Within the energy industry, concerns are being raised regarding the demand load required by data centres and the stress it places on power systems nationally.

The industry’s concerns

In Ireland, reported by Cornwall Insight Ireland, the power needs of data centres are having a significant impact on the country’s electricity system.

EirGrid recently wrote to the country’s Commission for Regulation of Utilities (CRU) to explain its concerns. The CRU’s response stated that data centres “now need to be flexible and demonstrate this by providing solutions to enable further grid integration.”

The CRU’s preferred solution is currently under consultation. It would require data centres to apply for future connections. These would consider location, on-site generation and storage, and the ability to provide flexibility in demand by reducing consumption when requested.

Our view

Embedding the use of generation and storage as part of daily operations may help to deliver more flexibility with net demand, providing it does not affect the integrity of the data centre and service to tenants. This could help allay the regulator’s concerns. With enough participation, it may even remove some volatility from wholesale markets.

The future outlook

One of the big questions is will similar proposals emerge across the UK and Europe?

Our message is be prepared. Flexibility will be key and such proposals could even present an opportunity. When embedding more flexible uses of generation and storage into operations, if data centres also apply a more dynamic approach to energy purchasing, a lower commodity cost can be delivered by maximising market volatility and limiting the risk of buying when prices are high.

As we’ve been reporting in The Navigator and recent energy pricing blogs, today’s wholesale energy prices are very high, which likely means current high costs for data centres too.

So, maybe now is the time for data centres to review how they work and implement more all-round flexibility. Not only could this appease the regulators, but also deliver cost savings.

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