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Data Center and Utility Matchmaking for a Lower Total Cost of Ownership

It’s an indisputable fact: Electric utilities need customers. Electricity sales in the U.S. have fallen five out of the past eight years, primarily due to improvements in energy efficiency. Here’s another essential certainty: Data centers are excellent consumers of electricity, accounting for about 2 percent of total U.S. energy consumption since 2010.

The mutually beneficial possibilities between utilities and data center clients seem obvious. So why aren’t these industries taking advantage of the potential win-win? And who can help bridge the gap?

Bringing Industries Together

Historically, these two groups haven’t forged a stronger connection, for several reasons. As a heavily regulated industry, utilities must operate at a different pace than the breakneck speed of the data center world. Data center clients are commonly told to distrust the reliability of the electric grid, even in areas where statistics disprove the case. And then there’s this unfortunate truth: Companies involved in the development of infrastructure to support both industries profit from redundancy.

But now we’re seeing the big-picture opportunity to revolutionize how data centers and utilities interact. (A client-first culture is our thing at Burns & McDonnell, so this approach is squarely in our wheelhouse.) We’re feeling an increased responsibility to bring these two groups together.

Matchmaking for Mutual Benefit

It’s telling that the size of data centers is measured in megawatts. Not only are data center clients looking for this electricity from the grid, they’re also building their own generation options as a backup.

This means a lot of money is thrown at power generation, and a fair amount remains unused much of the time. How can utilities and data center clients work together to reduce this redundancy and save money, driving down total cost of ownership (TCO) on both sides?

It’s not a simple task, yet the massive potential is worth the effort. With experience in power and data centers, we can serve as matchmaker to help clients on both sides of the equation realize the benefits.

  • Linked needs and goals — regarding renewables, battery storage and intermittent loads, for example — means matchmaking can prevent double building and encourage shared costs.
  • Where the grid is proven to be reliable enough to meet the need, data centers can minimize TCO by reducing the cost to build and maintain back-up generation.
  • Where back-up generators are necessary in data centers, utilities can capitalize on this additional generation for demand response, reducing costs on both sides.
  • Locating a data center near a power generation facility — existing or planned — may mean lower development and operational costs. Bringing a data center closer to the synchronous machine means an improvement in the quality of power.

There are challenges to overcome and the conversation is just beginning. But data centers and utilities are both looking to drive efficiencies — and so are we. How can we all travel down this path together to reduce TCO on all sides? Are you interested in being a trailblazer?

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Michael Bell
Written by Michael Bell

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