Data centres stand as the backbone of modern technology, enabling countless services and applications. However, this exponential growth in digital infrastructure comes with a significant energy demand, despite efficiency improvements in IT hardware and cooling systems. A shift towards sustainable solutions, including renewable energy sources and potentially hydrogen to power these data centres, is necessary.
Data centres represent 3% of the energy consumption in the world (416 TWh). In 2030, they could represent more than 10% - if nothing is done. The growth of the sector shows the necessity for a big change regarding the energy sources fuelling these data centres.
Industry leaders are well aware of this situation and have already started to improve their sustainability record by reducing their carbon footprint and their energy consumption. The EU Code of Conduct for Data Centres further encourages such voluntary adherence to best practices. But it’s not only a voluntary commitment on a pilot project stage as the European and US legislators have already imposed regulatory compliance. Just a few recent examples:
Data centre operators are today (and will be obliged in future) securing renewable energy by agreeing Corporate PPAs with renewable energy producers. Those contracts are not easy to navigate through, they are long term, complex agreements, often with a financing angle, as the electricity producer will have to finance its (newly built) installation. Key challenges include contract duration, mutual (bank or parent company) guarantees based on respective counterparty risk assessment, termination grounds and liabilities. Foremost the data centre operator has to secure the correct issuance and ensure correct transfer of the guarantees of origin (or comparable environmental attributes).
Such transfer of guarantees of origin can today be made on a cross border basis. Such transfer will become increasingly important as data centres will operate under different jurisdictions and it can be of utmost importance to contractually secure the flexibility to transfer guarantees from one country to another to ensure regulatory compliance for each of an operator’s respective data centres.
However, renewable energy production is often dependent on exterior factors such as wind power or sunlight. In order to maintain a reliable energy source at any time, hydrogen could represent an alternative power and storage solution in the future.
Interest in using green hydrogen, produced by decarbonised or renewable energy sources as a replacement for diesel back-up generators, and ultimately as a primary power source for data centres, has risen in the past few years.
When considering the opportunities for hydrogen in powering data centres, it is important to consider the difference between using the hydrogen as an energy storage system or as an energy generation system. In addition, it is crucial to carefully follow the EU and International requirements in order to ensure that the hydrogen qualifies as green or low carbon hydrogen.
The potential of hydrogen for data centres typically falls into the energy storage category, where electricity (from renewable sources) is utilised to generate low-carbon or green hydrogen which in turn is transported and stored before being converted back into electrical energy whenever needed. Two potential methods for converting hydrogen back to electrical energy are hydrogen fuel cells and hydrogen-powered gas turbines.
Fuel cells are well-suited for smaller-scale applications, such as replacing diesel generators in single facilities, while turbines excel in generating high megawatt outputs.
Typical data centre power autonomy comprises 24 to 48 hours’ fuel storage. The diesel generators have to be tested regularly – and this requires diesel consumption just for testing purposes alone. Not very important on an individual data centre basis but significant on a global level. A growing number of data centre operators would like to end their reliance on diesel fuel for emergency backup power. Hydrogen is being advanced as a possible successor to diesel fuel generators.
The space requirement for hydrogen deployment is at least 2.5 times larger than that required for diesel back up generation, while capital expenditure could be five times greater or more. With the increasing push towards achieving net zero, it is widely expected that both the capital expenditure and footprint requirements for green hydrogen energy storage systems will decrease.
This decrease, together with the significant government and private investments, may continue to sway the balance in favour of hydrogen to decarbonise data centres.
For more information, please contact Sibylle Weiler.