How data centers can help balance the electrical grid
Data centers consume 1% of global electricity. To ease grid pressure, data centers should use renewable energy, partner with power companies and manage demand during peak times.
Data centers consume a significant amount of electricity. With energy-intensive applications like AI proliferating, this consumption will likely increase significantly in the years ahead. Data centers have been making the switch to more sustainable and renewable energy sources; however, grid balancing can also help the energy crisis and give back to the energy sector.
According to the International Energy Agency (IEA), data centers account for about 1% of global electricity consumption. The annual electricity consumption of data centers globally is equivalent to nearly half of the amount consumed by household IT appliances, like computers, phones and TVs.
This is cause for concern because, according to the IEA, energy production and consumption are responsible for 75% of greenhouse gas emissions, making them the primary driver of climate change. As climate change worsens, the risks to global energy security get worse. Grid balancing minimizes the strain data centers put on the electric grid and reduces electricity use.
What is grid balancing?
Grid balancing is the process of ensuring that energy demand matches energy supply within an electrical network. This is easier said than done because electricity is difficult to store.
According to Energy Strategy Reviews, electricity is a perishable good. Due to storage constraints, electricity must be consumed when it is produced. Electricity within the grid must maintain a consistent level of frequency, which is a primary constraint. If the frequency gets too high or too low, it can short-circuit equipment, lead to a blackout or destroy electrical components.
The variety of sources that generate electricity compound this balancing act. Each source might have production constraints. A wind turbine, for example, must rely on wind strength to generate electricity. This means it can't ramp up energy production on short notice. Even fossil fuel sources, like coal plants, can take a long time to ramp up energy production.
Further complicating this balance is unpredictable energy demand. Consumers can suddenly increase or decrease their electricity usage without notice. In the case of data centers, energy-intensive applications can strain the grid over long periods. As such, careful planning and coordination are necessary to ensure the grid remains stable.
Why is grid balancing important?
When the grid isn't balanced properly, it can result in brownouts, blackouts, voltage sags and surges, as well as grid inertia failure.
Brownouts
A drop in voltage causes brownouts. This drop can cause lights to dim, casting a brownish appearance. Brownouts can last anywhere from a few minutes to hours. Sometimes, grid operators intentionally organize brownouts to shed load.
Blackouts
A blackout is a complete power outage, often the result of equipment failure. Blackouts usually happen unexpectedly, last for an indeterminate amount of time and affect large swaths of customers connected to the grid.
Voltage sags and surges
Not to be confused with brownouts, which typically last for longer periods, a voltage sag is a temporary dip in voltage. This can happen when there's a spike in current demand on the electrical system. A voltage surge is a temporary swell in voltage. This can happen when there's a sudden drop in current electricity demand. Both are short-term experiences, often lasting for seconds.
Grid inertia failure
Power grids use rotating masses within generators and motors to provide inertia at the same frequency as stored electricity. This helps maintain grid stability and provides time for grid operators and electricity producers to meet demand spikes and dips. Equipment failure or large sudden load changes can result in grid inertia failure, which can lead to outages.
Two scenarios often lead to these events: when electricity generation is high but demand is low, and when electricity generation is low while demand is high. Such scenarios put stress on the grid and power infrastructure.
When these critical events occur, they can cause minor to severe damage to electrical equipment. A voltage sag, for example, can cause data hardware to fail or reboot unexpectedly. Voltage surges can overload sensitive computer components and destroy them.
These issues can be catastrophic for data centers that must always be up and running. Outages and damaged equipment can lead to downtime, data loss and even worse outcomes. This is why disaster recovery planning and backup solutions are necessary to minimize the impacts of unexpected issues caused by grid imbalances.
How data centers can support the grid
Here are a few strategies data centers can employ to better support the electrical grid:
Switch to renewables
When the electrical grid is under stress to meet high demand, operators might have to turn to fossil fuel-based energy sources to ramp up supply. Given the environmental impact of doing so, it is not ideal. The state of renewables, however, is not yet mature enough to support a full grid transition.
Data centers should switch to renewable energy sources whenever possible and encourage energy suppliers to invest in renewable grid infrastructure expansions and upgrades. While not an immediate fix, the near-term interest and demand will drive long-term change, building toward a more sustainable energy system.
Build their own energy production and storage assets
Data center admins can invest in and build their own energy production systems and storage assets to help balance the grid.
Data centers should switch to renewable energy sources whenever possible and encourage energy suppliers to invest in renewable grid infrastructure expansions and upgrades.
For example, data centers could deploy small modular nuclear reactors as safe, renewable sources of consistent and reliable power. According to McKinsey & Company, this could bring additional capacity and help provide supplemental power to data centers to complement the energy they receive from the grid. Hyperscalers, in particular, could create a differentiated advantage with nuclear power and find it more affordable than grid rates.
Other examples include building an on-site microgrid, borrowing energy from uninterruptible power supplies and backup generators, as well as using fuel cells and different types of battery storage to alleviate strain on the grid system. When combined with effective energy management strategies, these alternative options can help data centers become more self-sufficient and manage their supply without placing unnecessary strain on the grid.
Reimagine grid architecture and data center energy infrastructure
According to the American Council for an Energy-Efficient Economy, data center developers must work with utility and grid balancers to improve facility design and integrate the architecture with regional infrastructure and the grid. This can help data centers reduce overall energy consumption and improve the grid's reliability and resilience.
Set up demand response programs
According to the U.S. Department of Energy, demand response enables data centers to reduce or shift their electricity usage during peak periods in response to time-based rates or other forms of financial incentives.
With energy demand rising, response programs are becoming a fundamental tool for electrical grids. Such programs enable data centers to shift data-processing workloads to times when the grid is less congested or renewable energy sources are more available -- and receive monetary compensation for doing so. Modern grid technologies also enable data center operators to flag production operators to increase or decrease energy production, which provides them more time to adjust supply.
A challenge to demand response is ensuring that data centers have the energy reserves they need while participating in the program. The risks and potential costs might not be worth it in comparison to the additional revenue generated from the demand response. Admins should carefully consider participation.
Real-life use cases
According to Google, the company uses software that enables external power system partners, such as grid operators, to send alerts about upcoming supply constraints. For example, if an extreme weather event, like a prolonged heatwave, is incoming, the grid operator sends a notification to Google. Google's software will then generate hour-by-hour instructions for data centers to limit non-urgent compute tasks and reschedule them for after the event has passed. Some tasks even get rerouted to specific data centers on different power grids. This demand response program helps relieve high stress on local grids.
According to Amazon, the company has invested in more than 500 wind and solar projects globally to address grid constraints and provide new sources of clean energy to the grid. Many of these projects are being launched in regions where the electric grid is heavily dependent on fossil fuels. In Maryland, for example, Amazon is converting a coal mine site to a solar farm on a brownfield -- land that's been abandoned due to industrial pollution. By investing in projects and collaborating with grid partners, Amazon helps accelerate the clean energy transition while adding capacity to the grid.
The future of the electrical grid will intertwine with data centers. Data center operators should partner with commercial and industrial entities to drive faster, more innovative, clean energy and transmission infrastructure. They should also encourage utilities to invest in grid-enhancing technologies like dynamic line ratings and advanced power flow controls.
Jacob Roundy is a freelance writer and editor specializing in a variety of technology topics, including data centers and sustainability.
