RECs’ reckoning
> Can a new approach make RECs actually work?
In search of wind
> Wind turbines face growing pains
A tidal wave of regulations
> Don’t expect the future to be plain sailing
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The transition to renewable energy is a crucial part of the globe's move to netzero emissions, and the data center sector is playing its part.
But any initiative has to work within certain immutable laws. These include the rules of the financial markets, the regulations imposed by government and, underneath all the rest of these rules, the basic laws of physics.
It's scientific laws that made it clear that this transitional journey was necessary in the first place. Too much CO2 in the atmosphere equals too much global heating.
So, we make no apology that this Grid and Energy supplement is all about rules.
It's often been observed that limitations and restrictions can actually drive the most creative actions - and we hope that's true for the world.
For some years now the infrastructure sector has moved towards getting renewable energy by ever-more direct routes. Measures like PPAs (power purchase agreements) can inject new power into the grid, and even directly to data centers.
But at the same time, the communities that have the most desperate need for clean power are thousands of miles away from those facilities.
A new financial instrument called the D-REC turns conventional green power strategies upside down to address this. But can it really deliver what it promises? (p4).
Wind turbines have been playing an ever-greater role in providing the renewable energy that the world needs in order to decarbonize society.
Turbines have been built in ever-increasing numbers, while the turbines themselves have been getting larger, because of the laws of physics. Bigger towers create more power.
But beyond a certain point, land-based towers cannot get any taller - while offshore wind turbines face a bottleneck in delivering their power to land.
These physical restrictions are inspiring creative solutions (p10).
Finally, political regulations are almost always the final arbiter for potential projects. Like every other part of society, the data center sector is facing a massive increase in rules designed to curb emissions and stave off disaster.
The industry may initially resent this intrusion into its previouslyuntrammeled activities, but there will be benefits (p14).
Top-down regulations from the EU will ensure that data centers begin to move on from partiallysuccessful initiatives such as PUE, and create proper consensus on new ways to grade and report success in this field.
The European Union's new directives put an emphasis on reporting. It's now up to the industry to respond constructively, to make sure that the practical enactments of the Green Deal are workable and meet the need.
Once more, we can hope that rules will drive a creative response.
Can
If you are sourcing renewable energy for your data center, the accepted wisdom is that it is best to do it as locally as possible, so you are paying for renewable electricity that is generated on your grid, and (as near as possible) consumed at your site.
We kick the tires on a new kind of REC
But there’s a new scheme that takes almost the exact opposite approach - paying for electricity which is generated on the other side of the world, and may even be completely off-grid.
you reach net-zero while helping to provide clean power where the world needs it most?
Renewable energy certificates (RECs) are an offset arrangement, intended to allow large users to support renewable energy generation, even if they can’t buy renewable energy locally.
Each REC represents 1MWh of renewable energy. If a user buys 1MWh of renewable energy, they also get the REC and “retire” it, putting it towards their claims to use renewable energy.
If the user can’t get renewable energy locally, they buy an “unbundled” REC. They pay their regular grid provider for the energy they actually used, and an additional fee to a renewable energy provider somewhere else.
“The REC was a natural instrument to use for accounting,” says Ricky Buch, CTO of Powertrust, a producer of advance REC schemes. “Because it had been established and proven in the utility compliance market, we saw an expansion of unbundled certificates, because companies wanted to make verifiable claims.”
However, unbundled RECs have been criticized by renewable energy analysts who say they are little more than greenwashing, allowing corporations to falsely inflate their green energy figures, while doing very little to promote actual green energy usage.
Their prices are very low compared to the underlying energy price: electricity in the US costs about $150/MWh (EIA). The price of unbundled RECs has been as low as $1 per MWh (US EPA), but has increased somewhat since then. This low price reflects their low value as a driver of decarbonization.
Buch takes the criticism of unbundled RECs on board: “A lot of the projects that are generating these RECs are 50 or 60 years old. The investors have already made the returns.”
Analyst David Mytton wants the industry to rely less on unbundled RECs: “Most data center sustainability strategies still focus on renewable energy certificates (RECs),” he said in a DCD article in 2021. “RECs are now considered to be low-quality products because they cannot credibly be used to back claims of 100 percent renewable energy use.
Mytton’s advice is as follows: “To avoid accusations of greenwashing, data center operators must consider investing in a portfolio of renewable energy products. RECs may play a part, but power purchase
agreements (PPAs) are becoming more popular, even though there can be financial risks involved.”
These PPAs fund renewable power directly, by effectively paying for whole projects like solar farms and wind projects. The renewable power, and the REC associated with it, are bundled together.
“In the PPA they get the electricity and they get the REC,” says Buch. “You need the REC to actually make the claim.”
The most highly-regarded PPAs actually fund projects so close to the tech company that it is possible to envisage the actual energy going directly from the solar plant to the data center.
