A new study from LUT University shows that the uninterrupted power supply required by data centres can be secured with renewable energy sources. Finland is well-positioned to attract new low-emission, electricity-intensive investments, and data centres can play a leading role in this development.
“The European Commission's rules on renewable hydrogen production could also be applied to data centres, so that they do not place additional strain on the existing power system,” says Professor Samuli Honkapuro based on the study's findings.
The EU requires that hydrogen production plants build the renewable electricity capacity they need themselves and match their consumption with production both locally and over time. This requirement is included in the EU's criteria for renewable fuels of non-biological origin (RFNBO), which govern hydrogen production.
“If data centres were subject to requirements similar to those for renewable hydrogen production, they could contribute genuinely new low-emission electricity to the grid,” Honkapuro adds.
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Wind and solar capacity must be seven times greater than actual demand
The study shows that continuous electricity supply for data centres is technically and economically feasible in Finland using only renewable energy sources at a production cost of around €103–121/MWh. However, the backup power and flexibility required by data centres still need further development and additional investments in electricity generation.
If there is no flexibility in data centres’ demand during the highest electricity price spikes, the pressure to raise electricity prices will grow.
“Essentially, data centres are baseload consumers with continuous electricity demand every hour of the day. Because a data centre's consumption typically can't adapt much to fluctuations in renewable electricity generation, the wind and solar power capacity allocated to it must be substantially oversized,” explains Junior Researcher Altti Meriläinen.
The study indicates that the wind and solar power capacity needs to be roughly seven times greater than the data centre's actual power demand. This means that renewable electricity generation will need to be curtailed significantly during peak production hours if no alternative use for it can be found. In addition, wind and solar power alone cannot guarantee uninterrupted electricity supply for data centres, even with massive overcapacity and battery storage.
Backup power is essential
“If data centres are unable to offer flexibility, they will definitely need a backup power plant running on renewable fuels such as biogas or renewable hydrogen. Its capacity must match the data centre's full electricity demand so that operations can continue through long periods of low wind and cloudy weather,” Meriläinen says.
When this type of backup power capacity is built for data centres to cover grid outages, the same capacity can also be used to balance fluctuations in wind and solar power generation and thereby reduce electricity price spikes.
Lack of flexibility could come at a cost for data centres
If data centres were able to provide even a small amount of timely flexibility, the need for backup power – and therefore also electricity generation costs – would decrease considerably. According to the study, around 10 per cent of well-timed demand flexibility could reduce annual electricity generation costs by approximately 15–24 per cent.
Some data centre computing workloads can be time-shifted. If an operator has several facilities, workloads can also be shifted geographically. In addition, data centres nearly always have technologies such as uninterruptible power supply systems and backup generators that can be used for short-term power balancing or, in exceptional situations, for longer periods. This would require regulation that enables and requires the use of backup power to support the grid.
More information:
Samuli Honkapuro
Altti Meriläinen
The study Techno-economic feasibility of a renewable baseload power supply for data centers was part of the PHOENIX project funded by the Strategic Research Council (SRC).
