Hyperscale data centres will need ‘behind the meter’ gas generation

There is not the grid power to connect new hyperscale data centres so they will have to build onsite gas electricity generation or be flexible to use excess wind power in the grid in Scotland. This was the message from various sessions at major energy conference in Glasgow last week. Our Director Kat was at the ‘All Energy’ conference, a huge gathering of energy professionals across renewables, energy transmission and fossil fuels. Here she writes a bit about some of the surprising things she heard there in the various presentations.

I went along to the All Energy conference at the Scottish Exhibition Centre to wander the stalls and to listen to some of the many parallel sessions taking place, especially those on data centres and energy and to generally get my head into what energy professionals were saying about how hyperscale data centres could be powered.

I was pretty shocked at what I heard. New gas electricity generation seemed to be taken for granted. In multiple sessions that I attended, reference to onsite ‘behind the meter’¹ gas electricity generation was so casual. It was being taken as read that, if these AI hyperscale data centres are to happen, (which, for some reason, no one seemed able to question) then it was just inevitable that we would be building new gas turbine generators all over the place.

I didn’t hear a mention of climate in the sessions I was in. Stuart Okin, Director of Cyber Regulation & Emerging Technologies, at Ofgem said, in one session, that no new data centre proposals south of Preston, apart from AI Growth zones, would get a grid connection and that they would all need to connect to gas. In the questions afterwards I managed to get one in about the climate impacts and he said that the decisions on whether the gas turbines would be built sat with DESNZ, Ed Milliband’s department. (But what does this mean in Scotland where energy consenting and the planning system is devolved?- surely something for the new Scottish Government to get their heads round urgently). There just seemed to have been precious little discussion on the implications of this vast new source of energy demand, and just a strange sense of inevitability. 

The second thing that was obvious was that some people there felt distinctly uncomfortable about the situation. Representatives of NESO, at every session I heard them speak at, emphasised the need of data centers to flex their demand with electricity availability so that they could take advantage of renewables. A representative of Scottish Power Transmission at another session seemed skeptical that most hyperscale data centres could connect to the grid for at least 10 years if not more.

The CEO of NESO has been widely reported as saying, at a conference in London last week, and again at the All Energy conference that new AI data centres should go to Scotland, as they won’t get connected in England, especially near London. But what was missed from most of the reporting – apart from the original article in the Financial Times, was that the key element was that they should be flexible to be able to use Scotland’s excess wind power when it is available.

It was clear from the NESO people I saw speak that they were extremely keen to emphasise the need for new AI data centres to have a flexible demand and dial up and down with the wind generation. It is unclear, however, what the hyperscalers think of this as a proposal. They are famously demanding with their energy contracts insisting on 99.999% uptime, and the idea that they should use energy when the wind is blowing and dial down use when it is not, doesn’t seem like it will be an attractive prospect for them.

The key take way for me from the conference was that the arrival of hyperscale AI data centres has put a new lease of life into those working in gas generation and has caused a headache for those in NESO and Ofgem who are trying to regulate and connect energy generators and users. I have said this before – but I think it’s time that we have a moratorium on hyperscale AI data centres to allow time for some proper analysis on the impacts and to deliver some serious policy work and oversight.

My full quote for the Guardian:

“Those promoting the rush for hyperscale AI data centres seem to be living in a parallel reality where the last fifty years of climate science hasn’t happened, and where we aren’t already experiencing the signs of climate breakdown.

“Time and again, the conference sessions on AI and hyperscale data centres seemed to be taking it for granted that onsite gas generation would be needed if these ultra energy intensive developments are to happen, due to the impossibility of connecting them to our congested grid. 

“Those responsible for supplying and distributing energy are obviously struggling to work out how to accommodate the astronomical energy demand. NESO officials were valiantly trying to make the case that data centres should have to dial up and down energy demand with the vagarities of wind generation, something which seems unlikely to be popular among the famously demanding hyperscalers, but it was especially alarming to see onsite gas so normalised in the discussions. The only solution is to have a moratorium on the hyperscale AI data centres while a proper analysis of their impacts on climate targets, the grid and our communities can be carried out.”

1. Behind the Meter means electricity generation that goes direct to the data centre and does not come from the grid. Behind the meter gas generation is happening a lot in the US where it is causing local air pollution as wellas noise issues and vast increases in greenhouse gas emissions. ↩︎