How Can Data Centres Help the Grid?

Increased global electricity demand and the shift away from carbon-based fuels is having a huge impact on the electricity distribution network (the grid). This impacts the grid in many ways including reduced spare capacity and increased grid frequency instability.

Not only is data centre (DC) electricity demand growing, but increased demand is also starting to be felt from newer, low-carbon technologies such as (a) transport in the form on lithium-ion battery powered electric vehicles (EVs) and (b) the transfer from gas or coal heating to electrically powered heating in the form of air source heat pumps (ASHP – electrically powered units that extract heat from the air and transfer it into the home).

Grid frequency stability is becoming increasingly difficult to maintain; this is as a result of the gradual transfer from large-scale coal, gas and nuclear power generation to medium-to-small scale distributed power generation in the form of wind and solar farms. Although renewable sources generate power cleanly, they are not able to respond to fast changes in grid demand, e.g., in the morning when we all switch on kettles, toasters and electric showers.

Large power stations have enormous turbines with rotating synchronous inertia which act like a shock absorber to changes in demand. Distributed renewable power sources that are sat behind inverters, even large wind turbines, can’t perform this function, so the grid becomes less able to deal with changes in power demand. This can lead to a drop in the frequency of the grid supply voltage (ideally fixed at 50 Hz) and subsequently instability / asynchronicity between different parts of the grid. The worst-case scenario is a large-scale power-outage as the grid cannot operate within necessary parameters as happened in August 2019.

The above issues are compounded by the rise in data centre power demand, particularly from the explosion of hyperscale facilities over the past five years or so. It is estimated that data centres currently consume 200-250 TWh a year, equivalent to approximately 1% of global electricity use (10% of this is understood to be purely in cryptocurrency mining). By comparison, the UK’s 2020 usage was around 330 TWh. Forecasts vary, but DC demand is expected to increase to between 3%, and as much as 9%, by 2030.

The UK, and many parts of Europe, are seeing large DC companies buying up all the spare grid capacity. In some regions, there is no spare power available above 1 MW for at least a decade. Although a lot of the DC operators never use all the power they contract, this demand, along with the decommissioning of large-scale generation plants, puts pressure on the network.

What can be done?

Governments and utility companies are responding to these issues in a number of ways. One solution is to use battery energy storage systems (BESS) to support the grid in times of high demand. This involves connecting large (1.0 – 250MW+) lithium-ion battery farms to the grid to provide some of the following functions:
• Store energy from renewable sources in times of low demand.

• Limit supply fluctuations into the grid due to intermittent renewable energy generation.
• Peak shaving – supplying power back to the grid in times of high demand to prevent the need to spin up large power stations.
• Unplanned demand support due to unexpected power station outages, low wind speeds or errors in demand forecasting.
• Frequency response which involves connecting the BESS to the grid in direct and immediate response to drops in the grid voltage frequency. This can include:
• EFR: Enhanced frequency response – 1.0-50 MW connected in less than 1 second.
• FFR: Fast frequency response – minimum of 1.0 MW connected within 10 seconds.
The above compares with Short Term Operating Reserve (STOR) generation, which requires a provider to connect a minimum of 3.0 MW of gas or diesel generation to the grid within 240 minutes to support forecast periods of high demand.

What about data centres?

The utility companies in some countries, where the grid is coming under particular pressure from large (hyperscale) data centre loads, for example Ireland and Denmark, have introduced measures to curb the impact of large power users on the grid. FFR has become one key tool to help and is often now a pre-requisite for connection to the grid.

When the grid frequency drops below a defined threshold, the data centre must transfer its critical load to the UPS (uninterruptable power supply) batteries. This reduces the load on the grid which, in turn, helps the grid frequency to recover in seconds. To achieve this, DC operators must increase the size of their UPS battery storage slightly to cover the additional time the UPS might have to operate.

In order to contract utility capacity in these regions, DC operators must provide the FFR facility. The DC operator does however receive financial reward for providing this facility when required.

Final thoughts

Many parties, including the government and utility companies, are working on these difficult issues as we transition to a zero-carbon, higher demand world. There are still a huge number of unknowns, such as how quickly will people take up EVs and ASHPs, can DCs become more efficient and will the industry respond quickly enough to scale up BESS systems?

Although we’ve not considered global energy provisions here, the fuel supply issues of Spring 2021 show that the world needs to think seriously about energy security and reduce its reliance on imported electricity and gas. For instance, the UK National Grid are considering a 100% shift from natural gas to hydrogen by 2050.

What we do know is that the coming years will require a seismic shift in our approach to power generation, distribution and demand in order to manage the grid and keep the lights on continuously. Data centre operators will need to take more of an active role in supporting the grid - signing up to renewable PPA (power purchase agreements) will not be enough in the coming years. This may lead operators to look at new markets where supply capacity in still available – but this will be dependent on geographic connectivity and latency.