Tune in to hear how Compass is rethinking data center power demands:
Host 1 (00:00):
Hey everyone. Thanks for tuning in. Let’s get into the rapidly evolving world of data centers and utilities. Specifically the growing demand for energy and how this new wave of hyper scale’s data centers is pushing us to rethink how utilities and data centers work together.
Host 2 (00:16):
It’s clear that the digital economy is expanding faster than we ever expected, and with that comes a significant shift in the way energy is being consumed. It’s no longer just a matter of meeting the power needs of a few commercial and industrial clients,
Host 1 (00:30):
Right? We’re now talking about massive large scale data centers that can demand hundreds of megawatts for their projects. Sometimes with little guarantee, they’ll actually be developed,
Host 2 (00:41):
And this is a huge change. Historically, a utility could handle a request from a commercial customer, even as high as 20 megawatts. But now with the explosion of hyperscale data centers, utilities are being asked to meet far greater demands. Sometimes for projects that may not even happen,
Host 1 (00:58):
The cumulative demand is outpacing reserve capacity in many areas. What do we think this means for the future?
Host 2 (01:04):
It’s a big challenge for sure, and one that requires a new approach. Utilities are still under their traditional duty to serve, which means they can’t pick and choose who they provide power to, but this rapid growth of hyperscale data centers is definitely changing the game.
Host 1 (01:20):
So how do we move forward?
Host 2 (01:22):
Well, one solution we’ve seen is data centers looking to build in more unconventional places. A few years ago, we started seeing data centers pop up in rural or less developed areas, places like Kuna, Idaho, cu Pepper County, Virginia, and Wasco County, Oregon. These areas weren’t traditionally known for their fiber optic infrastructure, but they’ve benefited as a result.
Host 1 (01:45):
That’s right. These communities might not have been traditional types of tech hubs, but data centers have brought in a lot of economic benefits, things like job creation, tax revenue, and social investments. But that strategy, while effective for a time, is reaching its limits. Power is becoming harder to find even in these untraditional areas, so it’s time to think long-term about how we balance supply and demand,
Host 2 (02:09):
And that’s where companies like Compass Data Centers come in based in Dallas. Compass has a reputation for doing things a little differently, and they’re pushing for a new kind of partnership between data centers and utilities. They believe in what they call a coser future where both industries work together not just to meet demand, but to plan and share risks and investments.
Host 1 (02:32):
Yep. They’ve been very vocal about their vision for the future.
Host 2 (02:36):
They argue that data centers should help utilities plan for the long-term instead of just making a request and then leaving the utility to scramble. They want to be involved in the planning stages, especially when it comes to ramping up power usage over time.
Host 1 (02:52):
Data centers shouldn’t just dump demand onto utilities without a plan. Instead, they can provide utilities with a clear measured roadmap for how their power needs will grow over the years. This kind of transparency would help utilities make more informed decisions, helping to strengthen the grid in the longterm.
Host 2 (03:10):
And speaking of fairness, another major point compass raises is the idea of sharing risk. They’re proposing that if a utility has to invest in generation or transmission infrastructure to meet the demands of a data center, that data center should pay some portion of those costs. Whether or not the project is fully realized, this would help prevent rate payers from bearing all the financial risk. It’s about fair contributions.
Host 1 (03:34):
It really is. For example, compass has already stepped up to the plate in North Texas where they secured the right of way for transmission lines and even funded the building of a substation for a 200 acre hyperscale campus, demonstrating that private companies can make these investments more quickly and with more flexibility than public utilities, which can take years to act.
Host 2 (03:57):
Another solution that Compass suggests is the introduction of creative tariffs. Right now, the cost of expanding infrastructure is spread across all rate payers, but Compass argues that larger commercial and industrial customers like data centers should shoulder more of the burden this way. Household rate payers wouldn’t be paying for the grid upgrades needed to support the growth of digital infrastructure.
Host 1 (04:22):
It’s a win-win if done right. Utilities get the support they need to expand capacity and data centers help ensure that the financial burden is shared more equitably.
Host 2 (04:32):
Plus, it opens up the possibility for data centers to provide more backup power to the grid during peak demand, which is currently underutilized.
Host 1 (04:42):
It’s a great example of thinking outside the box.
Host 2 (04:44):
Of course, there are hurdles to clear, especially when it comes to permitting, but the momentum is building, and we’re seeing more collaboration between utilities and data centers than ever before. Both sides know that this is a critical moment,
Host 1 (04:56):
And that’s really the key. Utilities and data centers both face immense challenges as they try to keep up with the demands of a growing digital economy, but with better cooperation, better planning and innovative solutions, we can create a future where both industries thrive and consumers get the reliable service they need.
Host 2 (05:14):
Exactly. The challenge is big, but so is the opportunity. We’re seeing some creative thinking and we’re hopeful that with a coser approach, we’ll be able to build a system that works for everyone from data centers to the utilities and the communities they serve.
Host 1 (05:30):
Like I said, sounds like a win-win to me. Well, we hope you found this discussion insightful. If you’d like to find out more about collaborative solutions like these or some of the other out-of-the box ways Compass approaches their data centers, visit their website @ compassdatacenters.com.
Host 2 (05:46):
Thanks for listening, and we’ll see you next time.
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