The Role of Data Centers in the Carbon-Neutral Transition

By Patty Solberg & Maribel Adydan (Garza) , ENGIE North America Inc. with contributions by Eric Lamendour .

Data centers are at the heart of the world’s digital infrastructure, supporting everything from cloud services to streaming platforms. As the demand for digital services grows, so too does the energy consumption of these facilities. To meet this demand while addressing environmental concerns, energy integrators like ENGIE have been making significant strides toward carbon neutrality with major data center operators. We leverage our experience in designing, implementing, and operating data center energy systems to provide innovative solutions for data center operators.

The Challenge of Energy Dependence

Despite efforts, data centers still face a significant challenge: their reliance on local or national power grids. These grids, which often provide a mix of energy sources, are beyond the control of the data centers themselves. This means that even the most eco-conscious data center operators are often tied to energy sources that may not align with their sustainability goals. Compound this with extending grid interconnection and transmission upgrade timelines, complete dependence on grid power can be time consuming and expensive.

Furthermore, no power grid can guarantee 100% uptime, which is critical for the continuous operation of data centers. A brief power outage — lasting even a fraction of a second—can cause servers to crash, leading to significant disruptions in IT operations, increasingly seen across areas of the US grid.

To mitigate the risk of power interruptions, data centers have traditionally invested heavily in uninterruptible power supplies (UPS) and diesel generators. These backup systems ensure that, in the event of a grid failure, operations can continue without interruption. UPS systems provide an immediate power bridge until diesel generators can start up and take over the load. While effective, this approach comes with considerable costs—both in terms of capital expenditure (CapEx) for the equipment and operational expenditure (OpEx) for maintenance and fuel. Additionally, the reliance on diesel generators poses a major challenge to sustainability efforts, as they contribute to carbon emissions.

Moving Toward a Greener Energy Model

For decades, data centers have had to balance the need for reliable power with the imperative to reduce costs and emissions. Traditionally, this has meant relying on a combination of grid electricity for its relative affordability and diesel generators for backup power. However, the industry is now exploring more sustainable energy models that can offer both reliability and a reduced carbon footprint. One promising approach is the "prosumer" model, in which data centers become both consumers and producers of energy, integrating their operations into a local microgrid managed by an energy provider.

In a prosumer model, energy assets such as solar panels, wind turbines, and even hydrogen or biomethane systems are integrated into the data center’s energy infrastructure. These assets are part of a localized microgrid that ensures a dual feed — providing both primary and backup power to the data center. This setup not only enhances reliability but also supports the center’s carbon neutrality goals. The microgrid, designed to meet the specific needs of the data center, is managed by an energy specialist, such as ENGIE, who takes responsibility for its operation and maintenance.

Benefits of the Prosumer Model

The prosumer model offers several key benefits for data centers. Firstly, it supports the transition to carbon neutrality by incorporating renewable energy sources into the center’s operations. This reduces reliance on grid electricity, which may come from non-renewable sources, and minimizes the need for diesel generators. By doing so, data centers can significantly reduce their carbon footprint and contribute to global sustainability efforts.

Secondly, the microgrid guarantees high availability, ensuring that IT production remains uninterrupted even during incidents. This is achieved by either having several independent energy sources—such as solar power and a hydrogen-based backup system—available at all times, or N+2 fire-based energy assets such as gas turbines. The microgrid’s ability to switch seamlessly between these sources ensures that the data center’s operations are not only reliable but also resilient against external disruptions.?

Moreover, even though the microgrid is primarily designed to meet the needs of the data center, it can also play a broader role in supporting the utility grid. By integrating with the utility grid, the microgrid can provide additional services, such as frequency regulation or capacity support, enhancing the overall stability and efficiency of the energy network. This dual functionality makes the microgrid a valuable asset not just for the data center, but for the wider community as well. In turn the data center operator, supporting overall grid development, can benefit from faster time to market, or operate sooner without 100% firm power guarantees from the utility.?

ENGIE’s Role in Implementing the Prosumer Model

ENGIE is at the forefront of developing and implementing these prosumer microgrids for data centers. By leveraging our expertise in energy management and renewable technologies, ENGIE designs, builds, and operates microgrids that are tailored to the specific needs of each data center. This includes overseeing the integration of various energy sources, managing the day-to-day operation of the microgrid, and ensuring that it delivers reliable, sustainable power at a predictable cost.

Through power purchase agreements (PPAs), data centers can enter into long-term contracts with ENGIE, securing their energy supply at a fixed rate while benefiting from the sustainability and resilience of a microgrid. This arrangement allows data centers to focus on their core mission — IT production — while ENGIE takes care of the complexities of energy management.

Conclusion

The transition to a prosumer model marks a significant shift in how data centers approach energy management. By adopting this innovative model, data centers can achieve energy resilience, reduce their carbon footprint, and contribute to the broader transition to renewable energy. ENGIE’s expertise in designing and operating microgrids makes it a key partner for data centers looking to make this transition, ensuring that they can meet both their operational needs and their sustainability goals.