Tony Whittle, Managing Director, Enel X UK&I, discusses some of the ways data centre operators around the world can satisfy the competing demands of alleviating pressure on the grid, particularly as they face the mounting pressure of operating sustainably.
Overcoming challenges to enable the transition to renewable energy and address growing energy demand are priorities for many governments, regulators, grid operators and energy users around the world. Large energy users like data centres are often cited as contributing to increased energy use and grid instability, however, taking a fresh look at the opportunities available to them shows that they can be a very effective part of the solution.
Data centres have come under the microscope of energy regulators, especially in those regions that have successfully attracted clusters of data centre operators, resulting in a surge in power demand. Regulators in European data centre hotspots, including Frankfurt, Amsterdam and Dublin, have all taken steps in recent years to control the growth of new data centre construction projects.
In November 2021, following a public consultation, Ireland’s Commission for Regulation of Utilities (CRU) published the CRU Direction to the System Operators related to Data Centre grid connection processing. Instead of proposing an outright ban on new data centre construction, the CRU directions proposed a case-by-case evaluation based on:
- The location of the centre and its region in the electricity system
- The data centre’s ability to generate and/or store energy greater than its demand
- The ability to be flexible in its demand by reducing consumption if requested to do so
Up to this point, Eirgrid, the state-owned electric power transmission operator in Ireland, was mandated to attempt to find a grid connection for any entity that applied for that connection. The interesting change from the CRU paper was that Eirgrid could now reject grid connections.
Subsequently, in January 2022, an announcement from Eirgrid, took a harder line than that proposed by the CRU essentially stating that no new data centre connection requests in the Dublin area could be facilitated until 2028 due to severe electricity capacity constraints. The decision does not impact centres where connection agreements are already in place but, for others, it effectively acts as a moratorium on new data centre development in the Dublin region for the foreseeable future.
Data centre operators around the world are now asking themselves how they can satisfy the competing demands of alleviating pressure on the grid, enabling net zero policies, while also responding to the ever increasing demand for data storage, processing and distribution.
Flexibility
As climate action accelerates the transition from fossil fuels to renewable sources of electricity generation, flexibility is becoming increasingly important in the management of our energy supply. Renewable energy generation is largely intermittent (wind and solar) so, to prevent us from reverting to simply burning more coal or gas when electricity demand peaks or when renewable generation is low, grid operators require energy users to be flexible. This helps to maintain a better balance between supply and demand, prevent power outages and accommodate increasing amounts of renewable energy.
In the UK, National Grid’s Power Responsive annual report identifies demand-side flexibility as ‘essential’ to achieving net zero targets. Demand flexibility, implemented through programmes such as demand response (DR), onsite dispatchable generation and/or storage are key to enabling a mutually beneficial relationship between data centres and the grid.
Implementing flexibility strategies also has upsides for data centre operators and other large energy users. Utility and grid-sponsored DR programmes compensate them for adjusting their energy use to ease pressure on the electricity grid when supply and demand become imbalanced; valuable income to help offset rising energy costs.
Also, data centres that incorporate DR as part of their resilience strategies benefit from advanced notice of grid problems which enables them to prepare for trigger events or pre-emptively move to backup power for the duration of the grid instability. Until they start participating in DR, many data centres will have never run their generators on load, essentially never testing their own resilience. DR provides them with an invaluable opportunity to do so.
Fast frequency response
Another way that data centres can work with grid operators for their mutual benefit is through ancillary programmes, providing fast frequency response (FFR). When grid operators have a large amount of renewable energy in the mix, the system is more sensitive to sudden changes in frequency which threaten the balance of supply and demand and compromise the stability of the grid. FFR solves the problem by creating a sudden, rapid reduction in demand. Response times are less than one second in some markets and, as with other capacity market and ancillary mechanisms, businesses are rewarded financially for their contribution.
Participation in FFR and DR programmes can be facilitated with an onsite battery energy storage system (BESS) or even their UPS systems. Large energy users with a BESS can switch to battery power to support grid stability when demand is high and generate revenue from the flexibility markets. Businesses looking at energy use holistically can make informed decisions about deploying a BESS which can result in lower electricity bills, improve sustainability across their supply chain and avoid disruptions to daily operations.
Holistic energy management
Planning a new data centre is undoubtedly complex, but findings such as the 2021 CRU directions for future data development in Ireland, ensure that new facility developers consider location and their relationship with the grid long before construction and operation begins.
For many organisations, energy is a major cost item and yet management of it is not a core competence. Working with a skilled energy management partner ensures that appropriate plans and technology are in place to satisfy regulatory demands now and in the future. It also helps large energy users like data centres to thrive and become good grid citizens. Expert support can help to monetise the flexibility of energy assets, reduce costs through DR and onsite energy storage and generation and implement other efficiency measures like power purchase agreements. It can also help to incorporate installation and management of electric vehicle infrastructure, utility bill management and decarbonisation road-mapping.
A data centre can develop a holistic energy strategy that contributes to grid stability and emissions reductions targets while improving resiliency and risk management, especially with respect to compliance and market exposure. By creating a more sustainable energy ecosystem for energy companies, grid operators and data centres alike, all parties can build value together in a sustainable way.
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