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Dive brief:
- Large data centers can increase on-site security and reliability while providing significant network benefits by moving from proprietary electrical infrastructure designs to more standardized frameworks. National Association of Electrical Manufacturers the official told Utility Dive on Monday.
- Utilities are increasingly valuing data centers that can “cut off” from the grid during periods of peak power demand by turning to on-site power generation and storage, said Patrick Hughes, senior vice president of strategy, technical and industrial affairs at NEMA.
- “We see demand response playing an important role for the grid … it’s an underutilized resource and we’d like to see it used more widely,” Hughes said, echoing comments made by NEMA in a letter to Congress last fall Data centers can use batteries and on-site microgrids to provide businesses with essential flexibility without disrupting their operations, he said.
Diving knowledge:
Computer facilities that represent about 30% of the entire U.S. data center capacity plan planned to power its operations with behind-the-meter resources, according to an analysis published last week by energy research shop Cleanview.
Ninety percent of those projects were announced by 2025, which Cleanview said indicates that data center developers are getting impatient with high-load interconnection queues that can stretch as long as seven years in some regions.
Of the behind-the-meter assets that Cleanview was able to identify through permits or purchase orders, about 75 percent use natural gas as fuel, and “virtually none of the developers planned to build renewables in the near term,” Cleanview founder Michael Thomas wrote in the analysis. While buyers of the larger gas turbine models generally face multi-year arrearsdata centers can acquire smaller machines, such as mobile generators, reciprocating engines and wind turbines, in a matter of months as they race to get up and running, Thomas wrote.
“Data centers are trying to pass for utility [interconnection] queuing quickly … and being able to show that you can insulate during peak hours, that you’re not going to put a lot of strain on the grid, it’s going to get you through the queue faster,” NEMA’s Hughes said.
Data center developers and operators are adding gas-fired generation to reduce the amount of interconnection capacity they need and create redundancy once they’re connected to the grid, Hughes said.
But data centers are increasingly valuing energy storage as an asset behind the meter because it provides additional redundancy, can help optimize power quality to protect sensitive electronics and can be combined with zero-emissions generation to advance technology companies’ sustainability goals, Hughes said.
On Monday, energy management provider Energy Vault said it would buy 1.5 GWh of energy storage from Peak Energy and co-develop a “dedicated energy storage architecture designed specifically for AI Neoclouds and AI-first data center operators” with the sodium-ion battery technology company.
Industry analysts see data center companies willing to pay a premium for energy storage and other behind-the-meter assets amid growing public concern about the impact of heavy loads on residents’ electricity bills.
“The ability to avoid much of the political backlash around data center power affordability and extended interconnection lead times is the appeal of [behind-the-meter assets]albeit at high prices,” Julien Dumoulin-Smith, electricity sector analyst at Jefferies, wrote in a note to investors on Monday.
Battery energy storage “is an increasingly critical part of data center infrastructure,” Dumoulin-Smith added.
Last month, NEMA launched voluntary standards for energy storage systems i microgrids on data center campuses. Hughes said NEMA wants to bring some order to what is now a largely proprietary design process, with each major data center developer referring to its own internal standards. Competing standards can increase uncertainty during the engineering and design phases of a project, slowing procurement and increasing upfront costs, he said.
“We see a lot of benefit in … starting to standardize how to implement storage and microgrids because then you get more secure and efficient data centers,” Hughes said.
NEMA is working with ASHRAE and the Pacific Northwest National Laboratory on a more comprehensive guide for data center design, Hughes said, calling it “a one-stop shop for data center developers and owners.” It is scheduled to be released in early summer.
The guidelines should also be helpful for utilities in data center hot spots, he said.
“[They] provide a common technical framework, which can help compress review cycles and reduce burdens associated with resource planning departments,” said Hughes.
