Microgrids developers are bullish about their ability to meet the power needs of data centers as load demands for these types of projects continue to build, according to industry experts.

Executives at microgrid developers AlphaStruxure and Enchanted Rock spoke to NPM in separate interviews to discuss their thoughts on the growing data center sector. Specifically, officials from the two companies emphasized that natural gas microgrids, potentially paired with solar grids and other energy resources, could be an immediate answer to data center power needs.

“This is an ‘and’ strategy in the power sector: it is about transmission and transmission distribution upgrading, its utility scale base load generation additions, both in gas and renewables, and it is-behind-the-meter,” AlphaStruxure CEO Juan Macias told NPM. “In order to meet this load growth, to have resilience and power quality, it is an ‘and, and, and’ type of scenario.”

Energy consulting firm Accenture recently published its “Powering the Future of U.S. Data Centers” report that shows that data centers could take up almost one-fifth of US utility-scale electricity by 2033, up from the current rate of 5%. Per the report, advanced AI-computing could drive 70% of that data center energy demand growth.

Accenture’s report concluded that natural gas can help with growing energy needs, especially in the near-term while the grid waits for more renewable energy projects to come online. Specifically, the report mentioned natural gas-powered microgrids co-located with data centers “could alter the landscape completely for power hungry data centers.”

“Natural gas can provide consistent, low-carbon power. It complements the intermittency of renewables like solar and wind, making it a transitional option while renewable energy sources and energy storage technologies are scaled up,” added the report.

Enchanted Rock Chief Commercial Officer Allan Schurr said his company’s natural gas microgrid services can scale from 1 MW into hundreds of megawatts, depending on the power need of the site. IN

Several years ago, the largest data centers in the US were all less than 750 MW, with most under the 100 MW threshold. Now, many projects in the pipeline across the US exceed 1 GW.

“The grid used to be able to accept the data centers when they were 50 MW a-piece with some advanced planning, but by and large, they got power where they wanted it,” Schurr told NPM. “Now we are ten times that or bigger, and the grid cannot accept those kinds of loads so easily. There is, in many cases, long delays to get interconnected to the grid for firm power of the 500 MW or even less – they run into obstacles because the grid can deliver firm service under all conditions to that scale of load without large investments in transmission infrastructure upstream of the data center site, and investments in generating assets in the region so that they can supply power during all conditions.”

Enchanted Rock’s combined backup power and grid service microgrids can give reliable energy generation to data centers that may have long interconnection delays, Schurr explained.

“Microgrids, I think, are the responsible way for these data centers to connect to the grid. It is better for their own business because they can get operating faster, but it is also better for the grid to have these very large loads be flexible,” Schurr said.

Macias said his company has similar positive sentiments about how microgrids can provide reliable power to energy-needy data centers. AlphaStruxure, a joint venture between the Carlyle Group and Schneider Electric, thought about getting involved in data centers when it was founded nearly six years ago. After chatting with industry peers, Macias said AlphaStruxure decided they had “negative value to add” to data center projects at the time.

Fast forward to early 2024, Macias said they began more discussions about how their services could help data centers deal with growing power needs during a time where energy projects cannot get connected to the grid at a fast enough rate to meet demand.

“We have load growth in this country that we haven’t seen in decades, coupled with the challenges around capacity,” Macias said. “Data centers themselves are getting, are getting bigger very quickly, driven by large language models primarily and then forthcoming Gen AI and all the inferencing that will be closer to the load … “they’re getting bigger, and there’s more of them.”

AlphaStruxure has been developing several reference designs for behind-the-meter natural gas microgrid power systems, including a 20-to-50 MW microgrid that can be powered by fuel cells, or engines.

Another reference design can be deployed in 100 MW blocks and can be replicated up to a 1 GW campus. That reference can use air-cooled or water-cooled turbines or medium-speed engines, Macias said.

After talking with peers and potential clients, Macias said AlphaStruxure has identified several use-cases for their microgrids to power data centers.

The first is a remote data center completely off the grid that needs an islanded power generation system.

Another potential use is for a microgrid to provide supplemental power. For example, if a data center is connected to the grid, getting 300 MW from a utility, but still needs another 200 MW to operate fully, AlphaStruxure could come in with a microgrid making up the difference.

The third use is AlphaStruxure providing “bridge power” to a data center that has a commitment from the utility to bring it power gradually over several years, but the data center needs energy in the meantime.

2025 outlook

AlphaStruxure is working with several companies on advanced plans for co-located microgrids and data centers, Macias said, and are “working hard to close our first projects” in the sector over the next several months.

And solar is not being left out of the equation. Macias said AlphaStruxure has also been in talks with utility-scale solar companies in respective interconnection queues that have strategic land and either have begun construction or have permits to do so.

“What they’re looking to do is have a powered land offering, and we go in and we complement their capacity with more capacity, and then you’ll have a solar and gas installation to power a campus and co-locate a data center next to that solar field,” Macias said.

Schurr said Enchanted Rock is in talks with data center developers about how they can help them with energy while awaiting interconnection. He said his company also works with developers to identify sites to put their data center projects that already have existing natural gas infrastructure.

Energy Impact Partners made a USD 10m investment in Enchanted Rock in 2017. It is still listed as a portfolio company on EIP’s website.

*This story was originally published exclusively for NPM US subscribers.

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