Data Center Power Options in the Era of “Bring Your Own Power”

As many have pointed out over the last year or so, the main hindrance to data center and AI growth is power, and more specifically grid power. According to reporting in the Financial Times, the Mid-Atlantic backlog for interconnection to the grid is now more than 8 years, California’s backlog is around 5 years, and Texas’ backlog is 18 months.

The explosive growth of artificial intelligence and cloud computing has triggered an unprecedented demand for data centers and power, and developers are running headfirst into a massive grid bottleneck. Submitting a power interconnection request to a utility today often kicks off a grueling waiting game. The grid wasn’t built to scale at the speed of modern data demands. In an effort to get the power they need faster, hyperscalers have committed to building their own power plants for their data centers, which was recently formalized by signing the Ratepayer Protection Pledge.

But what about traditional enterprises with smaller IT and AI footprints that need data center space and power, but not nearly as much? How can they get what they need in a crowded data center market and a shortage of new power?

For companies that cannot afford to wait half a decade to expand or change their IT infrastructure footprint, they should turn to the adaptive reuse of already existing data center, commercial, or industrial facilities to expand or modernize their current footprints. Not only does adaptive reuse offer benefits like speed to market, sustainability, and in many cases lower costs, it opens the door to utilizing already existing grid power allocation. This approach is exceptionally feasible for companies that only need 2MW to 50MW of power.

Capitalizing on Stranded Power

“Stranded power” refers to an existing electrical allocation at a facility that is either abandoned or heavily underutilizing its capacity. RAEDEN locates facilities that have stranded power and the necessary infrastructure to be data centers, and we either partner with owners or buy properties for conversion to modern AI data centers. This means power is immediately available for data center use, i.e. no interconnection backlogs. By choosing adaptive reuse, enterprises can get data center space faster (about 12-18 months faster than new builds, not to mention years-long power backlogs), and they save 50-75% in carbon emissions by utilizing existing infrastructure.

Retrofitting an old industrial site for the exacting cooling, structural, and fiber-optic requirements of a modern data center can be complex. This is why it’s important to work with a developer who is an experienced data center operator and not just a real estate expert. Developers that manage adaptive reuse projects must have experience operating data centers to understand how to evaluate existing buildings for viable data center use.

Bridge Power via Natural Gas Turbines

Bridge power is another option for getting power to a site faster than making a grid interconnection. Bridge power involves generating power for a data center on site until grid interconnection can be completed. The fastest and most common way to do this today is to install natural gas turbines that connect to an existing natural gas line, which often have much shorter interconnection timelines than the electrical grid.

With this method, data centers can become operational in 12 to 18 months, effectively bridging the power gap until the primary utility power finally arrives.

Once the utility grid finally connects to the facility, companies have a few options:

1. They can sell the gas turbines. There is a robust secondary market for gas turbines.
2. The turbines can be used to replace traditional diesel generators as a cleaner, longer-running backup power source.
3. If local regulations and interconnect agreements permit, the data center can keep the turbines running to sell power back to the grid during peak demand times, transforming a sunk cost into a revenue-generating asset.

Renewable Energy and Battery Storage

In some areas it may be possible, but extremely costly, to utilize onsite renewable energy generation to power a data center. Because data centers require massive, constant baseload power and renewable energy is intermittent, the battery storage required to bridge gaps is immense. Pairing utility-scale solar arrays or wind turbines with massive Battery Energy Storage Systems (BESS) is the only way to provide a constant, self-sustaining power loop. This solution would also require a massive amount of land, in the thousands of acres, for solar panels or wind turbines to generate the necessary energy.

The sustainability advantage of this type of energy solution is huge, but it simply is not feasible in most cases.

Hydrogen Fuel Cells

Hydrogen fuel cells represent the newest technology for data center power generation, offering the reliability of fossil fuels without the carbon emissions.

Fuel cells generate electricity through a chemical reaction between hydrogen and oxygen, with the only byproduct being water and heat. They are highly reliable, scale well, operate quietly, and have a much smaller physical footprint than solar or wind farms. However, the infrastructure for “green hydrogen” (hydrogen produced using renewable energy) is still in its infancy. Supply chains are practically nonexistent in most regions, making fuel cells incredibly expensive and difficult to procure at the volume a data center requires. Additionally, storing liquid hydrogen onsite requires highly specialized, pressurized, and cryogenic tanks, which introduces new safety and zoning hurdles to the equation.

The 2-Year Timeline Verdict

Given that most companies require new data center resources in fewer than two years, the most feasible and cost-effect options today include some combination of the first two methods: utilizing stranded power and bridge power. Renewables and battery storage require too much land and lack the baseload reliability needed in that short timeframe, while hydrogen fuel cell supply chains are not yet mature enough for massive-scale deployment. Acquiring a site with existing, energized capacity is the absolute fastest and cheapest route to market, provided the physical location meets structural and network requirements.

While the upfront capital expenditure for turbines is high, the ability to generate revenue years ahead of schedule—coupled with the option to sell the turbines later—makes the economics highly favorable for companies racing to expand their capacity and/or meet AI-driven demand.

Do You Need Data Center Space in Less Than 2 Years?

If you think that adaptive reuse could be the right option to fulfill your company’s pressing need for data center space and power, contact us to start your site search now. RAEDEN will evaluate sites, present options, buy or lease the space, build it out to meet your custom requirements, and operate the data center going forward.