How Alternative Energy Can Meet Data Center Power Demands

The rise of AI represents both opportunities and challenges for organizations seeking to increase sustainability. Organizations have struggled to capture and analyze the data needed to implement and fine-tune sustainability strategies. AI eliminates that roadblock, rapidly identifying ways to increase energy efficiency and optimize operational processes in real time.

However, performing these tasks requires an immense amount of energy. According to estimates by Schneider Electric, AI power consumption will increase from 4.5GW in 2023 to as much as 18.7GW in 2028. Total data center power consumption will almost double, from 57GW to 93GW. To meet the load requirements needed for this massive increase in power consumption, data centers are seeking supplemental sources of energy.

At the same time, data centers are tasked with meeting their decarbonization objectives or state legislative mandates. As they make the AI-powered business transformation, they must meet the challenges of increased energy demand by identifying, supporting and optimizing supplemental power generation technologies.

Powering the Data Centers of the Future

Alternative energy is not monolithic. Data centers have a range of options to choose from when transitioning to more sustainable energy sources. Solar and wind are the most prevalent — according to S&P Global Market Intelligence, solar, wind and battery storage capacity accounted for 21 percent of energy generation as of October 2024. That number is expected to rise to 38 percent by 2030.

As promising as that sounds, it’s not sufficient to meet demand, particularly given that 60GW of coal and natural gas power generation is expected to go offline by 2030. In light of that, data centers are looking at nuclear power as an additional source of energy. Retired fossil fuel plants are also being utilized for their infrastructure to bring clean-energy generation online faster.

Against this backdrop, data centers must also consider ways to strengthen and expand the electric grid. The existing grid makes interconnection difficult, restricting the development of data center projects.

Microgrid Advantages

Data center developers and operators need the ability to site their facilities based on cost, disaster risk and other factors. They also demand a reliable power source to meet uptime requirements. There are a variety of innovative grid solutions that can help data centers meet growing load demands while working in conjunction with existing grid infrastructure.

Microgrids have emerged as an attractive alternative to the electric grid. As we explained in a previous post , a microgrid is a small-scale, self-sufficient energy system that powers a small area or single facility. It generates electricity near where it's used and can operate autonomously (island mode) or connected to the main grid.

Microgrids offer data centers greater reliability and the option to utilize multiple energy sources to meet their sustainability goals. An intelligent central controller uses complex algorithms to orchestrate the generation and distribution of energy from multiple systems. Power only has to travel a short distance, increasing efficiency and time to service.

Data Center Power Sources

Solar and wind are traditional choices for microgrids. However, they don’t provide the predictable uptime and capacity to meet today’s data center power requirements. Although battery storage makes solar and wind more viable, most microgrids rely on the electric grid most of the time. Data centers are also exploring other sources to supplement solar and wind.

• Hydrogen microgrids use hydrogen fuel cells that convert hydrogen into electricity through an electrochemical reaction. Hydrogen fuel cells emit only water vapor, making them an exceptional sustainability option. However, they depend on the hydrogen supply chain and require significant energy input to produce electricity.
• Nuclear microgrids use small modular reactors (SMRs) and other nuclear technologies to generate power. Once running, they have a low operational carbon footprint and the potential for very long refueling intervals. They also have high energy density and efficiency for long-term power stability. However, data centers face high initial costs, long lead times for construction, and complex regulatory and safety requirements.
• Coal microgrids use coal-powered generators, typically with combined heat and power (CHP) systems. CHPs produce electricity and thermal energy from a single source, making them about 50 percent more efficient than traditional systems. The established technology and existing infrastructure reduce capital costs.
• Natural gas microgrids use coal-powered generators, typically with combined heat and power (CHP) systems. CHPs produce electricity and thermal energy from a single source, making them about 50 percent more efficient than traditional systems. The established technology and existing infrastructure reduce capital costs.

How Wesco Can Help

Wesco has specific expertise in coordinating and distributing tailored solutions for the design, engineering and materials packaging of data center power generation and distribution systems. We take data centers from inception to reality, functioning as one unified team to ensure success. We are committed to delivering solutions that build, connect, power and protect every step of the way.

Our services begin with site selection and extend through the seamless coordination of engineering services, project management and material supply. Our supply chain expertise and extensive manufacturer network give us the agility to ensure that materials are delivered onsite and on time. From alternative energy sources to grid hardening and modernization, Wesco is your partner for innovative data center power solutions.