AHJ (authority having jurisdiction) and utility policies with respect to permitting/run hours/noise, regulatory requirements, etc. Standby power generators are usually diesel fuel generators, which can power data centers for days, even weeks, but are subject to strict regulatory restrictions as well.
Making interdependence work
To make interdependence work, three main pillars must work together for it to scale.
Pillar 1: Policy/Regulation – Several initiatives are underway to streamline permitting and incentivize flexible grid participation.
Pillar 2: Technology – We have new grid-scale battery technologies, supercapacitors, potentially nuclear in the future, and many other advances. Policy and regulation must evolve alongside technology capabilities.
Pillar 3: Digital Thread – It’s a common standard (data and protocols) from the production of the electron through the electrical distribution system, all the way to the end-use load. A digital thread of real-time data between production and the use of electricity is crucial.
For example, in a car, sensors monitor the performance of its components. When those sensors share data on a single network, it allows for advanced capabilities like self-driving. Today’s grid lacks a unified standard—a ‘digital thread’— that lets utilities and data centers operate with similar intelligence and coordination.
Combining these pillars of policy, technology, and common digital standards creates a strong foundation for grid interdependence.
DCFlex, an initiative of the Electrical Power Research Institute (EPRI), is addressing this issue. With collaboration from stakeholders such as data center operators Microsoft, Equinix, Compass, and other players in colocation space. With NVIDIA, Schneider Electric, and utilities, the initiative aims to foster collaboration. The focus is on how data centers interact with the grid and optimize asset utilization while utilities leverage technology and data to enhance grid stability.
Data center operators can take steps now toward interdependence. Investing in on-site generation is key. BESS, linear generators, and fuel cells will become more viable as the technology continues to improve. Renewable power sources play a big role here. Data center operators can connect with Schneider Electric’s experts on Power Purchase Agreements (PPA) to help run their facilities with renewable energy. AlphaStruxure, a joint venture between Schneider Electric and Carlyle, offers energy-as-a-service solutions that also incorporate sustainable power.
To meet the demands of AI and digital transformation, data center operators must embed grid interdependence into their expansion strategies. It offers the most viable path to scalable growth, operational resilience, and long-term sustainability.
To learn more about grid-ready strategies and AI-driven energy solutions, visit the Artificial Intelligence solutions and AI use cases site.
Add a comment