Transcript

Introduction

Hello, everyone, and welcome to today’s webinar. Today we’re gonna be talking about data centers. Joe Fackler is here with me and has written an interesting paper- part three of his Data Center Power Consumption series, on something more specific with legislation with data centers. I’ll hand it over to Joe.

The JLARC Report on Data Centers in Virginia

Thanks, Chris. When writing the last white paper, I came across a report written for the Virginia legislature by the Joint Legislative Audit and Review Commission, which I’ll be calling JLARC through the rest of this webinar. They wrote a long paper, 156 pages, and I’ve broken down a few of the utility-specific sections for you. We’ve linked that full report down at the bottom of the white paper, if you want to read it; it’s a public report from the state legislature.

While the report that was written for the Virginia legislature is wide-ranging in scope, we tried to narrow down some of the more utility-focused aspects. They went into things like zoning issues against residential neighborhoods, which is not typically under the purview of the utility. They’re not typically worried about that. Also water consumption and other things that don’t pertain terribly well to the electrical utility.

Why This Matters Beyond Virginia

Now, you may be thinking, hey, I don’t live in Virginia, why am I worried about this? Virginia is the largest data center market in the United States. Northern Virginia has a tremendous number of data centers, and more going in all the time. If some of the recommendations that the commission makes go into effect, you could see similar things being replicated across other states, especially those with large data center projects. So it’s relevant even if you’re not from Virginia. If you are from Virginia, heads up.

Data Center Growth Forecasts

We went into a little bit of background about the tremendous number of data centers going in. We’ve also covered that in a couple of our other white papers. The commission focused on sort of two different scenarios. One was a general trend saying, hey, data center growth continues as it has for the next decade, and another forecast saying, okay, what if it continued to escalate the way it’s been escalating over the past decade?

Under these forecasts, we’re already looking at data centers consuming a quarter of all of Virginia’s electricity supply, and they’re saying, hey, look, this could triple over the next 15 years. Data centers are responsible for almost all of that growth now in the next 10 years, potential doubling. There’s one data center campus that’s expected to draw more than Virginia’s largest reactor can even generate. Even if you were to dedicate all the power from our big nuke plant down at Lake Anna, this data center would still need a tremendous additional amount of energy.

PJM Interconnection and Capacity Challenges

When it’s talking about the PJM interconnection, the interconnection queue is getting backed up pretty quickly as these data centers go in. We’ve covered in other papers how quickly a data center can go in. Some of them go from breaking ground to up and running in 18 months, whereas typically you can’t build transmission or distribution that quickly.

The report went on to talk about driving up price at the capacity auctions, and consideration from PJM considering mandating interruptible service for large new loads. Where during an emergency or a grid challenge, a large load such as a data center could be required to have their own backup power and shift over to their own backup power as a requirement, not just as a, hey, something happened, we’ll switch over on our own, but being pushed onto their own generation.

And there’s those two scenarios I was discussing there. You’ve got your big unconstrained demand, and then your no new data center demand down at the bottom, and then the halfway point. As you can see, the PJM projections are much, much closer to that unconstrained demand line.

Policy Recommendations

The big reason I wanted to talk about this big report is because of the policy recommendations. The commission came together and made a few recommendations that if the legislature picks them up, could be coming to other areas as well.

• Recommendation one: Load certification being standardized before commencement of interconnection, utilities powering utilities to require binding forecasts for the load over a decade.
• Recommendation two: Will require some additional high voltage direct current systems, so they’re talking about regulatory support for some pilot programs there.
• Recommendation three: New interconnection agreements, that’s what we were talking about with the mandatory interruptible service and behind the meter generation. We spoke in the last white paper about some places that are putting in natural gas plants on the same campus as the data centers to provide direct power there at the facility instead of having to build out separate generation somewhere else and then transmission over.
• Utility commissions developing rate structures: Specifically allocate the cost of generation transmission build out to the data center sector. This is more on the financial side. If you’re aware, there’s a lot of public discontent over electric prices and placing the blame, rightly or wrongly, on data centers, but that is something that this commission was considering. So if you’re dealing with a legislature, it could come up there as well.

The upshot of that is that this commission and others like it are concerned about the extreme power that data centers require, the rapid growth, the strained capacity, and how to properly handle that new growth. We’ve got their base recommendations. We’ll see what goes into effect, but they are considerations that Virginia’s looking at as the largest data center market.

Power Quality Challenges with Data Centers

Thanks, Joe. Certainly an important topic for utilities, especially as the engineers that have to deal with power quality kind of on the ground get stuck with these appearing in their network, even some of these appearing in distribution when, in reality, they should be transmission-fed loads.

