Rethinking the energy grid: The evolution of mission-critical power

The COVID-19 pandemic has brought on a new age of growth for digital transformation, and the world’s reliance on the internet will only continue to rise, writes Jimmy Yam, Vice President of East Asia for Eaton.

From telemedicine to non-fungible tokens (NFTs), these are just some of the amazing innovations in technology spurred by the pandemic as more patients and artists were forced into a digital space.

As our digital dependency grows and more companies turn to cloud computing and increase their data storage needs, there has been a growing spotlight on the data centre industry and its sustainable development.

Why data centres and sustainability have often been at odds

From storing, processing and analyzing the data needed to power any online service, data centres are the backbone of the growing digital economy, but have been notorious to be energy-guzzling facilities.

From powering the servers and storage equipment to cooling infrastructures, data centres have a large appetite for electricity. Today, it is estimated that data centres account for 1% of world’s electricity consumption and 5% of global greenhouse gas emissions. And with IDC forecasting a 17.5% annual growth rate for the industry, it is critical that we engineer a future with more efficient and sustainable data centres.

In light of questions surrounding the sustainability of data centers, cities like Singapore, Frankfurt and Amsterdam have implemented moratoriums on building new data centres. However, digitalization is undeniably a key strategic lever to economic growth that organizations and governments cannot afford to ignore – leading governments of the aforementioned cities to review such policies in view of strong demand and growth potential for data center services and e-commerce services.

Despite the easing of moratoriums, the core challenge of data centres resource efficiency is still at play. Global policymakers need to recognize that there’s no going back from our internet-reliant lives, and industry and business leaders need to put sustainable growth before short-term profits. With public-private cooperation, we can work towards policies and systems that facilitate energy efficiency, renewables procurement, and research and development to limit growth in emissions.

Distributed grids: A promising solution

Recent innovations around energy efficiency and distributed grid systems offer hope for a sustainable energy future. With traditional centralized grids, a lot of energy from fossil fuels is wasted in generating power and delivering it over long distances to customers, resulting in a fairly inefficient distribution system.

Since distributed energy grids generate electricity at or near its site location, a bulk of the energy that would traditionally be lost in transportation can now be conserved. What’s more, any energy saved can be stored and sold right back to the grid, minimizing further waste and maximizing limited energy resources.

This enables distributed grids, particularly those that use renewable energy sources, to be much more sustainable than traditional grid systems. It’s also a more cost effective solution – distributed grids are less expensive to set up due to their smaller scale and lower distribution voltage levels. Grid users can even share existing infrastructure to further reduce costs.

When deployed together with electricity storage systems such as uninterruptible power supply (UPS) batteries, organizations can further reduce facility operating costs and in some cases, earn additional revenue through participation in the energy market.

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Such models are no longer textbook concepts, and have already been put to the test in the industry. One example is a pilot project between Microsoft and Eaton which involved the development of an intelligent UPS equipped with a layer of software algorithms and controls to enable interaction with the power grid. Successfully piloted in Scandinavia and Ireland, and commercially installed in a data centre facility in Finland as early as 2019, such technologies ultimately enables energy producers of all scales to turn their UPS into a revenue-generating asset.

Lessons from the region: How Australia distributed their grid

While renewable energy and decentralized grid adoption is still relatively nascent in most of Asia, this is likely to change in the coming years as the region speeds towards digitization.

Regionally, countries like Australia have been successful in moving towards a decentralized grid network where demand for distributed grids is expected to grow significantly. In fact, Australia’s Electricity Network Transformation Roadmap estimated that by 2050, decentralized grids may contribute up to 45% of the country’s electricity generation capacity.

As part of its shift towards a greener future, the Australian government has also been funding projects that show an effective use of distributed energy resources which can help its transition to a secure, reliable grid dependent mainly on renewables. In 2019, they awarded AU$9.6 million in funding for 12 distributed energy grid research projects to find new ways of managing the effect of high resource volumes used in different parts of the electricity grid.

Strong industrial and environmental policies like this can support our move to a more sustainable energy future that incentivizes increasing renewable electricity capacity — not only through centralized generation but also through consumer level initiatives. With ASEAN economies experiencing rising GDP growth, energy demand is expected to increase tremendously from businesses as well as households.

This is the time to focus on renewable energy production and a distributed energy generation approach to reduce our reliance on fossil fuels. With governments and industry leaders working together to incentivize investment in renewables, we can ensure a sustainable tech-driven future for the region.

ABOUT THE AUTHOR

Jimmy Yam is responsible for driving the growth of Eaton’s electrical business in the East Asia commercial organization. Eaton is powering what matters, helping customers solve their most critical electrical power management challenges.