A Different Approach to Meeting Data Center Power Demands
The data center industry and utilities are facing a critical challenge supplying electricity, but also an opportunity.
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The rapid growth of data centers is posing significant challenges for utilities, as these facilities require massive amounts of power that can strain the grid. Traditionally, utilities have struggled to keep up with the surging demand from data centers, leading to creative solutions like locating facilities in areas with excess power capacity. However, these short-term fixes are no longer sufficient, and a new approach is needed.
Collaboration is Key
Compass Datacenters, a major player in the data center industry, believes that the key to addressing power supply challenges lies in closer collaboration between data centers and utilities. They envision a “co-serve” future where both parties work together to plan, share risks, and invest in infrastructure.
Some specific areas where collaboration could be beneficial include:
- Load ramping: Data centers should provide utilities with clear, multi-year load ramp forecasts to enable better planning.
- Risk sharing: Data centers should commit to paying for a portion of generation and transmission investments, regardless of whether projects are ultimately built.
- Infrastructure investment: Data centers can help by securing rights-of-way and funding substation construction.
- Creative tariffs: Utilities could develop tariffs that ensure data centers pay a larger share of infrastructure expansion costs, protecting residential ratepayers.
Overcoming Challenges
While this collaborative approach holds promise, there are still hurdles to overcome. Permitting processes need to be streamlined to enable data centers to run backup power to support the grid during peak demand. Utilities and data centers must also work together to find ways for data centers to provide more creative solutions for supplying power to the grid.
Source: T&D World
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