Get in touch
Get in touch

Please enter a few details

I agree to the terms and conditions


Data centres and the grid part 2: Active energy players

The second part of this two-part report examines how data centres are becoming active participants in energy grids from demand-response to on-site generation and micro-grids.

In part one of this report series we examined some of the macro-trends that are affecting the design and operation of energy grids.

These range from the impact of renewables – leading to more volatility in supply – to changes in demand caused by more electric vehicles. Aging infrastructure, as well as cyber attacks, could also increase the likelihood of outages in the future according to some experts.

In the second part of the series, we look at how data centre operators are responding to these trends, and potential threats, and consider how the relationship between data centres and utilities is likely to evolve in the future.

Active energy players

As previously outlined in part 1, data centre operators have always taken a judicious approach to the grid through the use of UPSs, diesel generators and multiple feeds.

However, there are a number of emerging and potentially disruptive technologies and strategies that could see more data centres move from being relatively passive consumers of energy to active participants in energy generation, distribution and storage.

For example, Google, Amazon, Microsoft and Apple have all made significant investments – running into the billions – in renewable energy projects and also successfully lobbied utilities for new mechanisms such as green energy tariffs.

More operators are likely to become active energy players in the future through initiatives that include, but are not limited to, some of the following:

Demand response

The ability for data centers to utilize generators to disconnect from, or even feed power back into, the grid has led some utilities to develop new business services to encourage this kind of activity. However, despite the ability to lower energy costs, or generate revenues from capital investment in diesel generators and other on-site generation, some data centre operators are skeptical of mechanisms that could potentially impact availability and resiliency. This may change in the future if shortfalls in utility generating capacity make participation in demand response schemes more financially valuable for operators.

There is also the potential that in the very long term developments in so-called distributed resiliency – where there is greater reliance on distributed IT infrastructure rather than generators and UPSs at a single site – could mean that data centres eventually scale-back generator capacity.

On-site energy generation

Most large data centres already have some form of on-site generation in the shape of diesel generators. However, this equipment is traditionally used as a secondary source of power to provide redundancy in the event of issues with the grid. However some operators take a different view and regard on-site energy generation – from fuel cells, combined heat and power plants, gas turbines or renewables – as their primary source of energy with grid as the backup. As grid instability and volatility increases, it’s expected that – despite a move towards distributed resiliency – some operators will be less inclined to rely on the grid and invest in more onsite generation.

Survey results from industry body Uptime Institute in 2017 revealed that 21 percent of organizations have adopted some form of on-site primary power generation to date. A further 22 percent of companies were considering adoption, according to Uptime.


Aligned with this move towards greater adoption of alternative forms of on-site generation is interest from data centres in becoming active participants in micro-grids. On a small scale this could for example include a data center located on a campus shared with office-space and other buildings, which are all connected to a solar farm or other form of on-site generation. Sophisticated management software is used to manage how the energy is distributed across the campus and to control activities such as islanding (disconnecting from the grid) or even feeding back energy into the grid if it cost effective.

As with many emerging and disruptive technologies it will probably be large cloud data center operators that lead adoption of micro-grid technology. Capital costs will be prohibitive for all but the largest operators. For example, according to estimates from 451 Research, a 1MW wind turbine could cost more than $2 million to build, while a new 1MW solar installation could be around $1 million or more – roughly equivalent to 10 percent or above of a datacenter.

A wind turbine standing in a field.  Many more turbines can be seen in the distance.

Future Outlook 

As with many aspects of the data centre industry, the relationship between facilities and the energy grid is complex and evolving. If existing trends continue then it is highly likely that the grid will become increasingly distributed and volatile. There will continue to be a move away from monolithic, centralized power plants towards smaller-scale distributed generation including a higher proportion of renewables. This presents obstacles but also opportunities for data center operators who may invest in some of this distributed generation capacity – as well as energy storage. A proliferation of new data center capacity – including micro-data centers – at the edge could also see alignment between distributed energy generation and increasingly distributed IT infrastructure. For example, micro-datacenters with integrated fuel-cells.

Read part 1 of data centres and the grid by clicking here.

Future-tech has experience and expertise in all aspects of data centre energy management and provision.  For more information contact us at: