Power is no longer just a requirement in data center development – it is a key differentiator. This week at NAIOP’s I.CON Data Centers in Jersey City, New Jersey, two experts discussed how utilities and developers are working together to navigate rising demand, explore alternative energy solutions, and investing in infrastructure upgrades to tackle grid constraints and evolving energy needs.
National Grid Ventures Vice President, Asset Development, Nabil Hitti, and Christie 55 Solutions Managing Director Bob Martin shared their perspectives on not only the challenges but also the opportunities related to delivering power to data centers.
The Key Role of Partnerships
Utilities and power suppliers have been connecting generators for many years, and there are lessons learned that can be implemented in the current landscape. Hitti said he has been looking at how to increase speed to market and work with the power suppliers to bring the power that’s needed on a co-located basis, behind the meter or in front of the meter.
“You have to work with all your stakeholders on a daily basis,” said Hitti, noting that “stakeholders” includes local communities.
“We build gas and electric infrastructure over hundreds and hundreds of miles, which means there are thousands and thousands of communities that we have to bring along and partner with to make sure that we are able to do that in a cost-effective way and a way that is success for both of us,” Hitti said.
Updating Aging Power Infrastructure
We get caught up in discussions about where power is located and NIMBYism, but we forget that the grid needs massive upgrades, Martin said, noting that 70% of the grid is 25 years or older. “In that length of time, consider the changes in technology that have [occurred].”
“One thing I know for sure is that the utilities, the load-serving entities, have to play a major role in looking forward; in long-term planning,” Martin said. “I think FERC [Federal Energy Regulatory Commission] and RTOs [Regional Transmission Organizations] across the country really missed the boat on this.”
“The bottom line is that those major players should have been worried about supply and demand,” Martin said. “And I think that now is the time to get all the players in the room working to drive [progress] and make things work long term, because it affects all of the overall data center business.”
“In the last 20 years or so, we haven’t seen the growth in the demand we’ve just started to see in the last couple of years,” Hitti said. “So, a lot of the utilities infrastructure ages, because you’re not really making as much investment when you don’t really see that load growth, and the same is true with power supply.”
Now, companies like National Grid Ventures are focused on modernizing and investing in the grid, as well as anticipatory planning to keep ahead of the changing technology and prepare for what’s next.
“For us, it really is just actually being able to think ahead on those things, understand the dynamic and be part of the solution on how we advance these innovative ways [to deliver power] and make investments into making the grid much more robust for the future,” Hitti said.
Anticipatory planning is a team sport; it requires working with regulators, with government officials, with other stakeholders to get everyone working collaboratively and look ahead to what’s coming next.
Trained Labor: A Critical Resource
Another long-term challenge that needs immediate attention: training the next generation of specialists who understand how to manage power networks efficiently: power system engineers, electrical engineers, mechanical engineers and others.
“I remember when I graduated, we had a couple of hundred folks graduating with power systems [degrees]; nowadays, you’re lucky to have four,” Hitti said. “We need folks who can help us bridge that gap because we have a big gap on the people side.”
“We always talk about equipment; we talk about having turbines ready.” Hitti said. “But then what? If you don’t have the people who know what they’re doing, that’s not going to help you that much.”
“You need a generation of kids going into those trades to be able to build those centers – not just the data center side, but the power generation side,” said Martin.
A Long-term Strategy for Success
Nuclear power is definitely a major part of the long-term strategy for power generation, Martin said. “The SMR [Small Modular Reactor] technology is dynamic right now.”
There are six or seven major players – companies like GE Vernova, Hitachi, TerraPower, and Holtec – that are investing billions into SMR and are going to meet that race in the next 7-10 years, Martin said.
“Everything plays a role in meeting the increasing need for power: batteries, solar, wind, natural gas, combined cycle, single cycle, nuclear,” Hitti said. “It’s really important to not just think about one single option.”
“Your supply and demand are all dynamic and real-time,” Hitti said. It’s better to have more tools in your toolbox, he added, particularly when managing the peaks and valleys of changing economic conditions, variable weather conditions, and staying cost-effective for customers.
“That’s why we really believe in an ‘all of the above’ strategy; not because it’s a buzzword, but it’s genuinely the right tools to have for operators, for people that are actually balancing the system to produce the best outcome.”
