DATA CENTRES


Can we cope with the demand for power-hungry data centres?


With the growth in data centre and the subsequent demand for power, driven by AI and other power- hungry applications, could microgrids hold the key? Rolf Bienert, technical & managing director of global industry standards body, the OpenADR Alliance discusses the potential for microgrids in providing flexibility and clean energy


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ata centre capacity is undergoing huge growth right now, driven by the demands of cloud services, artificial intelligence AI and other power-hungry applications.


Here in the UK, there are over 500 data centres already – one of the highest concentrations in the world – and with around 100 new projects in the pipeline. The big tech giants like Amazon Web Services,


Microsoft and Google are all investing billions in building new data centres across the US.


Rethinking the power challenge


While building new and bigger data centres is the ambition, generating enough to power them is the challenge; one that data centre and energy operators are facing. The obvious question is where this power will come from. The power grid is already under pressure and in the process of modernising to cope with the demands placed on it. The industry needs a rethink in the way the way it adapts to these challenges. According to figures from the International


Energy Agency (IEA), data centres account for around 1% of global electricity consumption. But this is changing with the growth in large hyperscale data centres with power demands of 100 MW or more, and an annual electricity consumption equivalent to the electricity demand from around 350,000 to 400,000 electric vehicles. With the rise in AI and the expectation of what it can deliver, the next few years are likely to see big changes, with serious consequences for the energy sector. But at the same time, technology firms are under growing pressure to make data centres much more sustainable.


What are the opportunities?


Microgrids could be the answer in providing a more sustainable and efficient energy supply for data centres. While the concept of a microgrid can vary depending on how they are used, they can be defined as small-scale, localised electrical grids that can operate independently or in conjunction with the main power grid. They can


range in size from a university to a single home. As a global ecosystem, we’re seeing them used in different scenarios, from residential to large campuses. One particularly interesting use case is MCE, a California Community Choice Aggregator, which has established a standardised setup for residential virtual powers plants (VPPs) with OpenADR used as the utility connection to manage the prices and consumption. As a side note, it’s good to see that the MCE project targets low-income areas, which often cannot participate in any incentive schemes. The feasibility and suitability of microgrids depends on factors like the specific requirements of the data centre, regulatory environment and the long-term goals for sustainability, resilience and cost-efficiency. The real value is in helping overcome grid constraints and improving reliability by managing consumption and maintaining power during grid issues. For data centres that require uninterrupted operation, this ability to deliver resilience is critical.


Sustainability is another important advantage. By integrating renewable energy sources, such as solar or wind power, and energy storage,


microgrids can significantly reduce carbon footprint. While in terms of cost savings, they can reduce operational costs by utilising local power generation and demand-response strategies. Microgrids are modular, which means they can


grow as the data centre’s needs evolve. Plus, when it comes to regulation, they face fewer regulatory hurdles compared to other options, like nuclear power, because they can operate mostly ‘net zero’ on the grid connection.


Looking at the challenges


But for data centre operators and investors trying to address power supply and stability issues, the use of microgrids can also mean challenges.


The first of these is the start-up costs. While we talk about a reduction in operational costs once up and running, set-up costs for microgrids can be high, requiring significant capital investment especially for larger data centres, so important to bear in mind.


Sustainability may be a big plus point, but the use of renewables like solar and wind depend on the weather – and the weather can be fickle. This necessitates robust storage solutions, backup power or large grid connections to ensure reliability and stability at all times. It’s also important to stress that the effective integration of these various distributed energy sources and systems can be technically challenging, so working with good integrators and partners is paramount.


When it comes to powering data centres,


microgrids are not the only option being considered. Alternatives like small modular nuclear reactors (SMRs) are also be touted as potential power sources. In my mind, SMRs are not in competition with microgrids but could become an important baseline component of them. In their favour, SMRs provide a constant, high- capacity output, ideal for 24/7 operation, and a zero-emissions power source. Once operational, they offer stable costs over decades. But they also face challenges like stringent regulation and public opposition to development, while a nuclear plant, even a small-scale one, involves substantial upfront investment. This is aside from the risks around nuclear waste and safety. The bottom line is that data centre capacity is


growing and, as result, we are going to need a high continuous supply of power. Microgrids can offer a way to manage this; a cleaner, greener and better alternative with options for a more resilient and responsive energy infrastructure. Decentralised power through a network of microgrids could help dynamically manage power loads and optimise renewable energy sources – especially as demands on the grid continue to grow as we march towards an AI- powered future.


16 BUILDING SERVICES & ENVIRONMENTAL ENGINEER JULY 2026 Read the latest at: www.bsee.co.uk


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