There’s certainly some unique power quality aspects to these in general, with the large abrupt change in power, very fast ramps and multi-megawatt steps in load. Daily profiles are much different or just basically gone. A large fraction of the load is HVAC, variable frequency drives. That introduces harmonic issues. And so, there’s a whole slew of unique aspects to these loads apart from just the fact that we don’t have the capacity to handle these. So, certainly a challenge for utilities.

Questions and Answers

Now, if you have any questions about the paper, feel free to type them here in the questions box. Or if you have a question later, give us a call anytime at 1-800-296-4120 or send an email to support@powermonitors.com. Again, if you have any questions now, feel free to type them here in the Questions box. And down there at the bottom of the paper, we did link the original legislative report, as well as our other two papers discussing the basics of data center power consumption and some other engineering challenges and ideas.

Can We Meet Demand Without Nuclear?

Big question, “Can we meet demand without nuclear?” That’s a great question. In my opinion, probably the answer is no. We should be using much more nuclear than we are, but obviously there are a lot of people and a lot of opinions on that, folks that have a lot more detailed knowledge on backbone power generation and transmission than I do. But I’d say we probably need every source of power we can get our hands on.

The bigger constraint with nuclear is going to be the amount of time it takes to get it spun up. These data centers can go in, my dad’s office is at the front of his house and there’s currently two giant cranes across the — you can actually see over the woods — building a new data center even closer to their house in Northern Virginia. And it’s going in, in less than 18 months, it’ll be up and running. There’s no way you could even have the public comment time on a new nuclear plant, much less permitting construction. There’s no way you could get any of that to happen in 18 months. You wouldn’t even get the legislature to agree to do it in 18 months, most likely.

And that’s kind of a fundamental problem is that the rate of these data centers going in is far higher than the rate of transmission, interconnect, or generation projects that utilities typically work at. The scales are so much different in terms of speed. Nuclear would take a long time, any sort of generation or transmission to interconnect normally takes a year or two of study and planning, and these data centers aren’t gonna wait for that.

Is the Report Focused Only on Data Center Growth?

We got another question about, “Is the report neutral with regard to all load growth or is it focused just on data center growth?” So if we take a look at that chart here on the second page, this bottom line, this is the average monthly energy use projected, and as you can see, it is increasing at a very low rate. That’s assuming no new data centers are built. They stopped building data centers right now in the state of Virginia. So you can see there is some growth. Some of that they expect to be offset by increases in efficiencies.

I think we talked about this in either the first or second data center power discussion is that yes, there are more devices in homes using electricity. However, things have also gotten significantly more efficient in terms of appliances. So even as you’re building residences, they’re not using as much more power as you’d expect because the efficiency is getting better over time. So there is some increase they’ve projected even with no new data centers starting right now. And again, state of Virginia, remember, over a quarter of our electricity goes to data centers now. Projected to be nearly half of all of our electricity. If you’re in a state with smaller data centers or very few data centers, that number’s gonna be much, much smaller. Good question.

How Are Utilities Impacted by Data Center Timelines?

That’s a great question here, “How are electric utilities impacted in general considering the timeframe for power delivery and interconnection much longer than the time a data center is built?” Utilities are struggling. I’ve seen in cases where what should have been a transmission-connected data center got put in distribution instead just because it was faster, and it kinda got snuck in because the rules and process for adding stuff into distribution is much faster and the data center didn’t wanna wait. It was used in an existing building. They didn’t wanna wait a year plus for transmission study, and so they snuck it in distribution. And now the utility’s kinda stuck with it. They didn’t really realize what they were approving.

So these data center places are doing whatever they can to get these connected however they can. In some cases they are doing their own onsite generation with solar or even diesel or gas or diesel generators or oil generators, having their own onsite generation and being kind of net zero to the utility. Because even though that’s extremely expensive, it’s still faster and they think that’s gonna pay for itself very quickly anyway.

The data centers themselves are doing whatever they can, even without the utility, but utilities are struggling. There’s enormous pressures to get these things connected, and that kind of goes against the mindset of the utility where things are slow, deliberate, and careful, as they need to be to make sure the grid’s reliable. And that’s just a fundamental impedance mismatch there. There’s no consensus on resolving that.

I was just talking to somebody who’s gonna be running a construction project out in Texas for 10 big, billion dollar data centers, and the plan was to have those small natural gas plants on the campus, have a couple smaller ones — they’re calling them modular gas facilities — but that was their plan from the get-go. Not even gonna worry from the beginning about how the grid would be able to support them. Say, look, they won’t be able to. Go natural gas right from the outset with hopes to connect up to the grid later.

Closing

Well, some great questions there. Again, if you have a question later, give us a call anytime at 1-800-296-4120 or send an e-mail to support@powermonitors.com. Or if you’re dealing with a data center power quality issue and you’d like a second set of eyes on the data or wanna just talk about power quality with these, feel free to give us a call. We’d love to chat about power quality.