The use of flexible grid connections and bring-your-own-capacity arrangements could bring data centers online faster and more reliably while reducing the associated cost burden for other utility customers, according to a Thursday report from Camus, encoord and Princeton University’s ZERO Lab.
Under a traditional firm-only interconnection, each gigawatt of new data center demand adds $764 million in system supply costs, the report said, “driven by 2.17 GW of required nameplate generation additions across natural gas, storage, solar, and wind.”
But the report authors said that flexible grid connections with 20% conditional firm service would eliminate the need for 273 MW of those new additions, which would reduce costs by $78 million per GW. Additionally, they project that a BYOC paradigm can reduce costs by a further $326 million per GW, “with the data center procuring accredited resources directly and offering them into the market to increase supply.”
A 500-MW data center using flexible grid connection and BYOC can also reach full operation more quickly — in roughly two years, “three to five years faster than traditional interconnection processes,” the report said.
The report’s authors said they used encoord’s integrated systems modeling platform to simulate available firm transmission capacity and flexibility requirements, the National Renewable Energy Laboratory REopt model to determine cost-optimal portfolios of on-site flexibility resources, and Princeton’s GenX model to assess generation capacity requirements and system-level cost and emissions impacts.
“Our analysis applies [a flexible grid connection and BYOC approach] to real transmission data from a single utility within the PJM footprint, paired with system-level modeling of PJM’s generation fleet,” the report said.
The report also asserted that flexible data centers can increase efficient utilization of a generation fleet due to the higher load factor at which data centers generally operate.
“As these effects scale, utilities can move more megawatt-hours through the same infrastructure and derive more value from their existing generation portfolios — spreading fixed costs over more energy sales and creating opportunities to ease rate pressure for all customers,” the report said.
However, the report authors note that their work “represents a demonstration of the methodology for a select number of sites and system configurations, rather than a comprehensive national assessment. Several areas merit further study to validate, refine, and extend the insights presented here.”
The authors suggest future work could build on this report by exploring “the system-level impact of BYOC portfolios, especially with more clean generation,” assessing “operational interactions when multiple flexible grid connections exist in the same region” and expanding this analysis across additional utility and independent system operator/regional transmission operator regions.
