A new research paper from technology group Wärtsilä and AVK, an energy solutions business, has found that a combination of renewables, grid balancing engines, and energy storage creates the most cost-effective microgrids to power data centres while cutting emissions, supplying vital grid balancing to enable the energy transition
The paper, Data centre dispatchable capacity: a major opportunity for Europe's energy transition, presents a new analysis on how data centre microgrids can reduce grid infrastructure spending, emissions, and wasted energy, while also offering a balanced path for the energy transition.
The analysis discovered that powering the data centres across Europe by optimised microgrids could support the entire continent's energy transition by creating a bank of dispatchable power.
The rapid growth of AI is the main driver for demand for data centres across Europe, and is expected to rise by 250% by 2030, going from 10GW to 35GW.
Data centre operators are turning to off-grid solutions more often to power these energy-intensive assets when the continent's grid faces constraints due to high energy prices and bloated grid connection queues.
Anders Lindberg, president of Wärtsilä Energy and executive vice president of Wärtsilä, said, “The growth of AI over recent years has been extraordinary, and as it continues to transform the way we live and work, it drives a need for more energy. This is causing significant challenges for grid operators across Europe, who are struggling with rising costs and up to a 10-year waiting time for a grid connection."
“By investing in microgrids, data centres can sidestep energy constraints, and with the right technology mix of renewables, grid balancing engines and energy storage, can ensure their emissions profiles and costs do not outweigh the huge benefits that AI brings."
AVK CEO, Ben Pritchard, said, “The answer to the challenges we face in combating climate change is as much to do with changing behaviours as developing new technologies. And the key to behavioural change is the recognition that there are different ways of doing things. The solutions outlined in this paper are not impractical; they are based on real-world cases and calculations. All that’s needed to make them more widespread is for investors, operators, equipment suppliers, planners, and policy makers to recognise the widespread benefits that sharing dispatchable data centre capacity with the grid can bring and pass that knowledge on.”
On top of the benefits microgrids create, engine power plants bring cost efficiencies to data centre power generation.
Modelling an 80MW data centre, a combination of engine power plants, renewables, and energy storage produces the lowest levelised cost of electricity at €108/MWh, compared against three other real-world scenarios.
It also offers a low emissions scenario in comparison to the other modelled scenarios, and particularly in contrast to gas turbines, emissions produced by engine power plants can also be reduced as sustainable fuels become commercially available.
Lindberg said, “Through investing in flexibility, microgrids can have the lowest possible cost, while cutting emissions dramatically compared to other pathways, including turbines. This flexibility can have a significant, positive impact on the continent’s digital and energy transition.”
Current trajectories predict that by 2027, 40% of existing AI data centres will be operationally constrained by power availability. Microgrids are capable of relieving the grid in the short term, and when grid connection is achieved, the excess energy generated can be sold.