Despite the growing criticism of RECs, and the move to PPAs, a new approach has emerged which goes in the opposite direction, taking the much-criticized unbundled nature of RECs, and turning it into a virtue.
What if RECs could be created which were even more unbundled? So unbundled, in fact, that they could support renewable energy projects on the other side of the world?
RECs that did this could address a pressing world problem - the shortage of clean reliable power in developing communities.
More than 750 million people still lack basic electricity, according to The World Bank, and two billion more have unreliable electricity supplies, in areas such as Brazil, India, sub-Saharan Africa, and Southeast Asia.
Access to affordable clean energy for all is one of the UN's 17 development goals: the UN wants to see “access to affordable, reliable, sustainable and modern energy for all.”
While tech firms are funding large solar farms in the rich world, developing agencies are struggling to get funds for small projects that are desperately needed.
These might include solar microgrids in remote communities on the Amazon river in Brazil, or storage systems to enable solar panels to power demands in hospitals and schools.
There are many places where there is currently no electricity supply, or else electricity is derived from dirty sources such as diesel generators.
But providing clean energy is an uphill
struggle, because such electricity projects are hard to finance alongside immediate issues such as drought and famine.
Renewable energy projects in needy areas are usually on a small scale, and often off the grid, so it is hard to route funds to them, and many communities are forced to continue using polluting, climate-harming fossil fuels.
Distributed RECs (D-RECs) are designed to aggregate the benefits of small renewable energy projects, and monetize them so that Western corporations can put in large amounts of investment, that will count towards their net-zero goals.
The idea was created in around 2020 by Ricky Buch and colleagues at Powertrust, and project developer South Pole. Buch explains: “We had experience in the renewable energy space [in developing nations]. But it's very difficult to actually finance these projects. And we had also seen that there was phenomenal growth in renewable development that was driven by corporate voluntary procurement.”
But the development wasn’t going where it was most needed: ”These companies were establishing Net Zero targets, or 100 percent renewable energy targets. That led to to massive growth and development. Last year, some 36GW of new capacity was contracted by corporates. But 90 to 95 percent of that is concentrated in the US and in Europe.”
He goes on: “We saw there was a massive need for investment in renewable energy, especially in emerging markets. But the mechanisms that corporates are using to increase capacity and really hadn't filtered down to those markets. The way the environmental markets are designed, they're really catering towards utility-scale projects.”
In many countries, PPAs simply can’t be done, says Buch: “In a lot of emerging markets, you cannot actually structure a bilateral agreement like that. It has to go through the utility. You can get a green tariff, but a PPA is not a very common instrument in emerging markets.”
Powertrust was set up to address the issue, but Buch and colleagues quickly realized they needed a bridge between the capital markets and projects in emerging markets, which tended to be smaller than those in the developed world: “We realized we couldn't just sell certificates, we needed to ensure that there were
frameworks in place that corporates can use to reliably account for the certificates that they would purchase.”
The D-REC initiative worked with existing sustainability accounting standards, to extend them: “In particular, to allow for the participation of small scale projects, which up to this point has been quite challenging.”
The difficulty of aggregating and certifying multiple small-scale projects had more or less excluded emerging countries from corporate purchasing. D-RECs aim to solve this with a back-end which automates a distributed network of projects.
The idea was formally launched in December 2022 with the D-REC Initiative set up as a Swiss-based not-for-profit. The idea has been backed by organizations including the Shell Foundation, Microsoft, and the UK's Foreign, Commonwealth, and Development Office.
“You're still getting a REC that indicates power has been generated by a zero carbon source,” says Buch. “But you also have data to say that that particular distributed asset was powering a hospital or school, or was supporting other UN Sustainable Development Goals in addition to seven and 13, which are the energy-focused ones.”
Solar plants are an asset which can either be owned by the developer that built them, or by a holding company, which contracts with the customer, which might be a large hospital. The hospital buys its power from the owner of the asset, often with a PPA, Buch explains.
“So the hospital is paying for electricity. But on top of that, there is this additional revenue stream that comes from the REC, which is owned by whoever owns the asset,” he says. “We buy from whomever owns that REC.”
Because of the finance, the owner of the solar plant is able to offer electricity to the hospital for a lower price, he says. “The developer who may have charged X for that electricity is now charging X minus something, because of the
additional revenue, which can make the project financially viable and allows them to offer a reduced rate to the hospital.”
D-RECs are powered by a distributed ledger system, that works like a “central bank,” tracking the generation of energy in small-scale projects, and the incoming funds. It’s based on blockchain, says Buch, but relies on proof of authority, not proof of work, so it doesn’t suffer from the insatiable energy demands of cryptocurrencies like Bitcoin.
As with RECs, one unit of energy (1kWh in this case) qualifies for one D-REC. The D-REC scheme aggregates generated energy to issue D-RECs, and retires D-RECs when they are paid for by investors.
The scheme tracks generation data in near real-time, from potentially hundreds of thousands of sources. The data is aggregated and validated automatically.
“We worked closely with the Energy Web Foundation, which is a nonprofit that is focused on using distributed ledger technology for the energy space,” says Buch. “One of the applications that they have focused on is renewable energy.”
To deliver a traceable system, D-RECs are based on a distributed ledger system for acquiring, verifying and tracking renewable energy data from distributed assets.
Cryptocurrencies like Bitcoin use blockchain, but apply a “proof of work” validation mechanism, which wastes energy, says Buch: “Energy Web uses a proof of authority validation mechanism and so it is much less much less energy intensive than proof of work.”
“In this new market, the transaction goes like this: a DRE developer builds a small, renewable energy installation, like a mini-grid,” says a blog by EnAccess, a firm that helped develop the D-REC platform.
“The mini-grid produces electricity. One MWh of this electricity is equal to one D-REC. This D-REC is then purchased
by a corporation thousands of miles away from where the electricity is generated. Each D-REC is unique and can only be sold once, and then canceled.”
But what does the D-REC actually pay for? According to EnAccess, it is slightly different from the carbon market, which monetizes the value of emissions reductions: “The key difference is that D-RECs monetize the environmental attributes of the renewable energy produced rather than emissions avoided.”
According to EnAccess, D-RECs put a price tag on positive benefits from a project, including health benefits, and the economic boost for low-income families, alongside their carbon emission reductions: “The D-REC simply broadens the scope of this existing mechanism.”
As EnAccess says “This data could come from thousands, or potentially hundreds of thousands of sources. Data could be fed to the platform from sources like a mini-grid in Uganda or PV panels in India, and thousands of other small-scale installations around the globe. D-REC data is too difficult to be handled and verified manually, and will rely on automated data processing.”
EnAccess says the backend will be trusted because it is built on a proven open-source platform: “The D-REC initiative builds on data analysis origin module code for environmental attribute tracking, developed by the Energy Web Foundation.”
“Trust in the system that verifies the data and issues the certificates is absolutely vital,” says EnAccess: “Not only is the platform being built on existing, proven technology for measuring and verifying energy generation data, but the entire concept and governance of D-RECs will be built with open source principles too.”
The goal of the D-REC scheme is to “assist leading global corporations and climate investors by providing access to new renewable energy investment opportunities in emerging markets.”
So the proof of the idea will be if large corporations can be persuaded to buy D-RECs in large enough numbers to finance significant energy projects where they are needed.
A number of big corporations have been sponsoring and fostering the development of D-RECs, including Shell and Microsoft, but the first to step up and pay money was Salesforce.
Salesforce plans to buy a total of 280GWh of D-RECs over eight years, making it the first to endorse the concept with actual money.
At this stage, Salesforce’s purchase is small compared to its total energy needs, and also to its purchase of renewable energy.
The company announced in 2022 that it was using 100 percent renewable energy - which means in 2022 alone, it bought 800GWh of renewable energy, through multiple PPAs and other instruments
Its D-REC purchase will only match a few percent of that: “It's 35GWh per year for eight years,” says Buch. “That roughly translates into something like, 25-35MW of new capacity.”
But Salesforce says this is a significant move to get renewable energy investment where it is most needed.
“Nearly 95 percent of corporate renewable energy purchases today take place in North America and Europe. We need to ensure the rest of the world isn’t left behind,” said Megan Lorenzen, who leads power sector decarbonization for Salesforce.
“Salesforce was instrumental in the development of this high-impact procurement approach,” said Nick Fedorkiw, CEO of Powertrust, the energy procurement service which negotiated Salesforce’s D-REC purchase.
“However, the impact of this commitment goes far beyond Salesforce’s purchase. Companies across the globe have an appetite for high-impact renewable energy purchases and can’t find the supply they need. Now, as proven by Salesforce, companies can open up new sources of supply while maximizing social impact.”
As with standard, unbundled RECs, the real value of the D-REC will depend on the financing of it. Buch believes that there are several factors in the underpinnings of D-RECs which make them credible
compared with some other RECs.
“There is a spectrum of quality in the certificate market, just as there is in the carbon space,” he says. “Globally in the REC market, you go from a few dollars per megawatt hour to over $100/MWh, or close to $200/MWh.”
Green energy experts will want to evidence that the D-RECs are solid enough to fund new renewable power, and part of that will be the price. “The key question is additionality, which is what makes PPAs more expensive vs unbundled RECs,” says Mytton.
If price is a good indicator, it’s a tough one to get hold of, because, as Buch points out D-RECs are a traded commodity like other kinds of REC, and have only just been launched. Salesforce’s announcement did not specify the price it paid for its D-RECs.
