Press Release: Panel Explores Benefits of Combined Heat and Power for Data Centers

May 17, 2023


May 17, 2023 (Washington, D.C.) — Combined heat and power is a highly efficient and reliable technology that can help data centers satisfy their massive energy needs in both the short- and long-term, said panelists at a webinar hosted by the CHP Alliance.

On Thursday, the CHP Alliance convened representatives of gas utilities, engineering firms, and end-users to explore the merits of CHP, and the power crunch facing some data centers both domestically and abroad.

Worldwide, roughly 8,000 data centers store, process, and disseminate information that is crucial to modern life. But as the U.S. electrifies more sectors of the economy and as extreme weather becomes more frequent, these vital facilities remain vulnerable to outages.

CHP, also known as cogeneration, uses a single fuel to provide both electricity and thermal needs. These systems can also operate as part of a microgrid, allowing them to provide power in “island mode” during grid outages.

Panelists shared their personal experience installing CHP systems to power data center operations. The Pennsylvania State Employees Credit Union (PSECU) — which relies heavily on its data center to power largely digital banking operations — installed a CHP unit that has provided uninterrupted service for more than nine years, including backup power and cooling during grid outages. The credit union had originally planned to use a dual diesel generator for backup electrical needs but switched gears after learning more about CHP.

“That decision came from the idea that building a microgrid on-site, along with the cooling and heating, would be a much more robust solution for us,” said Pete Spicher, Facilities Manager at PSECU. “We were looking for the best solution to create a bulletproof system for our membership. … The idea of having self-contained cooling and heating from that system to support the HVAC needs of our data centers was also very attractive to us.”

In the Middle East, a lack of local grid capacity and transmission stymied plans to build a 60-megawatt data center. RED Engineering, an ENGIE company, designed a microgrid to provide CHP for the data center. The client is also invested in reaching zero carbon within 10 to 15 years, so while the facility will initially use gas-powered CHP, RED has plans to replace those turbines with green hydrogen.

“Although it would be starting off from day one using natural gas — because they have a robust natural gas network out there — ultimately, the appetite will be for using green fuels as they start to come to market,” said Phil Reid, Head of Energy Transition for RED. “[The project is] being driven by necessity. But it also provides us a convenient solution to be able to get to zero carbon.”

The efficiency of CHP also helps the data center to reduce water consumption used in evaporative cooling, a major benefit in the Gulf.

In Northern Virginia — home to the largest collection of data centers in the world — some have also faced potential energy shortfalls: The local utility, Dominion, warned it may not be able to satisfy data centers’ power needs over the next several years, in part due to a lack of high-capacity electric transmission.

“We’ve always worked under the assumption … that power was a given,” said Buddy Rizer, Executive Director of the Loudoun Department of Economic Development. “Then in July, we found out that that wasn’t necessarily the case, and we had to scramble. … [It] really started us rethinking power delivery and power generation and the ability to use an all-of-the-above strategy to meet the immense energy needs here in Loudoun County.”

Time is of the essence for these data centers. Gas utilities in the Northern Virginia region are interested in working with facilities to provide energy in the short- or long-term.

“There are some opportunities in our system to provide capacity and to serve these loads in the next 12 to 24 month range,” said David Lewis, Vice President of Business Development for Washington Gas Light Company (WGL), adding that his team works with customers to determine their longer-term needs. “What are their plans, what are their needs in terms of volumes, and how do they see that growing?”

 Installing new gas or CHP infrastructure can, of course, come with permitting challenges, panelists noted. Gas utilities are also expanding their use of renewable fuels. The Virginia General Assembly passed legislation in 2022 that allows gas companies to use fuels like biogas.

“That is a really exciting bill for us, and it has brought about a lot of different companies that have come to us to discuss biogas with them,” said Petrina Jones-Wrobleski, Government & Public Affairs Manager at Columbia Gas of Virginia. “There’s a lot of bipartisan support down at the Virginia General Assembly to create site readiness around the state. And of course, that involves that critical infrastructure. And that will help our industry and the data centers to get that infrastructure to fruition.”

You can download slides from the presentation and view a recording of the event here.


About the CHP Alliance:

The Combined Heat and Power Alliance (CHP Alliance) is the leading national voice for the deployment of Combined Heat and Power (CHP) and Waste Heat to Power (WHP). We are a coalition of business, labor, contractor, non-profit organizations, and educational institutions with the common purpose to educate all Americans about CHP and WHP, and how CHP and WHP can make America’s manufacturers and other businesses more competitive, reduce energy costs, enhance grid reliability, and reduce emissions.