by L&G’s Asset Management business & Miriam Uebel
With AI adoption accelerating and digitalisation surging, our recent webinar unpacked the rise of data centres, their electricity demand, and how we believe clean energy and grid supporting technologies can help provide solutions.
Our recent “Hungry Like the Wolf” webinar – hosted in partnership with NTR – examined the accelerating growth of data centres, the energy demand they are creating, and the resulting implications for grid stability and decarbonisation. The discussion focused on how data centres are shifting from passive electricity consumers to active participants in power systems, and how clean energy, storage and grid‑supporting technologies can help manage emerging constraints.
Key takeaways from the discussion included:
- Data centres are fundamentally different types of load
Their fast, volatile demand and absence of inherent inertia introduce system‑level challenges that traditional grids weren’t designed to handle. - Growth is colliding with grid constraints
Rapid data centre expansion is occurring alongside wider electrification and decarbonisation efforts, contributing to connection backlogs and increased regulatory scrutiny across major European markets. - Regulation is reshaping expectations
Data centres are increasingly regarded as active system participants, with growing obligations relating to flexibility, renewable sourcing and contributions to system stability. - Clean energy can meet a large share of demand – if properly engineered
Hybrid wind, solar and battery solutions may be able to supply a significant portion of data centre consumption on a self‑supply basis, but solutions must remain integrated with the broader grid to be effective. - Grid‑supporting technologies are essential
Technologies such as synchronous condensers, grid‑forming batteries and advanced E-STATCOMs provide the inertia, frequency support and voltage stability required for grids with renewable-heavy power systems. - Data centres can be part of the solution
With the right mix of clean generation, storage and electrification‑enabling infrastructure, data centres may be able to support grid stability and actively contribute to the energy transition.
You can watch the full recording of the webinar here.
(Please note that registration is required before you can view the webinar.)
Assumptions, opinions, and estimates are provided for illustrative purposes only. There is no guarantee that any forecast will come to pass.
Disclaimer: Views in this blog do not promote, and are not directly connected to any L&G product or service. Views are from a range of L&G investment professionals, may be specific to an author’s particular investment region or desk, and do not necessarily reflect the views of L&G. For investment professionals only.
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