While facilities such as military bases, hospitals, and universities are exploring the concept of an advanced microgrid, data centers have been slow to warm up to the concept. Navigant Research expects this hesitation is about to change as the commodity costs of hardware assets drop and the capabilities of automation and software controls scale up.
Data centers already view themselves as protecting mission-critical functions. Yet, they often rely on an inefficient redundancy of assets that carry a large carbon footprint. Advanced microgrids that leverage the latest IT innovations to create networks can be more efficient than the status quo approach to uptime. Further, advanced data center microgrids can capture new revenue streams, transforming energy from a cost to profit. They can also increase resilience and sustainability by leveraging cleaner onsite assets through smart and cleaner power infrastructure. Recent digital grid trends make an advanced data center microgrid possible, blending a combination of onsite, cleaner hardware assets with remote cloud applications to create new forms of distributed resilience.
This Navigant Research white paper, which was commissioned by Schneider Electric, explores the role data centers will play in the future growth of commercial and industrial (C&I) microgrids in North America and the rest of the world. According to recent data provided by IDC, there is a shift away from direct data center ownership to reliance upon service provider data centers. Likewise, there is a shift within the broader microgrid market from direct ownership of assets to outsourcing, as exemplified by Schneider Electric’s microgrids as a service business model.
Key Questions Addressed:
- Why are many of today’s data centers considered microgrids?
- Why are many data centers not considered advanced microgrids?
- How big is the potential data center market for advanced microgrids?
- Why will data centers help drive the commercial and industrial (C&I) microgrid market?
- How does the microgrids as a service approach address barriers to deployments of C&I microgrids?
- Why are microgrids that incorporate cleaner assets and lower cost batteries a better solution to resilience than traditional uninterruptible power supply (UPS) systems?
Who needs this report?
- Data center owners and operators
- Colocation data center providers
- Small and midsize data center tenants
- Microgrid market participants
- Battery storage vendors
- Smart grid software providers
- Investor community
Table of Contents
1. Introduction: Setting the Stage
1.1 The Impact of the New Digital Economy on Data Centers
1.1.1 Data Centers Are Emerging as a Target for New Energy Innovations
1.1.2 Data Center Growth Trends
2. Data Centers and Microgrids: Finding Common Ground
2.1 Mutual Goals of Data Centers and Microgrids
2.1.1 Identification of Mission Critical Loads
2.1.2 Focus on Uptime
2.1.3 Leveraging Existing Utility Grid Infrastructure
2.2 How Advanced Microgrids Differ from Traditional Data Centers
2.2.1 Resilience Focused on Intelligent Networking of Cleaner Onsite Assets
2.2.2 Utility Relationship Evolves to Bidirectional Value Exchanges
2.2.3 Smart Controls Optimize Diversity of DER
2.3 Data Centers Drive Commercial and Industrial Microgrid Growth
3. Data Center Segments and Size Dynamics
3.1 Data Center Market Segment Impacts and New Notions on Distributed Resiliency
3.1.1 Centralized Data Center
3.1.2 Regional Data Centers
3.1.3 Localized or Edge Data Centers
3.2 The Hybridization of Data Centers
3.2.1 Case Study: Next Generation Distributed Resiliency
4. Why Microgrid as A Service?
4.1 Key Challenges to Moving Forward with a Microgrid
4.1.1 Parallel Paths for Data Center and Military Bases
4.1.2 Understanding the True TCO
4.1.3 Lack of Experience with Variable Renewable Resource Integration
4.1.4 Knowledge of New Advanced Batteries is Limited
4.2 New Microgrid Business Models Emerging
4.2.1 Moving Closer to Plug-and-Play
4.2.2 How Microgrid as a Service Works
126.96.36.199 What if the Microgrid Vendor Defaults on Obligations?
188.8.131.52 Selection of an Experienced and Financially Sound Partner Is Key
5. Five Key Takeaways for Data Centers
5.1 Why Microgrids are Better than Traditional Approaches for Meeting Uptime Goals
5.1.1 How New Generation Assets Make Microgrids Attractive
5.1.2 How New Opportunities for Demand Management Translate into Revenue
5.1.3 How Digital Grid Trends Point to Microgrids as a Data Center Solution
5.1.4 The Critical Role of Data Management Tools
5.1.5 MaaS Shifts Risk to the Experts
6. Acronym and Abbreviation List
7. Table of Contents
8. Table of Charts and Figures
9. Scope of Study, Sources and Methodology, Notes
List of Charts and Figures
- Cumulative Data Center Capacity, World Markets: 2013-2021
- Grid-Tied C&I Microgrids by Region, World Markets: 2017-2026
- C&I Energy Storage CAPEX Assumptions by Technology, Average Installed Costs, World Markets: 2017-2026
- Types of Distributed Data Center Architectures
- Annual Net Cost of Protection ($/kW of Critical Load)
- Microgrid as a Service
- Advanced Microgrids Advantages