Pressed by DCD, Buch indicated that in some contracts the REC revenue stream can be as much as 10-15 percent of the total project revenue, which has a valuemultiplier when you factor in the cachet of getting US currency upfront.
“The majority of the money is still coming in from charging the off-taker for electricity. But the costs are borne in US dollars, while the revenues are earned in local currency. A US-dollar denominated, stable revenue stream helps a lot, and that 10 percent could be worth more if there is a local currency devaluation for example.”
In other words, D-RECs are, as the beer adverts used to say, reassuringly expensive.
Buch also argues that the money is definitely creating additionality. Unlike the much-criticized unbundled RECs offered by US utilities, D-RECs are “forward” contracts. That means that money given for the D-REC is invested in a project which is then built.
“When a corporate engages with us, we essentially then turn around and use the REC contract to build new capacity,” he says. “So there is further decarbonization happening that wouldn't have otherwise. Because we're coming in with a new revenue stream for project developers, you're basically supporting projects that have not yet been built. And then you do have a much stronger claim around additionality.”
D-RECs provide the up-front capital needed for new projects, says Buch, And they provide it in the form that the projects need - US dollars: “The agreement with Salesforce is a multi-year contract at a fixed price denominated
in US dollars. That is a guarantee that a developer can take to the financiers to actually get capital to build projects. And it is a stable revenue stream that's backed by a blue-chip company. That’s what these developers often need.”
With such a new approach, there are still many issues to assess on D-RECs.
Some people we spoke to were skeptical about the system behind the scheme, and whether it can provide enough auditing and accountability, with an essentially automated marketplace.
Abstracting and aggregating multiple projects in different countries might actually just mask corruption and poor delivery, so D-RECs will probably need to backed by physical inspections, analyst Andy Lawrence of Uptime Institute suggested: “They may need boots on the ground.”
D-RECs certainly present a novel approach and are attacking a real problem.
If there’s proof that they are creating additional clean power where it is needed, then they may be a way to reclaim RECs as more than just an easy way for large corporations to claim virtue, while doing little to make real change in the world.
Salesforce provided a list of some projects that could be receiving funds from its D-REC investment.
Brazil : Replacing old diesel generators with a solar-powered microgrid for a remote community of 1,000 along the Amazon River, reducing fuel consumption by more than 50 percent.
India : A solar-powered microgrid brings electricity to an isolated mountain community in Nagaland for the first time.
Sub-Saharan Afric a : A solar and storage installation at a hospital, powering ventilators, organ support equipment, and operating rooms.
Southeast Asia : A solar microgrid in Borneo, Malaysia, paired with a micro-hydro installation for reliability.
Brad Wilson Vice President, Technology
Today, there’s more than 18 million servers running in more than 2,500 data centers all across the globe to support everything from our global economy to our increasingly remote workforce. As we continue to see more demand for e-commerce, artificial intelligence, streaming video, virtual reality/ augmented reality applications, smart systems, and Big Data analytics, we can expect these numbers to climb drastically. This unprecedented demand for digital services has made the case that data centers have become as essential as public utilities such as electricity, gas and water.
While there’s little debate whether data centers hold a critical place in our society, we cannot ignore their impact on resource consumption and energy use. For data center operators, owners, and designers looking to reduce their carbon footprint or set higher efficiency and sustainability goals, Vertiv launched its Data Center Guide to Sustainability, which offers a number of best practices, business cases for reducing environmental impact, and emerging technologies to help the industry advance toward “net zero” operations. Below are some of the highlights from the guide.
In 2020 alone, data centers consumed between 200 and 250 terawatt-hours (TWh) of electricity, or nearly 1% of global electricity demand, and contributed 0.3% of all global carbon dioxide (CO2) emissions. That same year, data centers in the United States used an estimated 174 billion gallons of water These numbers surrounding data center consumption have drawn concerns from both industry stakeholders and the general public.
Many data center owners and operators have already launched initiatives to improve efficiency and sustainability, but there is much work left to be done. This industry-wide movement has been led primarily by large hyperscalers who have set ambitious goals to become carbon neutral or carbon negative. Apple and Google Cloud have achieved net zero carbon; Amazon intends to do so by 2040; and Microsoft intends to become carbon negative by 2030. In China, technology companies Chindata, Alibaba, Tencent, GDS, and Baidu are all making progress on reducing carbon from data center operations.
The enormous demand for data center capacity and increased technology dependence poses a difficult challenge for organizations trying to reduce emissions. However, by implementing technologies
and strategies for reducing environmental impact, organizations can lower operating costs, increase financial flexibility, and reduce the risk of having stranded or obsolete assets. Read more about the challenges and opportunities.
