“PV is Decisive for a Quick Expansion of AI Data Centers”

Interview with Andreas Hoischen, Senior Director Solar Solutions of Delta Electronics EMEA

Mr. Hoischen, the global expansion of data centers is in full swing – mainly driven by AI. What effects does this trend have on the demand for renewable energies in Europe?

The energy demand of data centers has been rising sharply, particularly because of the use of AI. So we have to wonder where this energy should come from in the future. If we want continue on the path towards decarbonization, fossil fuels are not an option. In many countries, nuclear energy is politically not accepted. While hydropower potential is largely already exploited and slow to expand, wind energy growth is similarly delayed by long approval procedures. None of these options can keep up with the speed of AI capacities being deployed. Consequently, solar energy provides a sustainable solution that can be widely and quickly implemented. PV is key for a quick expansion of AI data centers.

So short-term availability and decarbonization targets are decisive factors that drive the expansion of solar energy capacities for the digital industry in Europe?

Exactly. Green hydrogen could theoretically play a role, but the technology is still in its infancy and not yet widely available. Ultimately, gas-fired power plants are used as transitional solutions, but they create dependency on fossil fuels. Also, AI is competing for gas with other industries, which could drive up the price even more. We have to ensure that the AI-driven consumption in data centers does not contribute to displacing industrial companies from Europe.

Data centers require an absolutely stable, uninterruptible power supply. How does this affect the planning and integration of solar and wind energy? Where do you see the greatest technical challenges?

The uninterruptible power supply system in data centers is based on inverter technology. This is very similar to the technology of solar or wind inverters, which leads to interesting integration potentials. One possible approach is to avoid unnecessary energy conversion, and to maintain direct current. Solar energy is generated as direct current and could then be used immediately, offering additional efficiency gains. It would make sense to implement such concepts in pilot projects.

Have you observed that data center operators are increasingly becoming active players in the energy transition, for example by using solutions that facilitate on-site consumption, PPAs or participation in renewable energy projects?

While this is an exciting development, it has its downsides. The rising energy demand of data centers can lead to conflicts of goals for energy supply. There are some regions in the USA where the high electricity consumption of data centers results in restrictions in residents’ electricity supply. It is doubtful whether European societies would accept such a situation. At the same time, we are observing data centers procuring their electricity through PPAs from renewable installations. We know from experience that large software companies act as buyers of renewable electricity from PV parks. Large hyperscalers are also busy looking into developing their own energy initiatives. The objective is often to make efficiency gains, for example by reducing the step of conversion from direct to alternating current. This kind of approach is particularly worthwhile for very large data centers.

How can data centers be operated in a grid-serving manner by contributing to grid stability?

First and foremost, a data center creates a very large permanent load on the grid. Unlike with industrial facilities, the load created by data centers is almost impossible to control flexibly, their demand can’t just be reduced. However, providing reactive power is an option. When combined with battery storage systems, data centers can contribute to grid stabilization – the technology for it already exists. The challenge, however, is the systematic integration into grid control.

How close will the interconnection of the energy and the digital industry be in the future?

The interconnection between these two industries is going to increase considerably. Thanks to AI, energy is becoming a strategic factor for the digital industry. Both industries have to be planned together. This could be done by cooperating more closely, or even by integrating structures. At the same time, the energy industry can benefit from digitalization. Today, too many processes are still analog. Digital controllers could help make grid operation more efficient. This will require a consistent collaboration between the energy and the digital industries.