The desire for computing power at data centers is growing faster than the grid can supply it. AEP Ohio is proposing a new way to bring electricity to two large data centers that won’t tax the grid in an application the company filed with the Public Utilities Commission of Ohio.
AEP Ohio wants to build onsite power generators that use solid oxide fuel cells and natural gas to generate electricity using chemical reactions, not combustion.
The systems would be paid for by the data centers over the course of a six-year contract with Amazon Web Services and a 15-year contract with Cologix. Both companies have plans to spend billions on data centers in central Ohio in the coming years.
But, there’s not enough megawatts available to run the energy-intensive operations. AEP expects it will take 7 to 10 years before the transmission infrastructure can meet the full demand.
The applications state the new centers are meant to bridge that gap.
“These agreements with our data center customers allow us to provide a bridge solution for data centers’ energy needs so the electric grid can be built out without compromising service to any of our customers,” reads a statement from AEP Ohio.
AEP Ohio’s application states existing contracts with the data center companies for power from the grid will be honored, at their maximum capacity, but the centers are expected to need more energy than that.
“With existing contract capacity of grid power and an additional capacity of the fuel cell system, the customer will be able to expand its data center facilities at the site,” the application states.
But there will be fail safes, so the centers don’t take more power from the grid than they’re supposed to, the application states.
“However, the fuel cell system will be designed with appropriate systems and technology so that even if the system unexpectedly fails, the customer will either curtail load or dispatch onsite generation resources virtually instantaneously. This ensures that the customer will be limited to its existing contract capacity from the grid after deployment of the fuel cell system,” the application states.
The utility redacted the financial terms of the proposed agreements. They're asking for an order to keep the information secret under a rule allowing companies to protect their trade secrets.
“It is standard procedure on a commercial agreement like this to keep some key pricing terms and commercial terms confidential,” AEP Ohio said in an emailed statement.
It’s unclear when the commissioners will make a decision on the proposals or protective orders, which are typically granted.
The utility would source the natural gas from the market, and contract with Bloom Energy to build and maintain the oxide fuel cell systems.
“AEP’s agreement with Bloom Energy, finalized in November of last year, allows us to offer this customized solution for large-scale users, and we are hopeful the PUCO will be supportive,” AEP Ohio also said in an email.
The application states other AEP Ohio customers will never have to pay toward the systems.
“It’s important to note that the costs of the projects will be borne solely by AWS and Cologix and will never be included in our rates that other customers pay,” the company stated.
