How data centers can support the energy transition

How data centers can support the energy transition

According to a study by BloombergNEF in partnership with Eaton and Statkraft, European data centers could almost double their electricity demand by 2030. At the same time, they represent an enormous reservoir for flexible grid services and could thus support the energy transition. […]

Data centers in the UK, Germany, Ireland, Norway and the Netherlands are expected to consume 5.4 GW (gigawatt) of electricity in 2030, compared to 3 GW at the end of 2021, according to a study conducted by the research company BloombergNEF (BNEF) in collaboration with Eaton and Statkraft. This figure is based on a moderate scenario; the report also outlines a more aggressive growth scenario in which IT performance could rise to over 7 GW by 2030. Although they are generally considered to be consumers of energy only, the report shows that data centers also provide a largely untapped resource to support grid stability and renewable energy integration.

The study “Data Centers and Decarbonization: Unlocking Flexibility in Europe’s Data Centers” highlights the growth of the data center industry in five European markets and shows how operators can provide flexibility resources for the network. In Europe, the share of wind and solar energy in total electricity generation is expected to increase to 60 percent by 2030. With this increasing market penetration, there will also be a greater need for flexibility in the network. The study underlines the need for greater awareness of the flexibility of data centers – not only among operators and users of data centers, but also among energy suppliers and authorities.

Data centers as electricity suppliers

In the five markets studied, data centers could provide the grid with a total of 16.9 GW of flexibility reserve through their uninterruptible power supply (UPS), back-up generation and load shifting. This is more than the electricity demand expected from this sector itself, since, in principle, resources can independently provide flexibility to the grid either by reducing electricity consumption or by feeding back electricity. Of the resources studied, UPS systems seem to be the most promising for flexibility. They are standard equipment in data centers, are based on batteries and are therefore particularly suitable for short-term frequency control (Fast Frequency Response, FFR).

However, the study also shows that data center operators are still hesitant to provide the mentioned resources to support the power grid. The reasons cited are service level agreements with customers, a lack of visibility and transparency regarding the benefits of providing flexibility, and a lack of know-how. For this reason, BNEF estimates that by 2030, only 3.8 GW of flexibility reserve will be available in data centers in the markets studied. This is less than a quarter of the potential capacity of 16.9 GW and corresponds to 1.7 percent of the expected peak load in the five markets in 2030.

“Data centers represent unique ecosystems: with their large capacities of battery storage, they are comparable to so-called microgrids. The present study highlights the enormous untapped potential of these resources to achieve economic and regulatory benefits for the environment. We call on network operators, regulators, data center operators and users to work together to exploit the flexibility resources of data centers,“ says Michaela Sadleder, Country Sales Manager at Eaton in Austria.

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