It’s no surprise that data centers require large amounts of electricity. These “energy vampires” represent one of the major challenges facing the countries that are going to host them In Spain, the government has tried to address this challenge by tying the expansion of data centers to renewable generation, so that they don’t impose too high a toll that forces the power system to produce more fossil fuels or put pressure on prices.
However, and although a new, much softer draft has recently been presented, this new text continues to emphasize the same underlying ideas about the need for renewables. And according to a report by consulting firm EY, if the procedures proposed by the decree are met, it would require the deployment of about 50 additional gigawatts of solar and wind power and batteries to supply just 3.5 gigawatts of data centers.
Data centers operate around the clock, not renewables. Both the draft presented in August and the review conducted today assume that data centers will have to live with new renewable generation. A target of covering at least 80% of electricity supply with solar or wind energy (renewable excess) is maintained and 80% of consumption is supported hourly (hourly relation). That is, it is not enough to produce large amounts of renewable energy throughout the year: we need to have enough production to cover costs in difficult times.
But what if there is no renewable generation? Renewables have one basic characteristic associated with them and that is that they are non-intermittent. The same power is not produced at 3 o’clock on a sunny summer day, when there are plenty of solar resources, as on a windless night, when there are no solar or wind resources. To cover those hours when there is not enough renewable generation, the centers will be able to switch to a combination of additional generation and storage.
Huge figures for expected demand. The problem arises when we try to match both curves: the constant demand of a data center and the variable production of renewables. EY’s analysis concluded that, according to its estimates, the generation and storage portfolio would need to increase substantially to guarantee this coverage. Along these lines, a portfolio of 49.8 GW of solar, wind and storage will be needed, according to its simulation estimates, to meet the energy requirements of the Royal Decree project of 3.5 GW of data center demand for 2030. Of this figure, 26.8 GW corresponds to solar photovoltaics, 8.8 GW to wind and 14.2 GW to battery storage. That figure is huge compared to the demand it is intended to cover.
Thus, and according to the study, the electrical power of the data center contained will be multiplied by 14 as a result of the EY simulation. Simply put, in the scenario analyzed by EY, for every gigawatt of data center demand, around 14.2 gigawatts of solar, wind and battery power would need to be deployed to meet the recommended conditions.
The study points to that on the other hand. The EY analysis also warns that this large-scale deployment of renewable generation to guarantee all-time supply could have some unintended consequences. For example, the EY model calculates 19,742 GWh of annual surplus and assumes that system discharge will increase by at least 16%. According to the consultancy, this could reduce the profitability of already existing renewable installations.
Another outcome that the consulting firm predicts in the scenario analyzed and reported by El Periodico de la Energia is that data center supply costs could reach 133.07 euros/MWh compared to 55 euros/MWh in the futures market that year. That is, 2.4 times higher costs that may affect digital services provided by data centers and make them less competitive. So much so that the sector, despite recent amendments to the common law, is still considering appealing the scheme through legal means.
Picture | Brett Sayles
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