In recent years, our industry has introduced several innovations designed to help data center operators increase asset utilization, maximize efficiency, and reduce emissions and water consumption. Below is an overview of some of those technologies, according to the guide:
• Intelligent Power Management: Intelligent equipment and new controls enable data center operators to improve the utilization and efficiency of the critical power systems required to achieve high levels of data center availability. One strategy we’re seeing used by organizations is utilizing the overload capacity designed into some UPS systems to handle short and infrequent demand peaks rather than oversizing equipment based on these peaks.
• Renewable Energy: Renewable energy can be a great tool for reducing carbon emissions. There are numerous ways to leverage renewable sources, including purchase plan agreements, renewable energy certificates, and migrating loads to cloud or colocation facilities that have made the commitment to carbon-free operation. Some operators are looking at opportunities to power data centers through locally generated renewable power, which can be accomplished by matching renewable energy sources with fuel cells, systems that can produce clean hydrogen from renewable energy, and UPS systems with dynamic grid support capabilities
For organizations in the initial stages of planning long-term efficiency and sustainability goals, beginning such a journey can be daunting. Fortunately, Vertiv’s guide offers valuable first steps for reducing environmental impact, including:
• Establishing Goals: Similar to the previously mentioned hyperscalers, more data center operators are embracing goals based on the vision of the net zero data center or adopting several of the pillars that make up that vision. According to Vertiv’s guide, a net zero data center typically encompasses:
• Zero losses: Eliminating inefficiencies and maximizing utilization in data center systems.
• Zero carbon: Eliminating carbon emissions from the power consumed by data centers.
• Zero water waste: Eliminating the waste of water for data center operation.
• Zero waste: Eliminating the e-waste created by data center operations.
• Defining Frameworks and Metrics: When establishing measurable goals for reducing environmental impact, emissions will often be the primary target. The Greenhouse Gas Protocol provides standardized global frameworks that industry organizations and their value chain partners can use to understand, aggregate, quantify and reduce emissions. Other metrics organizations can use to track sustainability goals include airflow efficiency, air economizer utilization factor, carbon dioxide savings, and carbon usage effectiveness. Find more metrics and frameworks online.
• Prioritizing Opportunities: Organizations looking to build out their sustainability approach can begin by evaluating existing data center systems and prioritizing opportunities based on goals and available technologies. As plans move forward, operators should continue to prioritize solutions that can achieve desired levels of continuity. Some priorities to consider include increasing asset utilization, decreasing data center water usage, reusing data center heat, and reducing e-waste.
The path toward a more sustainable data center is not paved by a single strategy or piece of technology and implementing these changes will be no easy feat for most organizations. However, the reduced costs, progress toward corporate goals, limited dependence on utilities, and lessened environmental impact from these initiatives can help create significant long-term value for an organization.
Read Vertiv’s Guide to Data Center Sustainability in its entirety to learn more.
In our race to get off of fossil fuels, sunshine and wind have proven to be our best chance of harnessing renewable energy and providing clean power.
Solar panel efficiency has soared massively, allowing more power to be harvested from less land. With wind turbines, huge improvements have also been found - mainly by becoming huge.
Put simply, there are two key factors to bear in mind. First is the speed of the
wind: power potential increases with the cube of wind speed, so doubling the speed increases power by a factor of eight. Then there's the size of the turbine blades, where double the diameter increase available power by a factor of four.
Building larger turbines takes advantage of both of these circumstances. By going higher, you generally get access to higher wind speeds, and you have more space to build the enormous blades that take advantage of those winds.
In numbers, a 57m high wind turbine can generate about 1MW, while a 95m turbine can generate 3MW, according to the Department of Energy. A 120m high turbine can generate 17MW.
This basic concept has led the direction of the wind turbine industry for the last three and a half decades, notes Shashi Barla, the head of analysis and intelligence at renewable energy advisory Brinckmann. "That has been the drive all these years, because the larger the turbine, the higher the energy yield."
Wind turbines are getting larger, but so are the challenges of deploying them
There is a problem, though. As you go higher, things get complicated.
Let’s start with on-shore wind turbines. First, there is a simple cost issue: for years the economics have been in favor of growth, but current designs are reaching a point where the excess metal and infrastructure to support larger turbines could cost more than they are worth. A 2022 study found that 120m was the optimal height on modern turbines, before the extra investment didn’t make sense.
Then there’s the basic challenge of getting the component parts from the factory to their site. A giant blade or turbine tower simply cannot wend its way through underpasses, across bridges, and around highways, putting a fundamental limit on the turbine’s hub height - the distance from the turbine platform to the rotor of an installed wind turbine.
“The biggest challenge is logistics, by far,” Barla said. “For onshore we have almost reached stagnation. In the last four years or so, for the first time in the wind industry, new turbine product introductions have slowed down significantly.”
On-shore turbines in the US, have reached as high as 94m, but would struggle to achieve this.
