From Seattle to Scandinavia, Microgrids Are a Vital Ingredient to the Data Center Mix

SEATTLE, WA — Power, power, power. That may be the mantra of data center operators doing site selection. But there are lots of ways to meet that need, and some of them are still in their early days. That’s why CapRE created a panel titled “Microgrids & Power Generation: How to Build a Secure, Reliable On-Site Energy Source” for its Seattle and Pacific Northwest Data Center Summit in November. Below, we highlight one of the questions which both featured panelists in this discussion dove deep into.

New Square“Let’s drill down a little bit and talk more about power generation. Going beyond the broader conversation of power, we’re talking about on-site generation, fuel cells, renewable energy, and how to take advantage of any incentives,” suggested Moderator Brian Klebash, Founder and CEO of CapRE. “Let’s talk about the differences between public and private power sources. What are the options here in terms of sources, distribution, transmissions and public and private?”

First, Mattias Ganslandt, CEO and President of Multigrid Data Centers provided a look into the global perspective. “What we’re seeing in the European context is that there is both scope and incentives for the use of the energy storage, as an artificial or regulated inertia in the market,” he continued, preparing to wrap up his remarks. “So it’s not really inertia, it’s a fast-frequency regulation resource. But also we are seeing that some local generation capacity can be used as a complement to both hydro and wind.”

“And I think from a global perspective, I totally agree that there are certain local grids where you won’t run into a problem,” concluded Ganslandt. “But with the growth of Cloud computing globally, you certainly need additional resources [in addition] to wind. In order to meet the requirements of the grid.”

Austin Coover, Business Lead & Key Customer Manager, Seattle City Light

With that, Austin Coover, Key Customer Manager at Seattle City Light chimed in. “I think that from the local perspective, it may be that we are insulated from that change. For the time being. But that will only last so long,” he predicted. “We may be the last to change, as a utility, because we have, essentially a large battery, but that doesn’t mean that the changes that are sweeping the nation and the world, with respect to the utility business model – and there are a lot of business models that are changing and/or failing dramatically – and we will be slower to respond because of the security, but that will only last so long. Because of a lot of penetration of distributed generation. And there is a lot more solar needs, and even wind, coming into our territory.”

“Let me just stress one point in this respect, and that is that, one of the most significant areas where Cloud computing is growing fastest is in the Nordics in Europe,” added Ganslandt. “So a lot of the large web-scales, the hyperscalers, are moving into the Nordics. And interestingly, the hydro-capacity in the Nordics, the hydro-resource corresponds to giving one Tesla power factory to every family on the planet. So that’s sort of the story that has kept on the hydro side. But on the other hand, it’s still a market where the expansion of new generation capacity comes from wind. Causing problems with variation in frequency and also in the capacity of peak load.”

“And I think that it needs to be said that, with the growth of Cloud computing, and very much emanating from Seattle, the hyperscalers and web-scale companies are having system effects on the power system. And there needs to be sort of additional resources. Not only hydro, because we can’t expand hydro much more,” he stressed.

“I don’t mean to hijack but I’m curious to understand if you see a path for a utility like Seattle City Light, operating so much on hydro, to find the proper incentives to start utilizing the micro grid and some of the technologies that you’re working with,” posed Coover.

“Not necessarily. I’m saying that to the extent that you have this great resource in terms of hydro, it might be worthwhile, considering whether you can expand production and make this region even more valuable as a potential location for hyperscale, even beyond what you can do with your hydro,” Ganslandt replied.

“For us the point is not to do any off-grid generation, as such,” he continued. “Because ultimately we want very cost-effective energy and in our context, cost-efficiency in this respect would be, something around 3 cents per kilowatt hours. And that’s sort of the level that you want to get down to in terms of production costs. And then of course the grid needs to be sufficient to compete with on-site generation. but typically with a large scale system, the grid is more than compensated for, in terms of the kinds of efficiencies you can get from largescale generation. I would guess that it’s probably the case that with the hydro resources in the Pacific Northwest, you can probably bring in a lot more renewable energy resources from wind and other sources and have a lot more compute being done here, with that kind of resource.”

For more coverage of this panel, check out earlier CapRE Insider Reports: