Decarbonisation of Data Centres

Up to 3% of the world’s total power consumption is expected to be consumed by data centres. The non-profit organisation Beyond Fossil Fuels estimates that electricity demand in Europe due to data centre investment could increase by up to 160% by 2030. If fossil fuels meet this energy demand, emissions from data centres could rise from 5 million tonnes of carbon dioxide in 2025 to around 39 million tonnes at the end of the decade. Focusing on the United States, AI data centres are expected to consume up to 12% of the energy by 2028. Implementing sustainable energy solutions has never been more crucial.

Advances in digitisation would not be a problem if it were not for the large amount of energy that data centres require to keep their facilities from overheating and to run properly. Servers and equipment in data centres have become energy guzzlers – and also water guzzlers – as well as major global carbon emitters.

Global leaders within the energy and AI sectors state that the technology industry must accelerate the pace of creating new and innovative solutions to move data centres involved in AI generation away from fossil fuels.

Dealing with the issue of energy sustainability in data centres is no easy task, hence it has become one of the major challenges for governments over the next few years. As well as reducing greenhouse gas emissions from these spaces, the use of renewable energy not only protects them from volatile energy prices but also reduces their environmental impact, which is why major data centre operators such as Amazon, Microsoft, Meta and Google are leading the corporate acquisition of renewable energy through PPAs.

In this new post of the SynerHy blog we will discuss how to decarbonise data centres through innovative solutions focused on hydrogen technologies. There are several companies that already have pilot projects running with fuel cell technologies, and there are even projects planned for a future 1 GW scale.

Fulfilling the energy demands of the IA through innovative solutions

Artificial intelligence has witnessed an explosive growth over the past few years, where generative AI tools such as ChatGPT have boosted the demand for powerful computing infrastructure. However, a harsh reality exists, as traditional power grids struggle to keep up with this onslaught of energy consumption.

The urgency for advanced solutions, such as hydrogen-powered data centres, arises as the technology industry is realigning towards AI. Large GPU-powered language models have high energy demands, and delays in power supply can jeopardise business operations. This is a problem exacerbated in US states such as California and Virginia, where public service companies are overloaded.

More than meeting demand, though, the environmental impact of AI growth must be addressed. Companies such as Google aim to achieve zero net emissions by 2030, while Microsoft has committed to becoming carbon-negative. On-site energy solutions, such as hydrogen fuel cell technology, align with these goals.

Hydrogen-powered data centres are not just technical wonders; they are a practical solution for balancing our energy needs with climate goals. Their fast deployment and sustainable operation make such centres essential tools against climate change.

The way hydrogen-fueled data centres work

Hydrogen-powered data centres use fuel cells to generate electricity. These fuel cells combine hydrogen and oxygen to produce energy, emitting only water vapour as a by-product and waste heat.

Benefits are obvious. On one hand, hydrogen power generation systems can be deployed faster than connecting a conventional data centre to the grid by half the time. This represents a huge step change for technology companies, which are under great pressure to scale up their AI operations quickly. On the other hand, as the hydrogen supply chain evolves to incorporate more green hydrogen (produced by renewable electricity and water through electrolysis), these data centres will become true pillars of sustainable energy.

So far, technology companies and industrial partners are exploring how to integrate small-scale hydrogen fuel cell systems for on-site power generation, especially in grid-constrained areas. Investing in green hydrogen innovation on a larger scale, whether through renewables or nuclear, can make these systems more carbon neutral and broadly available.

Clean hydrogen can be produced in a variety of ways, from natural gas reforming with carbon capture to electrolysis with renewable energy and nuclear power. Nuclear power start-ups such as Helion and Oklo are laying the foundations for next-generation reactors to support hydrogen production, although these technologies may require some time to scale up.

Building a hydrogen-powered data centre with significant capacity is not an easy assignment. The ECL project in Texas offers a reasonable estimation: around four years for a 1 gigawatt site. Scaling up green hydrogen production remains a challenge, hindered by the high costs of electrolysers and infrastructure. Furthermore, transitioning the hydrogen supply chain from fossil fuel-derived sources will require organised efforts and financial support.

