How Microgrids Introduce New Data Center Economics

on July 8, 2020

Data centers are increasing in number across the US and around the globe. They are the new industrial factory of the modern digital economy and require a massive amount of power to support their high-tech operations. Data centers are located in every state, but the largest hyperscale data centers are sited where power is the least expensive. However, low-cost power does not ensure highly reliable power, so the standard data center design includes backup power systems that can carry the facility, computing and infrastructure loads without interruption during a power outage.

These backup power supplies are typically large arrays of diesel generators connected in parallel strings to create maximum resiliency when coupled with battery based uninterruptible power supplies (UPS). However, diesel generators present a handful of challenges to data center operators. For example, they have high emissions, which makes environmental permitting and reporting burdensome. Additionally, they are expensive to own because of the high upfront cost and ongoing operations and maintenance costs. They also sit idle for most of the year and do not provide grid services, which makes them an expensive drag on both the balance sheet and income statement of the data center operators.

These generators are an essential component in mitigating operational risk in the data center. Still, they lack the higher level of resiliency as well as other key benefits that a microgrid system offers.

With all of this in mind, let’s take a few minutes to break some legacy paradigms around economics and the overall cost of today’s microgrid solutions.

Overcoming common economic myths surrounding microgrids
The first challenge we often hear about is that microgrids are expensive to deploy and maintain. The reality is that it depends on a variety of factors, and with innovative business models, it can be significantly cheaper than traditional alternatives.

It is crucial to consider the total cost of an outage, in dollars, lost time, reputational damage, and so on, and then compare it to the price of a resiliency microgrid system.

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Fractal Energy Storage ConsultantsHow Microgrids Introduce New Data Center Economics