California regulators are on the lookout for cleaner alternatives to replace the widespread use of back-up diesel generation — particularly among data centers in Silicon Valley and other areas of the state — and some industry players think hydrogen could be the answer. 

Hydrogen's ability to provide long periods of storage capability — critical to a state that has experienced reliability problems and an industry that relies on electricity to keep its servers running — could make it an effective option for displacing the current practice of setting up large diesel generators, stakeholders said last week at a workshop hosted by the California Energy Commission. 

"Data center back-up applications [are] probably the most immediate business for hydrogen fuel cells today, primarily as green hydrogen cost has less impact on the total cost of ownership," Roy Segev, director of business development with Ballard Power, said at the workshop.

Hydrogen fuel cells come with a set of advantages, Segev said: they occupy less space than batteries, are quiet, reliable and 100% zero-emission. 

An increasing number of data centers and other commercial operations in California have been depending on diesel generators for backup power in the last few years. Approximately 10,000 backup diesel-fired engines have been permitted in the Bay Area Air Quality Management District, a quarter of which pre-date U.S. Environmental Protection Agency standards, according to Jakub Zielkiewicz, the district's climate advisor. The district has identified 15 new data center facilities that are being planned and constructed, which will collectively represent at least 1.5 GW of back-up diesel generation capacity.

"Why not get ahead of the curve now and install cleaner technologies, rather than potentially having to foot the bill for an expensive retrofit in, say, five years, or 10 years, or 20 years?" Zielkiewicz said. 

And back-up generation could continue to play a key role, given California's deployment of wildfire-related power shut-offs, as well as larger grid reliability issues that led the California Independent System Operator to initiate rolling blackouts last August. Immediately following the August blackouts, for instance, "we were able to get through some very challenging days… [as] a result of, really, conservation, and some of that conservation was likely offset and being served by back-up generators," said Mark Rothleder, senior vice president and chief operating officer at CAISO.

Hydrogen could be a solution for longer outages

Regulators are now soliciting information on possible alternatives to diesel, with an eye to providing funding to develop and commercialize cleaner energy technologies down the line.

"One of the things we're seeing both with our customers, that are generally C&I customers, but also a number of utilities, is a very strong focus on hydrogen for a number of reasons," said Scott Reynolds, managing director at Bloom Energy. 

"As the concentration or percent of electricity demanded on the grid from renewables goes up … many think tanks and consultancies are saying that the need for hydrogen goes up."

Hydrogen could be an attractive proposition, especially for prolonged outages, or as the reliance on renewables at the grid level becomes inter-seasonal, Reynolds said. A 5% concentration of hydrogen in the gas grid could equate to 650 GWh of energy storage — "so we're really keen to find ways to put more hydrogen into pipes to increase the concentration over time," he continued. 

The key draw of hydrogen is its cost-effectiveness at longer durations. For a completely resilient, 100% renewable data center with zero emissions, using hydrogen would translate to a levelized cost of electricity amounting to $119 per MWh, said Jack Brouwer, a professor of mechanical and aerospace engineering at the University of California, Irvine. Batteries, on the other hand, would lead to over $4,000 per MWh levelized cost to ensure 48 hours of backup power.

"Lithium-ion batteries are cheaper for short-duration storage, and they're more efficient. But eventually, when you have longer amounts of storage duration required, there will be a crossover point," where hydrogen becomes cheaper, Brouwer said. 

But taking a step back from the specific issue of replacing diesel back-up generators, regulators will need to resolve a broader set of questions around the future of the natural gas pipeline system, according to Mike Petouhoff, founder of consultancy firm One Grid Energy Solutions, . 

"Much thought has been put into the electric system, wind and solar, battery storage … I think we need to have a parallel discussion about the pipeline system and how these two interact," Petouhoff said, adding that this would include looking into options like biogas. 

'We need to prioritize renewable, zero-emission technologies'

Environmental advocates, however, are concerned about the possibility of continuing to rely on the gas system. All types of methane, including biomethane, have negative externalities, and cause the same problems inherent to any combustion-based fuel, said Lauren Cullum, a policy advocate with Sierra Club California, adding that research has indicated biomethane can only replace 13% of existing demand after two decades of ramping up supply production.

"Also, baseload generators or fuel cells are not a good solution to the back-up generation problem. We need to prioritize renewable, zero-emission technologies and relying on baseload generation will displace less carbon-intensive clean power sources from the mix," she said. 

The state could adopt a number of policies to promote the efficiency of solar and storage alternatives to diesel generation, said Ben Schwartz, policy manager at Clean Coalition. For instance, it could implement a feed-in tariff to incentivize local storage and renewables, streamline front-of-meter interconnection processes that currently have wildly different timeframes and costs, and create a standard value of resilience to properly evaluate microgrids. 

Another possibility raised during the workshop concerned integrating electric vehicles into the grid to provide back-up resiliency — an idea that is also being considered at the California Public Utilities Commission. 

"While this may be a solution a few years down the road, I think it's really important to begin working on that in earnest, because this is an opportunity to take a large resource adequacy asset and be able to repurpose it during blackout situations," said Robert Perry, an independent energy consultant working with the Climate Center and Vote Solar.