Nevertheless, advances in renewables and increased investment in hydrogen infrastructure could hasten this timeline. Government policies promoting hydrogen as a clean energy carrier, coupled with private sector collaboration, can also play a key role in shortening deployment timelines.

To summarise, advantages and challenges of H2 technologies in data centres. Advantages:

• • Environmental benefits
    
    • • Carbon emissions reduction: Both PEMFCs and SOFCs can operate electrochemically using hydrogen without burning fuel, producing only water and heat as by-products. For those cases where SOFCs are fuelled with natural gas or biogas, their low carbon emissions are much lower than traditional combustion generators. Either option will significantly reduce the overall carbon footprint of data centres thus aligning with overall sustainability goals.
      • Hydrogen fuel cells offer significant environmental benefits for data centres. Their operation produces only water as a by-product, resulting in zero greenhouse gas emissions while being operational.

• • Efficiency and reliability
    
    • • PEMFC: Known for their fast start-up and responsiveness to load changes, PEMFC cells are ideal for providing reliable backup power and efficiently managing fluctuating power demand in data centres.
      • SOFC: These cells are valued for their long-term stability and high efficiency, making them ideal for providing a constant primary power supply. Moreover, they can use different fuels, enhancing their versatility within large-scale data centre applications.

• • Energy autonomy
    
    • • Several production methods: Hydrogen can be generated from a variety of sources, including natural gas, biogas and water electrolysis. The electrolysis offers the greatest sustainability as it is fuelled by renewable energies. This flexibility in production methods improves energy security and reduces the dependency on traditional electricity grids and fossil fuels.
      • On-site fuel generation potential: Some data centres could deploy on-site hydrogen production, especially if they have access to renewable energy sources. Such capability can drastically reduce energy transport costs and losses, providing better control over energy use and costs.

Challenges associated with fuel cells used on data centres:

• • High CAPEX, Infrastructure and Installation Costs: The deployment of hydrogen fuel cells involves significant upfront costs, ranging from the cost of the fuel cells themselves to the infrastructure required for hydrogen storage and supply. Storage and Transport Challenges.

• • Infrastructure development: Hydrogen storage and transport requires specific infrastructure, which is currently under development. Developments in hydrogen technology are expected to reduce these challenges as the sector grows, thereby making hydrogen a more accessible option.

• • Safety Concerns: Like all fuels, hydrogen requires careful handling. Strict safety standards and protocols apply to ensure that hydrogen is stored and used safely, as with other fuel sources used in data centres. Limited infrastructure.

• • Lack of widespread hydrogen refuelling infrastructure: Current hydrogen refuelling infrastructure is still under development, which can pose a challenge for data centres in remote areas. Substantial investments are being made to improve this infrastructure, ensuring wider adoption and integration of hydrogen fuel cells in the data centre industry soon.

• • Technological barriers. Ongoing research and innovation: Although significant progress has been made, hydrogen fuel cell technology is still maturing. R&D continues to improve efficiency, reduce costs and improve the durability of fuel cells for widespread market use.

ECL – Recent developments and future projects

ECL, a Californian startup led by Yuval Bachar, is leading an innovative path for hydrogen-powered data centres. ECL’s approach is picking up steam among tech giants such as Microsoft, Google and Amazon, who face increasing pressure to reduce emissions while expanding the infrastructure needed to support AI workloads.

Since founded in 2021, ECL has made significant progress, securing contracts with major technology customers and planning a large-scale 1GW hydrogen-powered data centre in Texas. Scheduled for commissioning in four years, this ambitious project aims to address the growing demand for AI infrastructure, while moving towards zero-carbon solutions.

Remarkably, ECL’s plans include pipeline distribution of hydrogen, called hydroducts, which will become increasingly feasible as renewable hydrogen production increases. The use of nuclear-derived hydrogen could be a key breakthrough. Nuclear electrolysis, where reactors provide the heat and electricity needed to split water into hydrogen and oxygen, represents a promising path. Combined with hydrogen storage and pipelines, this process could provide a resilient, low-carbon energy source for data centres.

Blue hydrogen project in Virginia and Kentucky

Diversified Energy, FuelCell Energy and TESIAC recently announced a strategic partnership to address the urgent energy needs of data centres by supplying up to 360 MW of electricity across three separate locations in Virginia, West Virginia and Kentucky.

