Energy Sources for Data Centers: Between Growth and Sustainability and the Role of Bioenergy

Data centers are physical facilities that house computer systems and related infrastructure, such as servers and storage, used to store and process data. They form the foundation of a nation's computing power and are a core dependency in building large-scale Artificial Intelligence (AI). AI data centers, in particular, are particularly energy-intensive. According to the International Energy Agency (IEA), a typical AI data center currently uses as much energy as 100,000 households, while large AI centers currently consume about 20 times that amount (2 million households).

The computing power needed to support AI growth is also doubling approximately every 100 days. For example, Malaysia, it is not surprising that data center energy consumption in Malaysia is projected to soar to more than 5,000 MW by 2035, which is 40 percent of Peninsular Malaysia's current power capacity, or 11.1 percent of Malaysia's projected power capacity in 2035. Meanwhile, in Indonesia. Meanwhile, the projection of data center electricity consumption in Indonesia has increased significantly, predicted to reach 5,200 MW in 2034 and could even reach 12,000 MW in 2033. And the current capacity in 2025 is only around 274 MW and with a predicted growth of 16.8% per year, it can reach the target of >2,000 MW in 2029.

There are at least two main drivers of growth in the data center industry. First, demand-side factors include the growth of cloud computing and AI, along with the increasing global demand for data storage and processing capacity for everyday tasks like social networking, e-commerce, and data storage. Second, supply-side factors include the availability of resources such as electricity and water, fiber optic connectivity, and land availability.

In the growing data center industry, high or wasteful energy consumption has contributed to rising electricity prices for residents and small businesses. Each country should learn from these case studies as they strive to strike a balance between growth and sustainability. For example, in Georgia, the fastest-growing data center market in the country, Georgia Power reports that 80 percent of the projected 8,200 MW increase in energy demand by 2030 is related to planned data centers opening in the state. To address the increased demand, base electricity rates have been raised and new nuclear power plant (NPP) are under construction.

Georgia is an attractive market for data centers, given its relatively low electricity prices, with industrial electricity rates about 42 percent below the US national average. Significant tax relief was also promised, with at least $163 million in state collections eliminated and local sales tax annually starting in 2022. However, starting in 2023, the average Georgia Power residential customer will pay $43 more per month following a base rate increase. To address this challenge, a Senate bill was introduced to protect residential and commercial customers from higher electricity bills due to the utility's significant investment in AI-powered energy needs.

Efforts to address the increasing energy demand for data centers while reducing their environmental impact are necessary. Typical approaches include optimizing Power Use Effectiveness (PUE) and related metrics, as well as shifting to renewable energy. The use of renewable energy for data centers remains limited, or even at a small capacity of less than 5%. Renewable energy sources still prioritize solar and intermittent wind.

Industry participants also state that the intermittent nature of solar energy (at least without a well-developed battery storage system) does not make it an ideal energy source for data centers, given the need to keep data centers running 24/7. With limited solar generating capacity, data centers often rely on backup diesel generators. While renewable diesel (biodiesel and green diesel) is an available option, there are currently no regulations encouraging this transition.

Biomass as an energy source, or bioenergy, for data centers is still very limited. This biomass can be used directly in biomass power plants, where the CFB type is very common, or through co-firing in coal-fired power plants. Furthermore, biomass can be utilized as an energy source and biochar production through pyrolysis technology, as is the case with this US company. The syngas from pyrolysis serves as a carbon-neutral energy source, and biochar is the primary product for carbon capture and sequestration (CCS), resulting in carbon-negative operations. 

From Carbon Neutral to Carbon Negative : Development of Batteries, Wood Pellets, Carbon Capture and Storage (CCS) and Biochar

Research to develop large capacity batteries continues to be carried out so that electricity produced from renewable energy power plants such as wind and solar can be stored and used at any time. Electricity generation that comes from wind and sun is intermittent, that is, at any time the wind may not blow or there will be thick clouds or at night so there is no sunlight and electricity cannot be produced. In this condition, it is necessary to use a large capacity battery that can store this electricity. It is predicted that the development of this battery will not only require large costs but will also take a long time. It is predicted that it will take several decades for this battery to become a reality.

The current electricity supply, the majority of which still uses fossil fuels, especially coal, which has been proven to be environmentally unfriendly (carbon positive), needs to continue to be reduced and the portion of renewable energy in the form of wood pellets (carbon neutral) added by cofiring. The portion or ratio of cofiring can continue to be increased and can even be 100% using wood pellets (fulfiring). If the coal power plant can be changed 100% to a biomass or wood pellet fueled power plant, the power plant will become environmentally friendly or carbon neutral. And at a time when renewable energy sources are abundant and the electrical energy products can be stored in large capacity batteries, it is possible that power plants using combustion technology could be closed or stopped.

The use of wood pellets can be said to be an intermediate solution before the battery era. Large capacity wood pellet production will ideally use energy plantations as a supplier or source of raw materials. Fast rotation crops and plantations from legume groups such as calliandra and gliricidae are the right choice for these energy plantationns. Energy plantations themselves can act as carbon sinks or absorb CO2 from the atmosphere. With good management so that the volume of biomass or wood harvested is smaller or maximum equal to the plant growth rate, the function of energy plantations as carbon sinks continues to be maintained. Using wood pellets as carbon neutral fuel while managing energy plantations as a carbon sink or negative carbon provides optimal environmental benefits.

 

The use of 100% biomass fuel in power plants is carbon neutral, the same as the use of renewable energy from wind, water and sun. However, the use of biomass energy, especially wood pellets, is not intermittent and is always available when needed. Using batteries will be a solution to the intermittent problem. This 100% biomass fueled power plant can become carbon negative when using CCS (carbon capture and storage) devices. And this is very good because it can return the CO2 emitted into the atmosphere back to the bowels of the earth (carbon negative). And when coal power plants are installed with CCS devices, they will become carbon neutral. However, the CCS device is still very expensive and its operation is also not cheap.

And when the battery era arrives so that electricity generation using combustion technology is closed or stopped, the wood from the energy plantations that have been created will be used as raw material for biochar. It is possible that the wood from these energy plantations is still made into wood pellets to save transportation costs and make handling easier and then taken to pyrolysis facilities for biochar production. Biochar used in agriculture has dual benefits, namely improving soil quality and as a carbon sink. Using biochar with fertilizer will create slow release fertilizer, thereby increasing NUE (nutrient use efficiency) for plants, thereby saving fertilizer costs and reducing environmental pollution. Biochar is able to last or not decompose for hundreds of years or is permanent in the soil. The more biochar used, the more benefits it will provide for soil fertility and climate. Biochar as a carbon sink or carbon sequestration is also carbon negative. Energy plantations with good management will become carbon sinks and the biochar is also a carbon sink in the form of carbon sequestration, of course this provides the most optimal climate benefits.