The DOE’s Wind Energy Technologies Office hopes to help solve the issue, working with turbine companies to make the machines more modular, and is trying to see if it is possible to construct parts on-site - all while dramatically increasing the number of turbines dotted across the country.
“When we look at the United States, one of the things we are really interested in is deploying a lot more wind to meet the Biden-Harris administration’s decarbonization goals. And to do so we’ll need five to ten times more deployment than we have today, so a lot more turbines,” DOE wind turbine program manager Mike Derby said.
“Then there is the economic value to the country we are looking at as well. We would like to manufacture these turbines locally in the United States, so we are looking at innovation for longer and larger blades and how we get that manufacturing to come back to the United States.”
Earlier this year, a potentially transformative project began to take shape in Texas.
Partnering with GE, Keystone Tower Systems took tech borrowed from
pipemaking to develop a spiral-welded wind turbine tower. Essentially it takes a huge steel sheet and rolls it into a tower on-site.
This solves the transportation issue (at least for the tower, not the blades), allowing for turbines to grow larger. When it received a $5 million grant from the DOE in 2019, Keystone said it believed the method would allow it to produce towers with more than 7m diameters, allowing for hub heights of 180m and beyond.
In late February this year, Keystone built the first of such towers. Coming in at 89m, it is already at the upper limit of US land-based turbines. Certified for a 40year lifetime, the tower is currently seen as a simple replacement for GE's standard towers, and features GE's 2.8-127 turbine.
But the hope is that future towers will be larger and, crucially, cheaper. A National Renewable Energy Laboratory (NREL) study in 2019 found that around
Alongside the effort, GE Renewables is experimenting with 3D printing to create customizable tower bases. The DOE has also launched the Big Adaptive Rotor (BAR) project, exploring flexible blades that could stretch 206m in diameter and be easier to transport as they could bend by 13° during the journey.
That would increase capacity factors by 10 percent or more over a typical land-based turbine, the DOE believesequivalent to a single average turbine powering another 280 homes.
Flexibility brings its own issues, though. Even without BAR, as blades get longer, they tend to be more flexible, and it is more challenging to control them and mitigate loads so that you get the expected power.
There is also a shortage of cranes that are large enough to keep up with the growth of turbines, and keep pace with any height increases. This supply chain constraint has yet to be resolved in the US.
Across the world, permitting is another issue. "A major stumbling block is project permitting," Barla said. "Take a market like France, where you could spend about seven years in permitting an onshore wind project. And in that seven years, if you look at the technology, turbines will have completed two technology revolutions."
By the time the project gets a permit, the turbines it was designed around may no longer exist. Companies can apply for a fresh permit for newer, taller, and more efficient turbines, but that risks adding more time to the permitting stage.
"If they don't want to invest an additional two years to that, then they would restrict the project size based on the previous technical configuration," meaning a less cost-effective wind farm, he explained.
half the Levelized Cost of Energy (LCoE) of a wind farm came from the cost of the wind turbine, with around 10.3 percent of costs represented by the tower.
With traditional designs, the taller the turbine, the more money proportionally that goes into the tower - the capex of a 110m tower is about 20 percent of the overall project. Add another 40m and it jumps to 29 percent.
Cylindrical towers rolled on-site could fix that, if Keystone can scale up its efforts across the country. It claims that it can make the towers 10 times faster than a traditional factory, and with 80 percent less manpower.
The good news is that European governments are aware that this is a highly flawed strategy, and have promised to cut down permitting timelines significantlya small positive outcome from the energy crisis caused by Russia's invasion of Ukraine.
Another government restriction is on tip height, the overall peak height of a turbine including blades.
Ireland is hoping to massively increase its reliance on wind turbines, but the country has put in restrictions based on tip height to protect local communities.
In late 2019, the country expanded
upon its 2006 noise standards to rule that wind turbines will have to be set back, with at least four times the tip height between a wind turbine and the nearest dwelling, and a mandatory minimum distance of 500m.
That means that a 180m wind turbine will have to be at least 720m from the nearest dwelling. Turbines also have to be kept away from roads and railways, by a distance equal to the tip height plus 10 percent. These and other tip height restrictions mean turbines have limited locations, or have to compromise on height.
"Because of those tip height restrictions, you will not be able to deploy the latest generation technologies in those markets," Barla said. "And so, as a consequence, your ability to lower the cost will also be constrained."
Things get a little easier out to sea. No one lives nearby, and you don’t have to squeeze under an overpass to deliver the turbine.
This has allowed offshore wind turbines to grow rapidly.
"The height of offshore wind turbines is quite a bit higher than land-based wind," the DOE's technology manager for offshore wind R&D, Nathan McKenzie, explained.
