Data centers are stretching the generation capabilities of the U.S. electric network. Solutions to America’s energy crisis focus on increased investment in the electric grid, creating new utility rate approaches, and capturing natural gas to build data center power plants.
Investor-owned utilities are working with regulators to find new approaches to serve energy-intensive projects such as data centers. American Electric Power is proposing to create a new rate category with data centers increasingly angling to come online in the Central Ohio region. The plan recently filed before the Public Utilities Commission of Ohio would place data center customers and cryptocurrency mining and mobile data center operations into a new category to insulant other customers from shouldering those costs. Those impacted by the proposal would include data centers with a load greater than 25 megawatts and cryptocurrency/mobile centers with loads greater than 1 megawatt. Those customers must agree to specific requirements – including a 10-year commitment by data centers to pay for 90% of the energy they anticipate needing – before the utility pursues infrastructure buildout to serve them. Data centers would have to meet that 90% obligation even if they utilize less energy than anticipated.
The Federal Energy Regulatory Commission (FERC), which oversees wholesale electricity markets, adopted new rules that are designed to make it easier for big regional transmission projects to get approval. FERC approved two rules, one that will require companies that produce and transmit electricity to weigh factors such as supply and demand over at least two decades and another that addresses permitting critical projects in areas that lack adequate transmission capacity. The long-term plans will need to account for the impact of extreme weather tied to climate change along with the cost of projects. By expanding transmission capacity, regions hit by weather disasters will be more resilient because they can access power from other parts of the country.
Developing new, on-site energy production is the short-term solution for energy-intensive projects that cannot gain electricity in the near term from overloaded electric utilities. Natural gas combustion turbines are a new energy power source for data centers near a major natural gas line. Dedicated gas turbines can also combine with energy storage systems, allowing data centers to store excess energy during times of low demand, ready for use in periods where demand is higher. Combined cycle technology additionally increases electrical efficiency by more than 15% by using the waste heat from the gas turbine to produce steam in a heat recovery steam generator, which powers a steam turbine according to Siemens. This ingenious setup requires slightly more space but generates the highest amount of electricity from the fuel combusted in the process. Electrical efficiencies of up to 63% and more might be achieved again according to Siemens.
Building an on-site power plant for an energy-intensive project is an aggressive solution for meeting a project’s energy demand and is not a simple process. First, these sites must gain access to a large amount of natural gas which usually means a connection to large-scale natural gas pipelines. States like Ohio with a boom in shale natural gas are fortunate to have substantial natural gas pipelines traveling across the state. To support building connections for a combined natural gas combustion facility at an energy-intensive site, communities and companies may want to utilize Ohio’s new Infrastructure Development Rider (IDR) through the PUCO that permits natural gas utilities to assess their customers a charge to cover the cost of developing natural gas infrastructure for job-producing sites as supported by JobsOhio and regional economic development leaders.
New regulations, technology and power sources will be the key to addressing America’s current energy crisis as regions and companies work to meet the increased demand for electricity in the next step of the Information Age.
