How the power of data centres can increase energy security
It is fair to say that when it comes to the energy market, all businesses have been impacted by one of the most volatile periods in recent years. For energy-intensive sectors such as data centres, this is even more heightened.
While policymakers have now put short-term plans in place to offer some relief from rising energy prices, including the Energy Bill Relief Scheme (EBRS), which runs until 1 April 2023, a longer-term and more sustainable approach is needed to help businesses reduce energy demand and limit their exposure to the global markets.
Huge strides have been made in recent years to lower the carbon impact of data centres, with energy efficiency playing a key role in reducing energy demand. However, with wholesale energy costs likely to remain uncertain, what else can data centre operators do to take control of their energy consumption and keep their net zero ambitions on track?
One option many are turning to is sustainable on-site generation.
In our recent Business Energy Tracker report, we asked 200 large businesses about the steps they were taking to manage their energy risk. Energy efficiency was highlighted as the top tactic, where more than half (58%) said they were increasing energy efficiency. This rose significantly to 84% among those in energy-intensive sectors like data centres that spend more than £2 million per year on energy.
When it comes to considering sustainable on-site generation, more than a quarter (27%) of respondents said they are planning to invest in this measure to combat energy risk.
It’s easy to see why. Not only does it provide businesses with a route to lower energy costs, increased self-sufficiency and reduced dependency on the grid, but it also plays a significant role in reducing emissions. In addition, it is now increasingly suitable for mission-critical industries like data centres, that can’t afford a loss of power.
Could data centres become power generators?
We believe that the power potential of large businesses such as data centres could go even further. Investing in on-site generation could also enable them to play a crucial role in decarbonising the UK’s energy system, by reducing our dependence on imported natural gas, resulting in lower costs and greater energy security.
This is something our latest report, The Future of Energy: The critical role of business in a zero-carbon world, investigated.
The report uses new modelling to assess whether on-site generation technologies, including wind, solar photovoltaic (PV), battery storage, biogas and biomethane, could feasibly replace the electricity generated from imported natural gas by 2035. It was based on the projection from the Climate Change Committee’s Sixth Carbon Budget that, by that date, the UK would require 16 TWh of power from imported natural gas.
The scenarios explored in the report show that by 2035:
- On-site wind capacity within commercial and industrial facilities could reach between 6 and 29 GW
- Installed roof-top solar PV could account for 6.5 GW
- Biogas power generation could be up to 16 TWh
- Hydrogen and biomethane injection could be close to 33 and 7.5 TWh, respectively
In addition, the report predicted that having more business-generated power will lower energy costs, with the overall levelled cost of electricity for the proposed options ranging between £49 and £261/MWh, lower than the wholesale prices we’ve seen recently. Crucially, it will also support the net-zero ambition, with emissions savings of up to 6.7 MtCO2/year.
Planning for a net zero future
So, how can data centre operators take action now towards net zero and a more resilient energy future?
1 Understand your current sustainability status
To help assess the most suitable path to net zero for your facility, it is important to have insight into how you are currently using energy and what impact your efficiency and sustainability projects are already having. That way, you can understand the best measures for the future, so you can plan an effective and sustainable energy strategy. Tools such as our new Net Zero Calculator, an easy-to-use interactive resource, can help your organisation develop a holistic net zero programme that delivers real and lasting benefits.
2 Build the case
During the current environment, building the commercial case for any kind of net zero investment such as on-site generation can be challenging. Therefore it is important to clearly demonstrate the benefits it will bring, for example:
- Reduction in carbon emissions: On-site generation technologies that use 100% renewable sources, such as solar PV or wind, will help a business significantly reduce its carbon footprint.
- Lower energy costs: Installing on-site generation technology can make a real impact on the bottom line through a reduction in energy costs, as a site will only generate the energy the business needs to use, naturally operating in a more efficient way.
- Greater control and increased uptime: Having an on-site supply helps to protect businesses against wholesale price volatility, and potential power disruption, meaning you can plan ahead with greater certainty.
- Improved reputation: Installing on-site generation is a clear signal that your business is serious about sustainability, particularly in the eyes of customers and throughout your supply chain.
3 Take action
Working with an energy partner can help you assess the best options for your business, from making the move to renewable supply to exploring the benefits of other measures, including sustainable on-site generation, battery storage and electric fleets.
Keeping sustainability on track
What the Future of Energy report shows is that businesses, including data centres, really do have the power to shape our energy future, helping to reduce costs and carbon emissions. However, achieving this requires policy and incentives to support it, such as tax deductions for equipment purchases, which could further encourage businesses’ involvement in energy production.
So, with energy set to remain a major focus into 2023, it’s important that it acts as a catalyst for greater net zero action, rather than stalling sustainability progress.
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