Issue link: https://cp.revolio.com/i/860140
12 | THE DATA CENTER JOURNAL www.datacenterjournal.com direct investment options for alterna- tive energy. "Large data center opera- tors have also contracted directly with off-site wind and solar farms to secure utility-scale clean energy," said Binkley. But the real effects come not when the utility carries on as it would have re- gardless of the investment, but when it tweaks its power mix in response. "An important consideration is whether the supply from the utility supports the creation of net-new renewable energy on the grid, or is it business as usual," he said. "Many data center operators are looking to source net-new clean- energy projects in the same utility grid as its data centers to more directly align the sources and uses of clean power while increasing the quantity of renewables on the grid." So if the data center operator's investment means the utility ends up with more alternative- energy production capacity than it would otherwise have had, that invest- ment makes a tangible difference. How MucH difference does it MAke? e effect on a utility's energy mix thus depends on how much data center operators are willing to pursue these alternative-energy options. Although nationally that effect might be small, it can be much more prominent region- ally. "In certain utility markets, data centers are responsible for a large por- tion of the growth in energy demand. It positions data center operators to become active partners with utilities helping to shape changes to the fuel mix over time," said Binkley. us, data center operators can have an effect, but they still only repre- sent a couple percent of total U.S. en- ergy consumption, according to some estimates. Given that wind and solar, being intermittent energy sources, can- not provide the same steady power as conventional sources, the opportunity has fundamental limits. Also, despite the headlines, alternative energy sources constitute only about 12% of total energy production in the U.S., according to U.S. Energy Information Administration data. Perhaps surpris- ingly, wind and solar together are a paltry 3%. ese numbers don't mean growth in alternative-energy use is impossible, but momentum has been slow in coming. Data center operators therefore only have so much leverage. Between their relatively small (albeit growing) portion of total consumption to the already small role alternative energy plays in total production, the opportu- nity for data centers to become power players seems small. For different reasons, other power sources are out of the question. Nuclear has had reputa- tion problems for decades, and the costs—not to mention the practical dangers—are high. Coal and natural gas carry lots of political baggage. Hydropower requires expensive, large- scale infrastructure and has environ- mental consequences. Certainly, small steps can add up over time, but it's im- portant to keep a balanced perspective on alternative energy and data centers. A world—particularly a data center world—that involves only solar panels and wind turbines is unrealistic. At the company level, greater opportunities will naturally be avail- able to companies that consume more energy. Binkley said, "Larger operators will, in general, have more leverage and greater cost efficiencies related to power procurement and renewables, but actions across the scale spectrum will support a cleaner power grid." conclusions Data centers are under increasing scrutiny for their power consumption, so corporate image, customer demand, environmental concerns and the threat of regulations drives operators to become more active in the power mar- ket. But getting into infrastructure is essentially impossible for conventional sources, so that leaves alternative en- ergy sources. Not only is infrastructure (particularly for solar power) relatively inexpensive and scalable, but these sources create no pollution (at least while operating—their manufacture and disposal are a different story). Such factors have led data center operators, particularly large and high-profile ones, to explore investments in this area. For most companies, however, building more than a modest rooop solar array is impossible. at leaves more-indirect options: specifically, working with a utility to buy (perhaps "buy") alternative energy, or otherwise provide an incentive to increase the utility's fraction of that kind of energy. Nevertheless, because data centers still represent a small portion of total ener- gy consumption, and because alterna- tive sources such as wind and solar are such a small part of the power mix, the opportunity in a broad sense is limited. at is, data centers may buy up wind and solar power, but doing so oen means less is available for consumers in other industries. Some arrangements increase the portion of alternative energy in a local grid, but the aggregate effect remains small. Moreover, from a practical perspective, data centers can- not operate purely on wind and solar: they need the kind of steady power that conventional sources (including nuclear) are better at providing. us, alternative-energy purchas- es and other investments by data center operators are gimmicky in some cases, but in others they do have a practi- cal effect, if only locally. On the basis of current power trends, it's tough to imagine wind and solar becoming the dominant supplies that some people envision. So, data center operators will play an increasing role in power gen- eration, if only as investors, but the net effect is likely to be small. Only time will tell whether these small changes will lead to larger ones. n