
Data center demand is surging due to the growth of artificial intelligence (AI) and cloud computing, and developers are under pressure to find reliable, resilient, and cost-efficient power sources.
Microgrids are rising to meet this challenge. These localized energy resources can operate independently of the main grid and help data center owners and operators to meet their power generation needs. But achieving optimal results from microgrids requires planning for the right mix and configuration of technologies such as renewables, storage, gensets, and thermal assets.
The right mix and sizing of these energy generation and storage technologies is critical, and developers should also plan beyond simply powering their data centers. Cooling the infrastructure that runs these servers is equally critical and, based on past project performance, has proven to be a major factor in operational costs and energy use as well.
The Cooling Challenge
Cooling data centers requires vast amounts of electricity. As they compute, servers generate significant amounts of waste heat. Keeping these servers effectively cooled can be costly and energy-intensive. McKinsey estimates that cooling data centers will require investments upwards of $1.3 trillion. That alone is about 25% of the total investment needed to meet current data center demand.
Modern data centers typically rely on traditional electric chillers to extract heat, but they are energy-intensive. By continually drawing on utility electricity, and especially during peak loads, these chillers have a compounded effect. Not only do they increase operational costs, but they also exacerbate the already growing problem of generating enough electricity to power data centers to meet current demand. When electricity costs are volatile or when utilities impose peak demand rates, reliance on traditional electric chillers becomes even more risky.
Microgrids Can Cool Data Centers with Less Electricity
Microgrids can offer data centers a path to deliver more power to data center facilities while also increasing ROI. In addition to the integration of renewables where appropriate, they achieve this by decreasing electricity intensity in cooling, by integrating two technologies to great effect: Combined Heat and Power (CHP) systems alongside absorption chillers. Although CHP is commonly deployed in commercial microgrid applications, absorption chillers are an underutilized opportunity. When paired together, they can help data center developers to thread the needle on the cooling challenge.
CHP systems, also known as cogeneration, generate electricity onsite and capture waste heat that would otherwise be discarded. This waste heat can be captured from a variety of sources, including microturbines, engines, or other generation equipment. Instead of relying on electricity for cooling, absorption chillers then repurpose that captured heat to drive the cooling process. Because they rely on thermal gradients rather than large electric compressors, absorption chillers shift cooling loads off the grid.
Data centers that use microgrids with integrated absorption chillers and CHP systems see the ing benefits:
- Lower overall electricity usage, which reduces total operational costs
- Reduced peak loads, which also reduces overall operational costs
- 24/7 cooling, even during power outages
- Operational independence
- A lower overall carbon footprint
Economic Advantages
One compelling illustration of the possibilities of strategically deployed distributed energy resources (DERs) comes from a study focused on a data center in Santa Clara, CA that faces relatively high electricity costs.
The analysis modeled a multi-year approach in which CHP with absorption chillers and other DER technologies, such as gas generators and cold storage, were introduced in 2025. This approach allowed the data center to find the optimal capacity and electricity produced from DERs, reducing reliance on the utility and lowering exposure to future price increases from the utility, leading to the lowest overall cost.
The analysis found clear economic and environmental advantages to this approach over the course of the project period, including 79.66% OPEX savings and a 8.69% reduction in emissions.
Ultimately, this serves as an illustration of how a microgrid featuring CHP + absorption chillers can not only make sense in terms of providing backup power for a data center, but also can make strong economic sense.
Through proper analysis, the optimal mix of technologies can be identified. Although every project is unique, CHP with absorption chillers typically improves the economics significantly for data centers and similar projects.
Conclusion
For data center developers, the path to achieving the lowest possible costs isn’t just about electricity generation. It’s about how you cool all of the data center hardware, too.
Microgrids that integrate CHP alongside absorption chillers deliver an impactful route in offloading cooling from electrical systems, reducing peak demand, and creating independence from the broader electrical grid.
As data center demand continues to accelerate, the current status quo of cooling with electric chillers reliant on grid power is financially and operationally risky. Developers must evaluate microgrid designs not only for power generation, but also for cooling strategy and efficiency. Those who choose designs that rely less on electricity for cooling will be better positioned to meet tomorrow’s data center demands.
About the Author

Since July 2018, Dr. Michael Stadler has been the Chief Technology Officer and co-founder of the San Diego-based Xendee Corporation. Before that, Stadler was a Staff Scientist at Lawrence Berkeley National Laboratory and led their Grid Integration Group. He also received the White House’s Presidential Early Career Award for Scientists and Engineers (PECASE), which is the highest honor bestowed by the U.S. government on science and engineering professionals in the early stages of their independent research careers. Michael has published more than 270 papers, journals, and reports to date and holds 17 copyrights and patents.
Sumber Artikel:
Renewableenergyworld.com
