Working with our Vertiv Sales team enables complex designs to be configured to your unique needs. If you are an organization seeking technical guidance on a large project, Vertiv can provide the support you require.

Learn More

Many customers work with a Vertiv reseller partner to buy Vertiv products for their IT applications. Partners have extensive training and experience, and are uniquely positioned to specify, sell and support entire IT and infrastructure solutions with Vertiv products.

Find a Reseller

Already know what you need? Want the convenience of online purchase and shipping? Certain categories of Vertiv products can be purchased through an online reseller.

Find an Online Reseller

Need help choosing a product? Speak with a highly qualified Vertiv Specialist who will help guide you to the solution that is right for you.

Contact a Vertiv Specialist

Crazy Optimism, Skeptical Pessimism or Practical Realism? Digging into the Renewable Energy Projections in Data Center 2025

Some of those who read the report, Data Center 2025: Closer to the Edge, were struck by the fact that the 800-plus global data center professionals surveyed predicted that slightly more than one-fifth (21%) of the total power consumed by data centers in 2025 will come from wind and solar. They see little evidence the industry is well-positioned to achieve this projection.

Yet compared to responses to the same question in 2014, that projection seems timid. Then, solar power alone was projected to meet more than one-fifth (22%) of data center power requirements by 2025 with an additional 12% coming from wind.

Is this a case of the “Peak of Inflated Expectations” dropping into the “Trough of Disillusionment” as described by the Gartner Hype Cycle—with the potential to now enter the “Plateau of Productivity” before 2025? Or, will we continue to scale-back expectations as we move closer to 2025?

Based on the trends occurring today, I believe the former is more likely than the latter. Achieving the target of one in every five kW/hour of electricity consumed by data centers coming from solar and wind by 2025 is realistic and achievable.

What’s Holding Us Back

The data center’s need for always-on power and its relatively high-power requirements present challenges in the direct use of renewables. While solar technology has made significant strides in efficiency, and both solar and wind energy have become more cost-competitive compared to traditional energy sources, these technologies are still maturing and viewed as risky—and impractical—by many data center operators. Reducing the industry’s carbon footprint is a high priority, but it can’t come at the expense of reliable power availability.

The large majority of data centers will continue to rely on utility power and while the availability of renewable energy on the grid is growing, it seems unlikely that the industry can depend totally on the grid to reach the 20% mark by 2025. For reference, about 3% of the power generated globally in 2018 came from solar and only about 60% of that is utility-scale. Six percent of global power was generated by wind in 2018.

The future of renewables is further clouded by uncertainty in government incentives. The EU, for example, through its recast Renewable Energy Directive has committed to achieving 32% of renewable energy sources in gross energy consumption by 2030. On the other hand, the U.S. and China are ending subsidies put in place to spur wind energy development. Has the technology matured to the point that it can be cost-competitive with traditional energy sources without the benefit of subsidies? Grid-scale battery energy storage could play a significant role in renewables integration by helping to level the cost of energy.

How We Are Moving Forward

Leading data center developers have made strong commitments to powering their data centers with renewable energy and are pioneering approaches and leveraging their scale to forge a path that has the potential to raise the overall use of renewable energy by data centers globally.

Power purchase agreements (PPA) have emerged as a key vehicle for increasing a data center’s consumption of renewables. This can be considered indirect, rather than direct, consumption as it makes the renewable energy resources integrated into the grid accessible to data centers through the agreement. Today, PPAs often represent the best alternative for increasing renewable energy consumption and can serve to drive new development of grid-scale renewable energy sources, particularly when employed by large developers.

Unlike renewable energy credits (RECs), which represent the clean energy attributes of renewables but are not a direct energy purchase, PPAs allow operators, where possible, to purchase the dispatched clean electricity along with the bundled REC.

This is simplest to accomplish in competitive retail energy markets such as Europe (where we also have a high percentage of available renewable energy resources in many areas). It is more complex in areas where the retail market is regulated but is still possible through a fixed-floating swap agreement, as described in the Google white paper, “Achieving Our 100% Renewable Energy Purchasing Goal and Going Beyond.”

PPAs and RECs are being used today by a number of major developers, including Google, Equinix, and Digital Realty, to accelerate the timeline for achieving ambitious clean energy goals as other strategies are pursued. However, they are more than a short-term strategy. They will become less necessary as the percentage of renewables on the grid increases, but for organizations that make the commitment to 100% renewable power, they will continue to be used in the long-term to compensate for the inevitable gaps in the availability of sufficient renewable resources.

With these large players accounting for an increasing percentage of total data center capacity, and thus data center power, their commitment to renewable energy and the use of PPAs will drive up the overall percent of data center power from renewables while also incentivizing utilities to add more renewable power to the grid.

Microgrids can also play a role in directly supplementing the renewable energy available on the grid. These grid-connected on-site energy generation or storage plants are being promoted to enable data centers to gain greater control of energy costs by reducing peak demand. Solar panels are ideally suited to support microgrids, providing operators both lower-cost power and the ability to directly support some percent of their data center power requirements through renewables.

Are PPAs and microgrids enough to achieve the projection of Data Center 2025 participants? They may very well be—if data center operators remain committed to clean energy and work with their utility partners to drive increased development of utility-scale renewable energy projects. Yes, the industry is a significant consumer of electricity, but it has also become a force for change in this area.

To learn more about trends in data center power, register for our webcast, Data Center 2025 - Distributed Edge Meets a Distributed Grid.


Feel free to subscribe to our blog to stay informed on the latest trends, technologies and news.

Related Articles

Partner Login

Language & Location