The partnership agreed to create a company focused on providing reliable, cost-effective, zero net emissions power from natural gas and captured coal mine methane (‘CMM’) to meet the growing energy demands of data centres in these states.

The collaboration between the three companies would leverage natural gas production in the basin, advanced power generation through fuel cell technology and financing of infrastructure to create a highly efficient, scalable and sustainable energy solution tailored to the growing energy capacity needs of data centres.

Natural gas (CMM), extracted from coal mines by Diversified Energy and supplied by pipeline to the fuel cells, would generate power by electrochemical conversion of methane to hydrogen and then to electricity. This non-combustion process produces almost no pollutant emissions. The heat cogenerated by the fuel cells can be exploited and converted into cooling for the data centre, thus increasing the overall efficiency of the system and further optimising its economic value. The role of each company is as follows:

• • Diversified Energy will supply natural gas and coal mine methane (CMM) or captured coal mine waste methane, which would otherwise have been emitted into the atmosphere, from its production in the Appalachian Basin as a feedstock fuel.

• • FuelCell Energy will deploy its fuel cell power platforms, offering high-efficiency, distributed baseload power generation, emissions management and thermal power solutions. This includes electricity-driven absorption cooling and waste heat, thus ensuring that data centres achieve unmatched efficiency, carbon reduction and resilience.

• • TESIAC will leverage its investment and development expertise, securing highly competitive financing options to accelerate deployment while maintaining long-term profitability and scalability.

The benefits of such a partnership are clear:

• • This unique partnership seeks to create a decentralised, high-performance and sustainable power solution to meet the demands of data centres that enable the fast growth of AI and high-performance graphics processing units.

• • Instead of relying on grid power, the model will hopefully be designed to provide on-site, continuous and scalable power generation, ensuring data centre availability also under volatile market conditions, even allowing to sell electricity back to the grid.

• • In comparison to traditional investment structures, the innovative capital structuring will aim for faster implementation and greater financial resilience.

• • Integrating captured methane, distributed fuel cells and emissions capture-ready technology reduces the customer’s carbon footprint, thereby establishing a new standard for the industry.

Google and Microsoft

Microsoft Deployment Project

Microsoft has pioneered the use of hydrogen fuel cells in data centres by successfully executing a pilot project that powered server racks for 48 consecutive hours using a hydrogen fuel cell system. Furthermore, Microsoft and Plug Power collaborated on the development of a 3 MW fuel cell pilot project designed for data centres. These tests proved not only the viability of hydrogen as a backup power source, but also its potential as a power source for data centres.

Google Pilot Projects

Google is exploring the use of hydrogen fuel cells to reduce the environmental impact of its data centres. The company has been involved in several projects to integrate hydrogen energy with its goal of achieving 24/7 carbon-free power by 2030. These include both small-scale pilots and major investments in green hydrogen technologies.

Conclusions

The global energy consumption of data centres is set at 3% of the global energy consumed, and could rise to 15% by 2030. Therefore, this technology sector must accelerate the pace of creating new innovative solutions to shift data centres involved in AI generation out of fossil fuels. Addressing current energy challenges with innovative solutions, can ensure a more sustainable and efficient future, powered by cleaner and smarter technology choices.

The benefits of using hydrogen technologies to decarbonise data centres are clear. On one hand, hydrogen power generation systems can be deployed in half the time it takes to connect a conventional data centre to the grid. On the other hand, as the hydrogen supply chain evolves to incorporate more green hydrogen (produced by renewable electricity and water electrolysis), these data centres will become true pillars of sustainable energy. And finally, by using the waste heat and water generated in the fuel cells for cooling, the electrical efficiency of these data centres as a whole will be improved.

Tech giants such as Microsoft, Google and Amazon, who face increasing pressure to reduce emissions while expanding the infrastructure needed to support AI workloads, now start to identify solutions based on hydrogen technologies. Google and Microsoft have pilot and demonstration projects up and running.

The ECL projects and the Diversified Energy-Fuel Cell Energy-TESIAC joint venture are strong examples of the US commitment to decarbonising data centres using hydrogen technologies due to their many advantages.