Developers are trying to keep up with record amounts of data center demand, but they’re having a tough road when it comes to a key issue to running these facilities: providing backup power.
The reliability of the U.S. power grid is declining, forcing data center operators to increase their reliance on on-site backup power systems to avoid costly outages. In most cases, this means running a diesel generator.
However, at the same time that a record pipeline of new data centers is underway to meet extremely high demand, the use of diesel generators in the industry is slowing due to the emissions produced by diesel generators. facing increasing scrutiny and regulatory scrutiny.
Concerns about generator emissions have stalled or delayed data center projects in markets from Maryland to Texas, and developers are now considering on-site generators when it comes to data center locations. states that regional restrictions on the use of are becoming an important factor.
Other on-site power options exist with fewer emissions concerns, but they are often not feasible for most projects, at least for now.
But even if these clean technologies are possible, the industry’s largest tenants, Big Tech companies, are unable to secure contracts, according to data center operators and technology experts who spoke. The use of diesel generators is often required. Bisnow‘s National DICE Power Capacity, Energy, and Sustainability Summit will be held this month at Statler Dallas.
These experts argued that the industry’s ability to meet both record demand for new data centers and sustainability goals will require Big Tech tenants to change their requirements regarding backup power. Otherwise, the hurdles for generators will become higher and higher, complicating an already difficult development situation.
“We are making these two things interact. Air quality and emissions regulations require operators to reduce their generator usage, but grid constraints are forcing them to use less generators. is about to increase,” said Rich Scroggins, a Cummins technical advisor specializing in data center power systems.
“These are the forces we have to overcome when making decisions about how we build and power our data centers.”
Not only is the data center industry facing energy constraints in key markets, but the reliability of the power that data center companies have access to is also decreasing. Power outages due to transmission issues are becoming more frequent, driven primarily by aging infrastructure and the complex transition from fossil fuels to renewable energy such as wind and solar.
These grid reliability issues are expected to worsen in the foreseeable future.
“The pace of change is extraordinary, given the changes in the global power landscape,” said William Chan, Iron Mountain’s global director of site selection and energy. “Reliability over the past 15 years is no indication of reliability over the next 15 years or so.”
For data centers, increased grid instability means having to run backup generators more frequently. To prepare for spending more time off the grid, carriers and developers are investing in higher quality generators and more advanced power systems to strengthen their diesel supply chains. There is.
However, the industry’s increasing reliance on diesel generators is in direct conflict with the environmental regulations governing their use.
Scroggins said that while air quality regulations and other emissions regulations have become stricter at the federal, local and state level, new data centers are using far more electricity than they were just two years ago. . As total on-site generation requirements increase from tens of megawatts to hundreds of megawatts, the potential emissions from long-term use of diesel generators violate air quality regulations and raise red flags in areas where data centers are located. is being served.
“When you start talking about the generators needed to back up half a gigawatt of IT load, people get scared, and they should,” said Lindsey Brunner, chief operating officer of CleanArc Data Centers.
Whether emissions from diesel generators lead to regulatory or permitting issues is becoming an important consideration where developers are considering building.
Aligned Data Centers announced in October that the 264-megawatt Quantum Loophole megacampus near Frederick, Maryland, would be cut off after state environmental officials limited the number of diesel generators the company could install at the facility. The facility plan was withdrawn.
In other markets, local governments have enacted more stringent emissions regulations to comply with federal Environmental Protection Agency air quality standards. Areas deemed to be in violation of the EPA’s clean air rules face federal orders to impose stricter emissions limits. This is an ongoing process in areas like Dallas-Fort Worth, where many air pollutants are designated as “severe nonattainment,” but may actually be downgraded to “severe nonattainment.” be.
“It’s going to impact generators and the ability to permit generators,” said Haynes Strader, chief development officer at Skybox Data Centers. Bisnow in November. “When that change occurs, Dallas will become more like Santa Clara from an environmental regulatory perspective.”
Local EPA air quality status is becoming an important factor in site selection for developers and panelists. Bisnowsaid at the DICE Summit.
Bisnow/Katie Frazier
William Chung of Iron Mountain, Rich Scroggins of Cummins, Jeff Brown of Miratech, David Bell of VoltaGrid, and Josue Chavez of Hoppecke attend Bisnow’s National DICE Power Capacity, Energy, and Sustainability at Statler Dallas I spoke at a sex event.
Permits for generators in “non-attainment” areas can take more than a year, impacting speed to market. Generator permits in some markets increasingly include strict limits on how often generators can be used, which Scroggins says can undermine project viability. That’s what it means.
“At some point, your hours get so short that you can’t even actually deploy,” Scroggins said. “I think this is one of the big challenges we face.”
Data centers may have other options for on-site power generation that have lower emissions than diesel generators. In some cases, there may be no discharge at all.
Some data centers use natural gas generators, which are cleaner than grid power, while others incorporate newer technologies, such as fuel cells with utilized battery storage systems. Large campus developers are increasingly considering aggregating multiple forms of power generation and energy storage into self-managing “microgrids” that effectively function as their own power companies.
However, at this time, these technologies are typically not a viable alternative to completely replace diesel generators in most projects. Barriers to adoption vary, but industry leaders point to the infrastructure required for natural gas-based systems, as well as high cost, limited performance, and manufacturing constraints.
But perhaps the most significant obstacle standing in the way of these diesel generator alternatives, according to DICE panelists, are the industry’s largest tenants, Big Tech’s cloud providers, who are vying for data center providers and often strongly insist on diesel generators in contracts.
“Despite all the innovation in various aspects of data center design and operations, we still receive customer RFPs that say, ‘I need diesel generator backup,’” said CleanArc’s Bruner. states. “It’s secure, it’s easy, it’s fast, and they know it works. I want something that I know will work.”
With generators becoming an impediment to bringing much-needed capacity to market quickly, developers say some of the world’s most innovative companies are taking risks when it comes to on-site power. He expresses his anger at being so evasive. Adding to their frustration is the fact that companies like Google, Amazon, and Microsoft have ambitious sustainability goals that can be achieved by reducing or eliminating diesel generators.
This disconnect reflects divisions within these large technology companies, said Marcy Manning, vice president of sustainability and sales and alignment data centers.
These companies have data center sustainability groups, but they are typically isolated from the procurement and engineering teams that negotiate contracts with third-party providers. These teams are typically incentivized not to deviate from the hyperscaler’s standard contract, creating structural barriers to change, even if that change is in line with the company’s broader goals. .
“Executives are talking about moving away from generators, but the engineering groups within the organization are just not ready for that,” Manning said. “Within Hyperscalar, I witness a lot of internal discussions taking place before a contract is written and an agreement is reached so that a project can be designed around it.”
