Feb 21, 2025
Data centers need more power, but infrastructure lags. Renewables help, yet challenges remain.
Our digitally dependent world is facing a looming problem: we need ever more power-hungry data centers to keep the information flowing, but we lack the infrastructure to supply that power. One solution is powering new data centers with renewable energy. It is a good idea. But there are significant challenges to overcome.
Companies like Commonwealth are now working side by side with data center and power industry representatives to address the challenges head on. Renewables could ultimately prove invaluable to keeping data centers running and the digital world pressing forward.
The Scope of the Power Problem
The International Energy Agency's (IEA) 2024 annual report reveals that the world's data centers collectively consumed 460TWh of energy in 2022. The agency estimates annual power consumption could be upwards of 1,000TWh by 2026. That would be a worst-case scenario, but many people in the industry see no reason it will not be realized.
Data centers are notoriously power-hungry. And with the introduction of AI across nearly every industry, data center power needs are only going to increase. Data centers will continue consuming an ever-larger share of the total power we produce. Without a better grid to support them, there is very little choice but to lean more heavily on renewable sources to keep our data centers running.
Possible but Challenging
Turning to renewables for more data center energy makes good sense. In fact, it makes sense to take advantage of every source of power we can find. Fossil fuels have been fully developed, so there are no worries there. The resurgence of nuclear power as a cleaner and safer power source is also a big plus. Now we need to put time and effort into upgrading renewables so they can contribute more.
There are challenges, for sure. Here are some of them, as they relate to data center energy needs:
1. Intermittency
Sunlight and wind are the primary engines that drive renewable energy. But because weather changes daily, the variability of solar and wind power creates intermittency issues. Data centers cannot afford intermittency. They need uninterrupted and consistent power 24/7. Fluctuating power is not good for sensitive data center equipment.
2. Storage
Storage is a significant concern with any renewable energy system. It is amplified in a data center scenario because storage is seen as a way to protect against intermittency. But current storage solutions are expensive. They also require a significant physical footprint.
3. Grid Integration
The inability of a renewable project to supply a data center fully and consistently with energy inevitably means that the renewable project needs to be integrated with the existing grid. Integration is wrought with hurdles, not the least of which is the inability to address interconnection problems fast enough to keep up with the pace of data center construction.
4. Balancing Supply and Demand
Data centers operate around the clock. Their energy demands can fluctuate somewhat, but overall demand is fairly consistent. As for renewable energy production, it is not. When renewables do not meet a data center's energy needs, the demand must be made up from other sources. Balancing supply and demand across multiple sources gets tricky.
Even though powering data centers with renewables is challenging, it is also very possible. The power and data center industries now have an opportunity to come together and work out the solutions that will drive data centers into the renewable energy future.
Commonwealth sees a bright future ahead. We are already working on ways to overcome the challenges of renewable energy in the data center space. We are thrilled to be part of building the future.
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