The conversations then led to another innovation – using natural gas to power generators instead of diesel. Diesel is the primary fuel source for generators in the datacenter environment because they provide high power capacity and output. Shifting to natural gas generators makes sense because natural gas is cleaner, less expensive than other non-renewable fuels and considerably more efficient — all important factors in a scenario where they are being used more often by a utility. But the idea needed to be tested.
Janous explains, “The traditional diesel generators we use wouldn’t have sufficed for this use. So we worked to demonstrate that newer natural gas units could meet the specs required to serve as both backup and peaking capacity for the utility, if needed. In not building a new power plant, it’s good for us and other rate payers in the region, who won’t be saddled with extra costs associated with a new plant.”
The datacenter expansion in Wyoming, he says, is “hyper-optimized for flexibility and a very fast start response, which enables our next phase, introducing more renewables into the region. The challenge of renewables is that they’re intermittent in nature. You need to have some combination of controllable load, storage or generation that can respond to the intermittency when the wind isn’t available.”
In this envisioning of the datacenter, these generators aren’t just idle assets, but resources that the grid can tap when it needs to. He says this behind-the-meter generation is a “huge step that really changes the dynamic between the customer and utility in a new and progressive way. You continue to have large-scale generation, but now you also must consider the integrations of electric vehicles, rooftop solar, small scale power generation — all down at the customer level. It’s a major shift in how the electricity grid operates.”
Chris Kilpatrick, director of rates and resource planning for Black Hills Energy, worked with Janous for nearly three years in coming up with solutions for Microsoft’s energy needs in Cheyenne.
“From a renewable perspective, this is another in the line of creative solutions that we’ve worked on with Microsoft. They are very energy savvy. They understand the energy market and are willing to look outside of the box to try to find solutions, even before the datacenter was built,” says Chris Kilpatrick. “The best example is this new tariff that is applicable for customers as long as they meet certain criteria. It’s a unique solution that leverages generation for those customers and allows them the opportunity to buy renewable energy on the market, if that’s what they choose to do.”
In regulated markets like Wyoming, companies buying power have to go through public utilities commissions that set tariff structure. This means that any new structure needs to have the buy-in from a broad coalition of customers in order to be successful. In this case, the Public Service Commission of Wyoming determined in its order that this new tariff “eliminates rate impacts and other risks for customers that are associated with the addition of large new loads while also providing additional economic development opportunities in Cheyenne.”
“When you build a renewable power plant, the utility has to build up backup capacity to meet reliability requirements,” says Michelle Patron, director for sustainability for Microsoft, who manages activities related to public policy on energy and environment and sustainability. “By coming up with this new innovative arrangement, the utility no longer has to invest in a power plant because they can use our backup power.”
“The intent is to mitigate Microsoft’s need to use the backup generation, while ensuring valuable capacity on the ground so Microsoft can continue its datacenter operations, which is very critical to their needs,” Kilpatrick says. “It also allows the other customers of Black Hills Energy the use of Cheyenne’s utility generating assets, independent of each other.”
Microsoft’s willingness and openness to look at options that don’t fall under traditional utility thinking made all the difference, Kilpatrick says. Not being afraid to try something new has been very helpful.
Patron says these kinds of “proof of concept” solutions help shape public policy moving forward, which in regulated electricity markets are made of tariff arrangements at the state level. This model could bring more renewable energy online.
“For the first time, we have a holistic solution to maintain reliability on the grid and at the same time, create an environment to allow for more intermittent renewable energy,” says Janous. “It’s really solving both sides of the equation at one time. The traditional mindset in the industry is that we build datacenters with backup generation. The result is a less-than-optimal solution for both the datacenter and the grid. At Microsoft, we recognize that we’re building power plants that happen to have datacenters next to them. And that changes everything.”
Find out more at Microsoft on the Issues.
Lead image: Microsoft’s datacenter in Cheyenne, Wyoming.