The next step in offshore wind is to deploy turbines that have a capacity of 15MW. For comparison, the average offshore turbine size installed in 2020 was around 8MW, which is beyond the practical limits for most land-based turbines.
With this and other advancements, consultancy McKinsey believes that the levelized cost of wind-generated electricity could fall from around €150 ($159) per megawatt-hour (MWh) in 2015 to less than €50 ($53) per MWh by around 2024, a dramatic improvement.
At the same time, the company notes that the global installed offshore wind capacity is expected to grow from 40GW in 2020 to 630GW by 2050.
But, as with cranes on land, there are critical bottlenecks in construction that
could thwart a rapid buildout. “Installing offshore wind farms relies on wind turbine installation vessels (WIV), which anchor to the sea floor, but there are not many of these vessels in the world,” the DOE’s McKenzie said. “Currently, there are 16 wind turbine installation vessels active in Europe and only two can handle 15MW turbines.”
Again, there are those hoping to innovate our way out of the problem. Maersk Supply Service has designed a new WIV which would be stationed permanently at a wind farm to carry out successive installations.
Built by SembCorp Marine, the WIV is expected to be delivered to US waters in 2025 by Kirby Offshore Wind. The partners hope the new design can cut installation costs by 30 percent, and increase the supply of WIVs.
The new vessel will be used by Equinor and bp for the installation of US offshore wind farms Empire 1 (816MW) and 2 (1,260MW) and Beacon Wind (1.2GW).
Should such supply chain problems be solved, other issues can arise in high winds. The problem is, we don’t exactly know what they are.
“We need to have wind assessment resource campaigns that go higher into the atmosphere, so we know exactly what we are putting the turbines into,” McKenzie said.
“We just redeployed a buoy off of Hawaii, and have the Wind Forecast Improvement Project,” all aimed at improving our understanding of what exactly happens in the skies above.
“As offshore wind blades are 100 meters plus in size, you start to get into aerodynamic phenomena that we don’t see in smaller scales,” McKenzie added. “So we are focused on understanding those particular aerodynamic regimes.”
Data will prove a huge help, as will computers. “With larger capacity turbines, you have to fully test these out before they go to sea,” McKenzie said.
“We see a huge benefit to increasing our capability to numerically test, with better desktop models that can fully analyze these turbines prior to bringing
them out to sea.”
Even with these advances and a concerted effort, it’s possible that wind turbines’ ever-growing heights will start to slow, both at sea and on land.
That may not necessarily be a bad thing.
"In the last three and a half decades, the primary evolution was increasing the size," Barla said. "There are a plethora of innovations that are happening within the turbine, but that's been the drive all these years."
With larger turbines no longer a reliable easy win, Barla hopes that we will see a flurry of innovation in a number of other areas.
"About six years ago, Vestas came up with a multi-rotor technology, which is by far one of the biggest innovations in the market," he said. It was unable to get traction at the time, but now China (which it should be noted has been able to build bigger on land and at sea than everywhere else) has begun to try to replicate the technology.
Chinese company Mingyang offers the world's largest onshore wind turbine at 8.5MW (soon to be bested by a 10MW system from local rival Envision Energy) But it is now experimenting with a twin rotor design, Barla said. They are also looking at downwind machines, that have the rotor placed on the lee side of the tower.
Over in Europe, another frontier is what to do with all this electricity, generated miles off shore, possibly at times when demand is low.
Instead of transmitting the energy to land over potentially lossy and expensive cables, companies are investigating converting into other forms on-site out at sea. Siemens is testing integrating hydrogen electrolyzers within offshore wind turbines.
Meanwhile, Vestas is looking at it putting electrolyzers onshore. Both proposals could prove critical in the development of green hydrogen.
"That's the innovation coming out beyond just increasing the size," said Barla
Pressure is building on the data center industry in Europe, and it is arriving in the form of standards and regulations.
With the EU either proposing, discussing, or introducing a plethora of regulations that will have either a direct or indirect impact on the data center industry, it is more important than ever that for the industry to discussing how to address them - as an industry and not as individual companies.
The coming regulations are primarily sustainability-focused, but they are coming from all angles.
There is the Corporate Social Responsibility Directive (CSRD), which will require companies to report on the environment-related risks they face.
According to the directive, this will include ‘reporting on social and environmental factors with a view to identifying sustainability risks and increasing investor and consumer trust.’ The directive also prompts companies to report on diversity, and ‘social and employee-related matters, respect for human rights, anti-corruption, and bribery matters,’ among others.
Beyond this, there is also the EU sustainability taxonomy that came into force in 2020, ranking investments based on six different objectives: climate change mitigation, climate change adaptation, the circular economy, pollution, the effect on water, and biodiversity.
By embedding environmental impacts into financial reporting, these regulations effectively require data center providers to investigate their environmental impact from their customers’ perspective.
