Solving the Data Center Power Dilemma

Artificial intelligence (AI) is fundamentally re-shaping the world we live in – driving innovation and automation on an unprecedented scale. But behind the technology and its advanced capabilities is a somewhat inconvenient truth: AI infrastructure requires an immense amount of power, and right now, there simply is not enough of it to go around.  

This is occurring at a time when worldwide electricity usage is already steadily growing from trends like increased electrification, manufacturing onshoring, etc. Efforts to decarbonize and increase the resiliency of the electrical grid are also accelerating. All these factors are complicating the task of bringing new AI data centers online.

Meeting the industry’s demand for highly reliable and low-carbon power over the coming years will be a massive undertaking. It will require a mix of energy technologies, including natural gas, renewables, battery energy storage, hydrogen, heat recovery systems, carbon capture, traditional nuclear and small modular reactors (SMRs), and even geothermal. 

Among all “behind the meter” (i.e., non-grid electricity) solutions, gas turbines currently represent the most practical option for procuring efficient and reliable power within a reasonable timeframe. By utilizing hydrogen and/or carbon capture, the CO2 footprint of gas turbine-based plants can be greatly reduced, enabling data center owners to future-proof their facilities and meet strict targets for emissions and uptime. 

AI Data Center Power Demand

Grid Pressure and Forecasted Growth

Generative AI is still in the (relatively) early stages of scaling. As a result, it is difficult to predict with certainty what the future of the industry will look like. This is reflected in the wide range of electricity demand forecasts that have been published over the past two years. The trend, however, is clear: data center power demand is surging, and it is putting immense pressure on the grid which was already under a degree of strain.  

Utilities in areas where data center development is concentrated (e.g., Northern Virgina, Texas, parts of California, etc.) are revising power demand forecasts, in some cases significantly. 

The U.S. Department of Energy (DOE) projects that in the U.S. alone, data center power demand could reach anywhere from 325 – 580 terawatt hours (TWh) by 2028, which is roughly 2-3 times what it was in 2023. Moreover, Gartner forecasts that by 2027, 40% of AI data centers will be operationally constrained by electricity deficits.

The massive growth in power demand poses a serious challenge for data center developers and utilities. It has also become an issue for countries that have made long-term climate-related commitments. 

In 2022, data centers and data transmission networks were responsible for roughly 1% of all energy-related greenhouse gas (GHG) emissions. This underscores the need for power solutions that are not only reliable, but also sustainable.  

Bringing Power "Behind the Meter”

A direct connection to the public grid has been the preferred strategy for powering data centers, particularly in the case of hyperscalers and co-locators. However, most of the prime locations where infrastructure exists to support a reliable grid connection have already been secured. In locations where AI data centers are being planned which will require new substations with step-down transformers, it is not uncommon to see connections being pushed out 5-8 years.  

This timeline is not acceptable for many technology companies who require data center capacity now to support their rapidly expanding AI workloads. As a result, “behind the meter” approaches where dedicated power sources are brought onsite have garnered a great deal of interest. 

Power demands for modern hyperscale data centers typically range from as low as 50 -100 megawatts (MW) to several gigawatts (GW).  Outside of gas turbines, there are few options that can provide this level of power in a compact footprint and reasonable time frame. 

Mitsubishi Power is currently working with several data center developers to evaluate the use of both industrial and aeroderivative gas turbines for onsite power. 

FT8 MOBILEPAC Aeroderivative Gas Turbine: A Bridging Solution

Aeroderivative models, like the FT8® MOBILEPAC® (with 31 MW output), are mainly being explored as a means of bringing power to sites that need it rapidly. They are ideal as a temporary bridging solution and allow the data center to begin operation while it waits for connection to the grid. 

The turbine(s) can be packaged on standard trailers and are easily transported between sites, as needed. They require very little advanced site preparation. The package design eliminates the need for concrete foundations, reducing the cost and time required to complete installation. 

The FT8 unit has an extensive track record in industrial applications and can be started up just days after arriving onsite.

Industrial Gas Turbines: H-25 Series 

Industrial gas turbine frames, such as the H-25 Series, are well suited as a more permanent data center power solution. 

The H-25 in simple cycle configuration has an output of 41 MW and a combined cycle output of ~60 MW for a 1 on 1 configuration (around 120 MW for a 2 on 1 configuration). When applying cogeneration, the turbine can supply up to 70 metric tons of steam per hour. Cogeneration configurations are especially attractive when coupled with absorption chillers, as they can provide what is essentially emissions-free cooling capacity to server racks. 

One concept that has gained traction among data center developers is to use industrial gas turbine packages for primary power until a grid connection becomes available. After connection, the turbines can serve as the facility’s main source of back-up power, protecting the initial CAPEX investment. 

In certain cases, it may be possible to create an additional revenue stream by utilizing gas turbines (potentially in combination with battery energy storage) to support the grid with ancillary services (i.e., injecting or absorbing power as needed to ensure grid stability). Grid support capabilities will become more relevant as the share of intermittent renewables within the energy mix increases in the coming years. 

Leveraging Hydrogen and Carbon Capture to Decarbonize Power

Overall, gas turbines represent a clean, flexible, and efficient power solution for data centers. For context, a modern combined cycle package is roughly 20% less carbon intensive than today’s average grid power. Notwithstanding, the pressure on data centers and their owners to decarbonize will only increase in the coming years. This will likely necessitate looking at technologies like hydrogen co-firing and carbon capture to further reduce emissions. 

Mitsubishi Power has established itself as a leader in hydrogen co-firing technology over the last decade. Currently, all Mitsubishi Power advanced class gas turbines are capable of firing hydrogen blends up to 30%. Plans are in place to achieve 100% by 2030, creating a pathway to carbon-free power generation. 

An alternative zero-emissions solution is to utilize carbon capture on the back of a natural gas combined cycle plant. Together, Mitsubishi Power and Mitsubishi Heavy Industries America (MHIA) are uniquely positioned to deliver these systems by providing both the gas turbine package and the CO2 capture solution.

Multiple variables will influence the viability of installing a carbon capture system. Most importantly, it requires a suitable site for sequestration or a large-scale offtaker. 

Both hydrogen co-firing and carbon capture enable data centers to future-proof their power systems, making it possible to hit strict emissions targets and eventually achieve net-zero. 

Taking a Systematic Approach to Data Center Power

In the end, every data center project is unique. Technologies that are well suited for one data center may not be feasible for another. As a result, developers need to adopt a systematic approach when it comes to power. 

Power purchase agreements (PPAs) that include 100% renewables in combination with battery energy storage may be viable for certain projects – for example, in Texas, where there is a high concentration of wind generation. However, at a much lower cost, it could be possible to achieve very low carbon intensity power generation with a hybrid concept that uses a combined cycle, batteries, and some input from renewables. 

Techno-economic analysis of different solutions needs to occur early in the project development cycle. By engaging with gas turbine OEMs like Mitsubishi Power as a strategic partner (as opposed to simply an equipment vendor), data centers can arrive at a future-proof design that avoids obsolescence, while striking an optimal balance between reliability, sustainability, and cost.

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