Xendee Blog Meeting Energy Demand for Data Centers With DER and Future SMR - Part 1 The Problem and Approach

The growing power demand of data centers driven by AI highlights the urgent need for sustainable energy solutions, with Microgrids and Distributed Energy Resources (DER) offering a more resilient, cost-effective alternative to traditional grid upgrades, as demonstrated through Xendee's multi-year optimization approach. Part 1 - The Problem and the Right Approach to Solving ItBy: Giovanni Maronati, Michael Stadler, Timothy Grunloh, Reynaldo Guerrero, Nishaant SinhaThe Data Center Power Surge: AI and BeyondIn the United States alone the power demand of data centers is expected to triple by 2030, rising from 3% to 11-12% of total electricity consumption[1],[2]. Hyperscale data centers, capable of rapid scaling to meet the growing computational needs of AI and cloud services, are at the forefront of this surge. These facilities can require upwards of 1 GW of power, equivalent to the output of a nuclear power plant[3]. Although improvements in GPUs and AI server efficiencies have been notable - such as a recent 47% improvement in performance per Watt achieved by one leading hardware provider - the sheer scale of AI workloads continues to drive net increases in energy consumption[4]. At the same time, historical efficiency gains observed between 2015 and 2019, averaging 15% annually, have begun to decelerate to 1-2% per year, underscoring the urgency for alternative energy solutions[5],[4].Grid Challenges and Energy Sustainability