How energy and chemical companies, electric utilities and data center providers can partner for a sustainable future

Author: Schneider Electric

This audio was created using Microsoft Azure Speech Services

On the surface, the data center and the energies and chemicals industry could not be more different. Data centers require a very clean and controlled white space environment, while oil and gas companies operate in the harshest outdoor environments.

Yet, these industries find themselves facing similar pain points. Both are under pressure to decarbonize, as private capital and government grants for data center and oil and gas projects are increasingly tied to sustainability initiatives. Investors and governments are asking for clear and transparent net zero goals before committing to projects. 

This sustainability push comes at a time when data centers have an insatiable hunger for power, largely fueled by the commercialization of generative AI applications. At the same time, companies in the energies and chemicals end market need more data centers to optimize their operations and process massive volumes of data generated by equipment and operations. Data centers also enable these companies to become more sustainable by optimizing energy efficiency, implementing decarbonization technologies, and facilitating data-driven decisions. This approach helps reduce overall environmental impact and resource consumption during operations.

In addition to the common pressure to decarbonize, energy and chemical companies require fast deployment of computing power, often near their production sites. They have the same reliability, connectivity, and uptime requirements as cloud and service providers. Traditionally, this would mean building a new data center, which takes anywhere between 18 to 24 months, with the added complexity of design and engineering. An alternative that is becoming very popular is prefabricated modular data centers, which can be deployed at the edge as a turnkey solution. Deployment takes 6 months instead of 24 months, and construction occurs in a factory environment, ensuring quality and reliability. This also makes it easier to comply with environmental requirements and reduces engineering time needed for a new data center, thereby allowing fast project turnarounds.

Data centers and electric utilities, friends or foes?

Electric utilities and cloud and service providers are both fighting for ‘power.’ Although data centers are getting more efficient, the AI boom might increase the energy consumption of data centers threefold, something that will surely require electric utilities to invest in more generation, transmission, and distribution.

On the other hand, electrification of transportation and industrial growth puts pressure on utilities, which are turning to renewables and new energies, such as green hydrogen production, to quench this thirst for green energy. Traditional oil and gas players are investing today in grid-scale renewable projects and diversifying their portfolio with hydrogen production, which makes them perfect partners, potentially competitors, to electric utilities. 

Although data center operators are very demanding, requiring information on power quality factors, outage frequencies, and causes and remedies to avoid future events, utilities typically welcome data center projects because the required high electric load allows them to maximize their assets. However, some power generation companies are not able to provide the power needed for new data center builds, putting data center projects on hold, or pushing them away to neighboring states or countries.  Utilities might prefer customers that can adjust their power usage, like small to medium-sized ones, over big cloud and service providers that don’t participate in the demand management model. Serving bigger customers might force utilities to invest in fossil fuels, harming their net zero goals.

The path to resiliency, efficiency, and sustainability

Utilities, data centers owners, and energy and chemical companies rely heavily on each other, but because of the demands placed on them, they can create major challenges for each other. Utilities and energy and chemical companies need more data centers to further digitize their operations, while data center operators need clean energy coming from the partnership between energy and chemical companies and electric utilities to sustain their power-hungry operations. 

A mediator who understands common challenges between these enablers of modern society and provides solutions to both the supply and demand for power is needed. This partner can act on both the generation and consumption side, enabling green energy production and ensuring more reliable and efficient transmission while providing hardware, software, and services for saving energy on the demand side.

A company that believes ‘Life Is On’ might be that perfect partner.

Tags: #sustainability, artificial intelligence, electric utilties, energy and chemical, modular data center