Executive Summary
- Data centres, when part of a network, can become virtual power plants and help alleviate the pressure on the electrical grid by “switching off” and freeing up power.
- The mainstream media narratives paint data centres as “energy vampires” and it’s rather an old narrative; data centres aren’t passive consumers but rather assets that are capable of helping the constrained grid.
There is a huge disconnect between the industry and the public; there are mainstream media narratives that data centres are “energy vampires” or “parasites” draining public resources because, according to the UK Parliament Research Briefing, data centres consume 2.5% of the UK’s total electricity, which is set to rise fourfold by 2030. There are prominent debates in particular about the data centre expansion in growth hubs such as West London. But data centres aren’t passive consumers, and this is where the disconnect lies. In fact, they are critical decentralised assets that are capable of helping the grid handle the pressure it is under – yes, ironically, AI workloads are part of the cause of that pressure. But yes, the public isn’t aware of how facilities are capable of helping the grid.
Modern data centres are turning into an active grid stabiliser with the utilisation of smart software; effectively, they’re turning into Virtual Power Plants that can help protect local communities from blackouts.
What is a “Virtual Power Plant”?
To explore the definition of virtual power plants, we have to backtrack to the definition of traditional power plants. Traditionally, power plants are industrial facility that generates electricity by burning fossil fuels to boil water, resulting in high-pressure steam that spins a large turbine to produce electricity. They assist the grid by pushing electricity into it and have been the backbone of the global electrical grid for over a century.
A data centre virtual power plant pulls its own plug out when demand is low, helping alleviate the pressure and demand on the grid. It’s dubbed “virtual” because it’s entirely software-driven; if software aggregates 10 or 20 facilities across the UK, it becomes one digital network, working together as one giant invisible power station that supports the grid by “turning off” when demand is low or can be rescheduled.
Data centres can “generate” power
There are two simple mechanisms software uses to help the grid during peak summer demand:
- Â The lifeline: Data centres use their banks of emergency UPS batteries during an outage or wobble. This works to instantly pump power back into the public wires for a few seconds until the grid stabilises – and seconds are crucial in the infrastructure game.
- Peak shaving: Data centres can pull the plug, i.e. stop drawing power from the street during hot summer afternoons and switch to their alternative on-site power, which helps alleviate the demand on the electrical grid for local homes, schools and hospitals to use.
Joining a VPP network has its benefits for data centres
A lot of data centres have millions of pounds worth of batteries and backup systems that are rarely used because they’re waiting for power cuts that just don’t happen as much anymore, thanks to strategic resiliency planning. But what if they could be put to better use?
Joining a VPP network means the operators are doing a public service and the National Grid actively pays them for this flexibility. Thus, idle backup gear becomes an active revenue stream. UK grid regulators are now moving to reward “good grid citizens” with prioritisation for faster connection approvals.
A new blueprint for the UK grid
The term “energy vampire” for a data centre is rather outdated especially as strategies such as heat reuse recovery are pursued to enable infrastructure to give back to the communities they connect together digitally.
As the UK goes full speed ahead with its clean power mandates, the grid will need to adjust to the transition and potentially get some flexible shock absorbers. Data centres are part of the solution to handle this transition if they are part of a network that are acting as a virtual power plant network.
