Microsoft Data Center to Guard Utility Grid from Blackouts

As the power requirements of its data center in Cheyenne, Wyoming, approach 35MW, Microsoft and its energy provider in the area are laying the groundwork to ensure the site can continue to grow.

Cheyenne has never needed nearly the amount of power the Microsoft data center campus is expected to draw in the future, so neither the local utility, Black Hills Energy, nor the state’s Public Utility Commission had the infrastructure in place to supply what may at one point become a 200MW load to a single customer. That’s almost double what the entire City of Cheyenne needs, according to a recent Environmental & Energy Publishing article.

So they had to get creative. The result is an agreement signed earlier this year, under which Black Hills will buy enough additional energy to deliver whatever the Microsoft data center's load is at any given time, while Microsoft will fire up its natural-gas-fueled backup power system at times of peak load on the local grid, acting essentially as a demand-response mechanism to prevent blackouts caused by energy shortages.

To implement the agreement, Black Hills created a new tariff for high-load industrial customers, which was approved by the PUC. The tariff is for customers using at least 13MW who have lots of onsite power generation capacity. In effect, Microsoft is the only company in the utility’s territory that fits that description.

The deal illustrates a problem that’s bound to reoccur in numerous parts of the country as giant cloud and internet companies, such as Microsoft, Google, Facebook, and Amazon, continue expanding data center capacity to meet quickly growing demand for their services. These companies are building data centers at unprecedented rate and scale, and not all places they choose will be prepared to supply them with the amount of energy they need right away.

Read the full E&E Publishing article here: Data Center or Power Plant? In Wyo. It’s Both