From pv magazine 03/25
Goldman Sachs has estimated global data centers use around 55 GW of electricity and say demand will rise 165% by 2030, thanks to advancements in AI.
Dan Shugar, chief executive of solar panel mounting system manufacturer Nextracker, told news organization CNBC, in June, that he expects renewables to be the main energy source for data centers, ahead of natural gas. He said technology companies want to be sustainable and solar and energy storage companies should embrace that.
S&P Global sustainability and data center analyst Dan Thompson told pv magazine the renewables and data center industries could have a symbiotic relationship if details can be ironed out regarding the scaling of clean energy.
“To date, data centers don’t run directly off renewables at scale and are instead supplying the renewables to the grid, and they themselves are drawing from the grid,” said Thompson. “Most renewables are just too intermittent [in their generation] to supply what is effectively a baseload requirement from the data centers.”
With baseload power demand rising, data center power use is expected to become denser because of AI’s high processing requirements. The current 162 kW/ft2 electricity usage in data centers could hit 176 kW/ft2 in 2027, according to Goldman Sachs, which doesn’t factor in loads for cooling and other infrastructure purposes.
The owners of big, “hyperscale” data centers appear to want proximity to renewables sites, amid a desire to claim they are consuming their own clean electrons, said Thompson.
Future hopes
That’s for the future, though. Right now Microsoft, Google, and other hyperscalers want sustainable practice at their data centers, even as they are being co-located with gas and nuclear power plants. “My personal belief … is that intermittent sources of generation will always be a grid play, rather than a direct consumption-type model,” said Thompson.
Adam Elman, Google’s director of sustainability for Europe, the Middle East, and Africa, said the company wants its data centers to run on “24/7 carbon-free energy by the end of the decade.”
With AI-driven facilities under the microscope for their vast energy needs, Google secures clean energy via power purchase agreements (PPAs). That should be a target market for renewables companies, Nextracker’s Shugar told CNBC. It is not clear how hyperscalers identify renewables companies, Thompson said, but they may be part of the RE100 group of companies committed to run on 100% clean power, or members of the Washington DC-based Clean Energy Buyers Association business grouping.
Different data centers have different needs. Hyperscalers seek to integrate large-scale, AI-optimized clean energy into their sites. Meanwhile, edge data centers, which process data nearer end users, prioritize local, modular renewable energy solutions
Co-location question
Co-location is an obvious approach and Verne has around 250 kWp of solar generation capacity at its data center campus in Pori, Finland.
Kim Gunnelius, Verne's head of Finland, said the 2,600 m2 solar plant has 850 panels. “The solar power plant provides approximately 10% to 15% of the data center’s power needs,” said Gunnelius. “Verne’s data center campus in Pori is a unique underground facility, spread across nine independent tunnel halls. The panels were sourced and installed on top of the tunnels by our local partners in the Pori district. Our new data center design ensures we have plenty of flat surfaces to enable the deployment of solar panels. We are committed to using 100% green energy and producing it on site is a great option, where feasible.”
Gunnelius acknowledged co-location is not always possible, however, as renewable energy is not available everywhere. “The question is no longer how data centers can incorporate green energy but in which location that is actually viable,” he said. “The most immediate and practical step is to switch to buying renewables, preferably through PPAs. Where feasible, renewable energy should be implemented on site. In the long term, you can also look at developing data centers in areas with good availability of renewables.”
That is what London-based Verne did in its Nordic markets.
“We always assess the possibility of implementing solar when developing a new data center but it is not always feasible to implement in brownfield locations, due to existing structures,” said Gunnelius. “In one instance, the roof structure, unfortunately, could not support solar panels without significant strengthening.”
Scalable storage
Shaz Shamim, senior consultant at LCP Delta, said “renewables developers often take a traditional approach, prioritizing utility-scale PPAs rather than adapting to data center needs, which include 24/7 energy matching, integrated energy storage, flexible load shifting, or [customer-sited] behind-the-meter generation, and co-location near renewable energy generation hubs.”
Serving those needs could be lucrative. Tailored solutions could help renewables generators harness the data center market. US-based startup Exowatt has done that by coupling a solar energy collector with a thermal battery that can provide heat or clean electricity on demand.
The modular Exowatt P3 can be deployed in 40-foot containers. “Modular systems are much easier to scale with,” said Exowatt CEO and co-founder Hannan Happi. “We wanted to develop a renewable energy solution to power the rising demand for energy given the most recent AI boom over the last couple of years.” The company has been backed by OpenAI Chief Executive Sam Altman.
“There is abundant solar energy available and the world is not using it to its full extent,” said Happi, describing the problem Exowatt has set out to solve. “The challenge with solar was that it’s not dispatchable, so it’s not really applicable to types of data center loads that are looking for baseload power or very long dispatch cycles.”
Exowatt had to come up with a way of developing a modular system that could scale linearly and still be dispatchable. According to Happi, the dispatchability angle comes from figuring out how to extend the life or availability of silver and electrochemical batteries.
“Even though they’re getting cheaper, they are still very expensive and not really suitable for 12, 16, 18 hours of storage,” said the CEO. “We said if we could just take the incoming solar energy and convert it first to heat, and store heat – because heat is very inexpensive to store compared to electricity … you could store a lot of it and very inexpensively and then use it whenever you need it.”
The startup launched the P3 system in 2024. It’s a three-in-one setup comprising an optical lens that captures energy from the sun and converts it to high temperature heat.
The heat is stored in a sensible heat battery – as opposed to latent or thermochemical heat storage – at a rate that is significantly cheaper than electrochemical battery alternatives, Happi said. The heat is dispatched and converted into electricity using the P3’s built-in heat engines.
Tremendous demand
That architecture makes the system suitable for powering data centers and other types of commercial industrial loads. “We’ve seen a tremendous amount of demand for the product, especially from data center customers,” said Happi. “Data center customers and other customers find this an attractive solution because it is something that you can deploy in the immediate term.”
Happi said Exowatt has “amassed over 90 GWh of demand backlog from various types of data center developers, energy developers, operators, and so on.”
The team is now working on building units and scaling. The goal is for the P3 to work at scale for $0.01/kWh, using US materials.
Happi said he believes the data center market will continue to grow as operators try to stay ahead in the AI game.
Heat storage is a grid-balancing technology as it enables the use of green energy twice, reducing the need to use other energy sources for heating purposes. As developers keep opening data centers, and they need energy, the grid will require significant investment. Goldman Sachs Research has estimated around $720 billion of grid spending may be required through 2030.
Happi said the US data center market offers a lot of opportunities, and will only get more bullish as it responds to the release of Chinese AI system DeepSeek. He is also optimistic about the Donald Trump administration and its data center expansion proposals.
“I think the Trump administration is heavily, heavily in favor of data center expansion,” said Happi. “People are super excited about the data center demand for certain technologies, renewable technologies, whether it’s nuclear, geothermal, or even solar and batteries. They see a huge opportunity here, especially in the US. The load growth was flat until recently and now it’s growing at a fairly exponential rate, which creates a huge opportunity for these technologies to come online.”
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