Dive Brief:
- A 200-MW data center could offset 10% of its peak load by investing $50 million in low-cost residential efficiency upgrades, energy policy group AnnDyl said in a preliminary analysis earlier this month.
- The Washington, D.C.-based firm modeled the impact of targeted weatherization and smart thermostat deployments in Ohio, a large and growing data center market in the capacity-strained PJM Interconnection grid region.
- AnnDyl’s analysis builds on a Rewiring America report released in September that found hyperscalers could substantially offset their expected load through a broader set of residential electrification investments.
Dive Insight:
AnnDyl’s report modeled the grid impacts of a hypothetical 200-MW data center and the benefits of partially offsetting its load through residential efficiency investments that reduce load elsewhere on the system.
Report authors Kara Saul Rinaldi and Doug Presley considered a range of possible investments, including smart thermostats enrolled in a demand response program, cold climate heat pumps for space heating, heat pump hot water heaters, insulation and air sealing. They then modeled the investments’ expected energy savings, peak load reduction and other benefits.
Rinaldi and Presley found the most cost-effective set of upgrades to be a package of insulation, air and duct sealing, and smart thermostat upgrades to homes near the data center. In addition to offsetting 10% of the data center’s peak load, that package would produce about $3 million in annual customer savings and create more than 200 jobs.
The analysis considered other scenarios, including deployments of only smart thermostats, cold climate heat pumps paired with smart thermostats, and grid-interactive heat pump water heaters. Those fell short for various reasons. For example, the authors said deploying cold climate heat pumps for space heating without corresponding insulation upgrades could negatively impact the grid — though combining the two could have significant cost and environmental benefits.
The AnnDyl analysis stressed that a $50 million investment could not by itself offset the full load of a 200-MW data center.
Rewiring America’s more expansive Homegrown Energy report found tech companies could offset about one-third of their expected capacity needs over the next five years by subsidizing heat pumps for space and water heating in households that currently use less efficient electric systems and “more than meet their total planned capacity needs” by paying for battery storage and rooftop solar in homes suited for it.
That level of investment would involve millions of heat pumps, batteries and solar systems installed across the United States. In a follow-up report, Rewiring America said it would create 5.5 million new jobs by 2030.
“We’ve been in active discussions with multiple hyperscalers since releasing the Homegrown Energy report,” Wael Kanj, research manager at Rewiring America, said in an email. “[W]hat we’ve heard consistently is that hyperscalers are excited by solutions that don’t just meet their load requirements but also deliver visible benefits to the communities hosting them.”
Kanj added that those conversations “are still exploratory” but said hyperscalers were intrigued by investments that could build public trust among data center neighbors.
Data center developers and their tech-company customers have faced increasingly organized community pushback amid concerns about the facilities’ environmental and utility-bill impacts.
