Realizing Clean, Firm Power for Data Centers

The digital age has given rise to an unprecedented demand for data centers, those critical hubs that store, process, and disseminate our world's expanding sea of data. However, with great power comes great responsibility, and great power requires great power! The opportunity now lies with data center developers and technology companies to lead the way in adopting clean, firm power solutions.

The Current Hurdles

Today, many tech companies and data center developers face the perceived impossibility of powering new facilities with clean energy in the short term. 10+ year utility transmission planning processes and the necessity for “5 nines” uptime complicate the shift to carbon-free sources. However, while technologies like advanced nuclear and next-generation geothermal are still developing, there are underdeveloped pathways for achieving reasonably priced, reliable power from Carbon-Free Energy (CFE).

The Untapped Potential of Carbon-Free Power

There are more CFE options available to data centers than are currently deployed by many in the industry for near-term and even medium-term power needs. With the technological landscape rapidly evolving, avenues like nuclear power, particularly through expanding existing nuclear sites, are becoming increasingly viable. But the potential doesn’t stop there; data centers can harness compatible combinations, or “clean teams”, of technologies, including but not limited to nuclear, to replicate the energy services provided by today’s grid.

There are many underutilized CFE tools in the clean team data center arsenal, a few of which are highlighted below:

The Nuclear Regulatory Commission (NRC) has certified NuScale’s Small Modular Reactor (SMR) and many many more SMRs are advancing quickly (at least for nuclear) through the NRC regulatory process. The biggest challenge in deploying SMRs may not be the technology itself but figuring out how to finance first-of-a-kind projects to enable the standardization required for cost reduction, particularly in the balance of plant.
Long-Duration Energy Storage (LDES) options, such as the Form Energy Iron Air Battery, can be critical players in “clean teams” of technologies as Form has shown possible in its analysis, Enabling a True 24/7 Carbon-Free Resource Portfolio for Great River Energy with Multi-Day Storage. As LDES increases, lithium-ion, renewables, and curtailment requirements decrease significantly.

Linear Generator (Mainspring): When PG&E worked with Realize2050 leadership to assess its options for powering 20-50+ MW substations with clean teams of technologies (see our team’s techno-economic analysis on clean alternatives to diesel for PSPS mitigation), Mainspring emerged as a top option when evaluated on capacity factor (a critical factor for data centers) vs. price. The relative price of Mainspring’s linear generator depends on whether it is fueled by natural gas, RNG, or hydrogen, but its energy conversion efficiency, fuel-agnostic design and fast ramp rate capabilities help optimize its long-term cost structure.

*Techno-economic Analysis of “Clean Team” Options to Displace Diesel at PG&E Substations During Public Safety Power Shutoffs*

Many tech companies are in “wait and see” mode with early commercial deployments of LDES, SMRs, and other novel technologies. However, they could be taking more proactive steps to craft a carbon-free future with existing technologies and those that are technically derisked but not yet deployed at scale.

Leadership Must Extend Beyond Big Tech Companies

Amazon, Google, and Microsoft in particular have been showing leadership - in their own unique ways - toward sourcing clean power for their growing data centers. According to Jigar Shah, Microsoft alone has said it will require 10,000 MWs for ChatGPT alone, and it is already aggressively pursuing clean power options for those MWs.

While the biggest tech companies are putting teams of PhDs against energy strategy, the next tier of tech companies must stand ready to lead as well. Mid-sized tech companies have a particularly unique position in the market. They are large enough to influence change yet nimble enough to adapt and innovate quickly. This agility allows them to explore and implement novel carbon-free energy solutions more swiftly than their larger counterparts. By leveraging different mechanisms such as financing models, innovation challenges, and collaborative investments, these developers can accelerate the commercialization of clean energy technologies.

A Roadmap Toward Carbon-Free Data Centers

To facilitate this transition, the following steps can be instrumental:

Techno-economic Analysis: Developing a techno-economic analysis of clean, firm power options is critical to understanding the option set, which can then be customized for each potential data center location. The analysis should evaluate technology categories and specific manufacturers capable of meeting the energy demands of large portfolios of data centers.
Roadmap for Deployment: Based on the techno-economic analysis, organizations should establish an actionable roadmap to work toward carbon-free teams of technologies for their data centers. Organizations will quickly realize certain gaps in the near-term ability to execute those plans, which can possibly be resolved through innovative financing and collaboration mechanisms.
Innovative Financing and Collaboration: Exploring various financing mechanisms and organizing collaborative partnerships can lead to creative solutions and joint investments in clean power.

The Economic and Environmental Payoff

Adopting clean, firm power by data centers can lead to significant reductions in CO2 emissions, which we estimate at around 500K tons of CO2e per year for each data center. An analysis that led even a single data center to accelerate a path toward CFE not only helps in the climate fight but also could present an economically sound investment, with the potential cost per ton of avoided carbon being significantly lower than current market prices for carbon offsets.

The Road Ahead

The path towards integrating clean, firm power into data centers is not just a possibility; it is imperative to realize a carbon-free future. Mid-sized tech companies in particular have the opportunity to be at the forefront of this transformation. By embracing innovative technologies and strategies, they can not only reduce their environmental footprint but also set new standards for the industry. The future of data centers is clean, and the time to act is now.