A recent study conducted by Bloom Energy indicates a notable trend towards on-site power solutions, with one-third of hyperscalers and colocation providers planning to have fully self-powered campuses by the year 2030.
The report highlights a growing disparity between the expectations of data center operators from utilities and what utilities claim they can feasibly deliver.
In key hubs like Northern Virginia, the Bay Area, and Atlanta, utilities are projecting power-delivery schedules up to two years longer than anticipated by hyperscalers and colocation providers – a discrepancy that has worsened over the past six months.
Developers are reevaluating how power is distributed within facilities. Nearly half of survey respondents (45%) predict the adoption of direct current (DC) distribution architectures in new data centers by 2028, reflecting a shift away from traditional alternating current (AC) designs to enhance efficiency and align better with modern IT loads.
Power Play
Responding to the report, Bill Kosik, PE, CEM, LEED AP, mission-critical sector leader for HED, an integrated architecture and engineering firm, shared with DCN that for gigawatt-scale data centers in the next decade, gas turbines and gas engines emerge as the most reliable on-site firm-power option.
Nevertheless, he cautioned that the capacity and deliverability of natural gas present significant challenges in this transition.
“At 500 MW, onsite fuel cells or turbines resemble a new power-plant-class load, implying that constrained regions may necessitate new laterals, compression, or pipeline upgrades with multi-year lead times,” he elaborated.
He also noted that fuel cells can be scaled in large blocks where gas resources are abundant, and emissions regulation is manageable.
“Long-duration storage acts as a force multiplier, bridging gaps between events and reducing generator run-times,” Kosik added.
He further mentioned that nuclear-powered small modular reactors (SMRs) hold strategic significance but are unlikely to see broad implementation before 2036.
Technical, Regulatory Barriers
Kosik warned that fully off-grid or hybrid data center power encounters physical challenges and stringent tariffs. While renewable energy and storage are promoted, designs of this nature may demand ten times more land than the facility itself.
“Transformers are the most common bottleneck,” he remarked.
Large MV/HV units entail similar multi-year lead times that impede utilities, implying that on-site solutions do not circumvent supply chain challenges.
Gas or fuel-cell hybrids introduce firm transport and backup fuel prerequisites; hydrogen introduces complexities in production, storage, leakage, and safety.
Concurrently, regulatory bodies are tightening regulations:FERC mandates that sizable co-located loads must be fully accounted for in planning and cover charges for transmission, regulation, and black start, curtailing the impact of “netting away” during the transition into the late 2020s.
Challenges and Opportunities
Amidst grappling with grid limitations, the data center industry faces both challenges and prospects with the adoption of on-site power solutions.
While technical and regulatory hurdles persist, the increasing embrace of innovative energy approaches indicates a pivotal moment for the sector. The focus now shifts to how swiftly operators can surmount obstacles to energize the AI-driven future.