At the same time, several other new regulations are impacting them more directly: through energy efficiency.
With its Green Deal proposal in 2020, the EU raised its ambition on reducing greenhouse gas emissions to at least 55 percent below 1990 levels by 2030, as a way to transition the continent to new sustainable economics.
In this setting, the 2021 EU Energy Efficiency Directive (EED) is no surprise.
The directive sets energy efficiency targets for multiple sectors - and addresses the data center industry by name, removing any ambiguity.
“Another important sector to which increasing attention is being paid is the information and communications technology (ICT) sector, which is responsible for five to nine percent of the world's total electricity use and more than two percent of all emissions,” says the Directive.
“In 2018, the energy consumption of data centers in the Union was 76.8TWh. This is expected to rise to 98.5TWh by 2030, a 28 percent increase. This increase in absolute terms can as well be seen in relative terms: within the EU, data centers accounted for 2.7 percent of electricity demand in 2018 and will reach 3.21 percent by 2030, if development continues on the current trajectory.”
In other words, the pressure is no longer just building, it is well and truly on.
“I think about 10 years ago, we started to see the Environment Agency in the UK suddenly ask, ‘data centers… are they supposed to have permits?” said Leigh Lloyd, sustainability director at Yondr Group, during a DCD panel
“There is now a tsunami of regulation coming at all industries because it's not just data centers. It goes beyond environmental data and into diversity and gender and social value,” said Lloyd.
For him, the key factor is measurement: “It's all about metrics, and I think that is going to be the thing that we need to pull together on and try to help each other understand what the best metrics are so that we can all be reporting on a level playing field.”
In the past, data centers escaped the
It's all about metrics, and I think that is going to be the thing that we need to pull together on and try to help each other understand what the best metrics are so that we can all be reporting on a level playing field.
> Leigh Lloyd Yondr
attention of regulators, but that time is over.
There is a danger of confusion, however, in the sudden abundance of regulations. Without a set way of collating and measuring the data, operators could see several data requests for the same information but in different forms.
The sheer workload this will create for data centers, ironically, isn’t very sustainable.
But agreeing on metrics is easier said than done. We are all familiar with PUE and WUE, for measuring how efficiently data centers use power and water, but these measurements just aren’t cutting it anymore.
Marc Garner, a VP at Schneider Electric's UK Secure Power Division, told DCD that he is hopeful, but he doesn’t think the metrics are there yet.
“It feels like we’re a way off from [agreeing on metrics] at the momentbecause there are so many different inputs and so many different ways of measuring energy,” he said.
He wants to bring the industry together to get a broad industry consensus and understand the challenge of the topic of measurement: “There are probably four or five different measurements, things like PUE, which will feed into overall measurements from an industry
perspective. But [PUE] shouldn't be the only one, or the only one that we talk about.”
The geographical and climatic diversity of the EU is also an important issue when it comes to agreeing upon sustainability metrics. From the south coast of Greece to the top edge of Norway, with vastly different temperatures, rainfall, and other natural features, there are no one-size fits all sustainability approaches that can be used continent-wide.
This is an issue that Michael Winterson, managing director at Equinix touched on during the same DCD sustainability regulation panel.
“We use water to cool our data centers,” said Winterson, “because in many of the countries we operate in, we're not allowed to use chlorofluorocarbons and other forms of greenhouse gases in our cooling
systems. So we use evaporative cooling. It's cheap, it's massively efficient, and it's helped us reduce our PUE. Now all of a sudden we're seeing press articles about the amount of water we're consuming as an industry.
“We've got to start looking contextually. There are some cities where we are water constrained, and we're going to have to move back away from evaporative cooling towards some other technology. But this might not be relevant in Norway.”
Without this context, we risk not only delaying meeting sustainability goals, but also contributing to the very PR crisis that this issue is causing. Data centers are widely seen as a succubus upon the climate and the grid - and this is an image the EU agrees with.
Winterson broke down the issue: “Contextually, think about tobacco versus alcohol. Every one of us immediately sees that tobacco equals death, and alcohol equals fun. In reality, both of them are perfectly legal drug delivery mechanisms.
“Which industry is suffering under horrible regulations? And which industry is regulated, but doing well with regulations? Do you want to be the tobacco industry? Because that's where we're going today. Our failure to communicate is going to take us straight down the tobacco route. We will be the pariah of the technology industry, even though we don't deserve it. We are the support. We're the foundation of the industry, but we're fast going down this route.”
This is where opacity has long been harming the industry, and regulated reporting could at the very least enable the data center industry to show the progress it is making toward sustainability.
The industry must deal with the regulation issue and work its way through it. But until there is an agreement on a set of metrics, it is unlikely that this problem is going to untangle itself any time soon.
So, when are we going to have a mafiastyle sit-down, and make a decision? It had better be sooner than later.
