Utilities and the Transition to a Smart Grid: The Data Center Perspective

Of the $787 billion federal stimulus bill passed in 2009, more than $3.4 billion was targeted at modernizing the nation’s electricity transmission and distribution systems and promoting investments in Smart grid technologies. That’s great news, considering that the central framework of the nation's electrical grid was established in the late 19th century and is now technologically outdated. It is no longer capable of addressing the unique demands and challenges of a next-generation power infrastructure.

The transition to a smart grid will enable utilities to have transparency into and better manage power distribution, while giving customers the ability to control electricity consumption and costs. But on the flip side, the transition to a smart grid will not be easy. Utilities will see millions of data transactions each day and the information coming in will be vastly more complex than the output of analog meters.

Of course, any new technology meets healthy skepticism. Utilities are unsure of the path forward and find themselves wondering how they will manage all of this new data. In fact, according to a March 2010 Microsoft Worldwide Utility Industry Survey, only eight percent of utilities have actually completed their smart grid technology implementations while only 37 percent have projects underway. More than half haven’t yet started.  

But even in light of this dilemma, the transition to a smart grid seems to be inevitable. So, as utilities gear up for this important transition, they need to understand how it will impact a critical segment of energy users – data center managers.

Data centers use a significant amount of energy. According to the U.S. Environmental Protection Agency, data centers account for 1.5 percent of total U.S. electricity consumption at a cost of $4.5 billion annually, an amount that is expected to almost double over the next five years.

For data centers, the development of a smart grid promises a number of benefits, including greater control of power consumption, energy efficiency, and cost reductions. It also will create a new layer of data to support critical decision making about energy usage.

Here are a few thoughts and suggestions on how utilities can work with these large users of electricity and use smart grid capabilities to provide extra value for data center managers.  

Time-of-Use Rate Information to Control Energy Costs

Data center managers expect enhanced time-of-use rate information. Utilities need to tell them how they’re going to work with large energy consumers to make the best use of this information to manage energy costs.

Demand-Response Functions

Data center managers want to know what they can expect from demand-response functions. Critical facilities cannot go down at any time. The ultimate goal would be to work with utilities to turn off or shed designated, non-critical loads if certain conditions exist or during peak demand times. For example, the utility would alert the facility if the rate of electricity increases to a certain level. The building automation system that controls most elements of the facility (BAS) would then shed load by taking predetermined actions, such as shutting down non-critical services, or aggregating applications on fewer servers to reduce energy consumption at the expense of performance. Such actions may be necessary to meet demand-response commitments. Few data centers have this capability today, but we can expect to see products and services to support such functions in the coming years. Alternatively, local power generation could be used to reduce utility power consumption, since most large data centers have backup generators.

Reliable Power

According to the U.S. Department of Energy, “More blackouts and brownouts are occurring due to the slow response times of mechanical switches, a lack of automated analytics, and ‘poor visibility’ – a ‘lack of situational awareness’ on the part of grid operators.” Data center managers want to know how utilities will use smart grid functions to improve reliability. One idea is that utilities could provide warnings when the grid is stressed so data centers can take the necessary action to maintain uptime.

Alternative Energy Sources

Data center managers are looking at alternative energy sources, such as renewable and distributed generation. The motivation for doing this is both cost-driven and a commitment to social responsibility. For example, Emerson Network Power is working with a company that has installed a 100 kW photovoltaic array on the roof of the Emerson data center in St. Louis to convert the power generated by the array for use in meeting facility power demand. It would be helpful for data center managers to know utilities’ expectations from large energy consumers as they increase the use of renewable energy sources.

As large consumers of energy, IT departments have a lot to gain from the transition to a smart grid, as it will introduce more powerful information to power-usage decision making. As such, utilities will benefit from knowing what data center managers and IT departments are expecting as a smart grid becomes a reality. The transition will not be without challenges, but it will result in dramatic economic and environmental benefits, which is a win for everyone.