By Carsten Baumann, Director of Strategic Initiatives & Solution Architect, Schneider Electric

As digitization continues to drive the need for sustainable data centers, so does the need for cost-effective ways to keep pace with demand. Unfortunately, while access to affordable capital is seemingly straightforward for many data center operators, it can be complicated, expensive, or unattainable for others. As a result, some companies have started to mirror Silicon Valley startup behavior by raising money to expand their data center footprint. 

However, there is a new “sweet spot” for those looking to scale sustainable operations without making risky financial moves: the Energy-as-a-Service (EaaS) model. EaaS models offer energy cost predictability, greater resiliency, and sustainability to the data center industry as it experiences explosive growth.

What is Energy-as-a-Service?

Energy-as-a-service models are a solution to the sky-high cost of energy that many enterprises face as they provide access to energy management services without the upfront costs. These services, which tend to include asset and energy use management, are uniquely tailored to support each customer’s specific energy goals and are delivered via a contract with the provider. EaaS is onsite sustainable electricity generation assets that guarantee fixed-price access to electricity. As a result, an organization only pays for its service and is free from paying for equipment costs, maintenance, and other capital expenditures.

Setting the Data Center Industry Up for Success

EaaS serves as a way for the data center industry to reliably and sustainably expand amidst the increased demand for data. EaaS models enable data centers to achieve long-term cost stability, resilience, reliability, and greenhouse gas reduction outcomes. 

Through these models, organizations can avoid up-front expenditure and benefit from a contract that provides price certainty for long-term energy costs, which is essential when operating a power-guzzling data center. EaaS also helps consumers and communities improve energy resilience and sustainability through upgrades to critical infrastructure to ensure flexibility, continuous power, and responsiveness, all while reducing performance risk and capital burden. In addition, this opens the door to integrations with renewable energy resources, including battery storage, which reduces emissions with locally produced, efficiently-consumed energy.

Despite the rising energy cost and the inherent challenges associated with upgrading to sustainable infrastructure, EaaS lays a clear path for organizations that must expand their data center footprint with limited resources. EaaS makes clean energy accessible and reliable, even for organizations that don’t want to shoulder a significant financial burden.

About the Author

As a Solution Architect at Schneider Electric, Carsten is helping clients with their Industrial IoT and Microgrid initiatives that achieve greater resiliency and sustainability objectives, while creating economic benefits. Prior to this role, he supported the consulting and engineering community by advising on resource-optimized energy management solutions in the data center market. He offers nearly three decades of experience in the data center, broadcast, telecommunications, AV and IT industries. Prior to joining Schneider Electric, Carsten held senior management positions with Barco, Leitch, Inc.

His papers have been published in peer-reviewed journals, and he frequently speaks on national and international venues. In addition, Carsten served as President on the board of AFCOM Southern California and was chairman of The Global Society for Asset Management (G-SAM). Carsten holds an electrical engineering degree from the Theodor-Litt-Schule in Giessen, Germany.