AI’s Escalating Demands On Data Centers

Rapidly progressing AI initiatives coupled with new sustainability regulations have sparked increasing demand for computing power, distribution, and technology capabilities in data centers. Tech leaders are addressing these computing power demands by turning to advancements such as new cooling methods, semiconductors, power sources, digital twins, and internet-of-things (IoT) monitoring capabilities.

In light of these advancements and increasing demand from data centers, tech leaders are reassessing their data centers and looking to implement innovative approaches to meet power demands and sustainability goals.

The Transformative Potential Of Microgrids

One innovation gaining momentum to address increasing data center energy demands is the emergence of microgrids. Microgrids are local power systems that use renewable energy integration to allow for reliable and resilient energy operations. Accordingly, this allows organizations to meet their sustainability goals and can help reduce energy costs.

  • Optimized energy utilization: Microgrids facilitate the integration of various distributed energy resources (DERs) — e.g., solar, wind, and combined heat and power systems — to optimize clean energy supply, distribution, and efficiency, as well as reduce energy waste. Since microgrids are localized, they ensure that generated energy is utilized more efficiently, along with reducing transmission and distribution losses that are inevitable in traditional energy systems.
  • Sustainability and cost-savings: Through the integration of DERs, microgrids lower reliance on fossil fuels and decrease greenhouse gas emissions, ultimately contributing to sustainable energy goals. Additionally, harnessing the use of renewable energy sources can help reduce energy costs by avoiding peak electricity prices and lowering the constant dependency on the traditional power grid.
  • Enhanced reliability: Microgrids can operate both with the main data center power grid and autonomously, which enhances reliability by reducing the risk of outages and ensuring uninterrupted operations. The ability for microgrids to act autonomously allows for maintenance of continuous power to the localized area in the event of an outage, such as natural disasters or cyber attacks. This is critical infrastructure for services that require uninterrupted power supply.

Microgrids have already been adopted by numerous organizations, including The Home Depot, JFK Airport, Southern California Gas Company, Kaiser Permanente Richmond Medical Center, and the University of California San Diego, all of which are paving the way toward a more sustainable and resilient energy future.

This Is Just The Start

The implementation of microgrids is one innovation that organizations are turning toward to meet power demands, improve resiliency, and move closer to a more sustainable future.

Alongside microgrids, we have identified and discussed nine additional emerging innovations in the data center in our new report, Top 10 Emerging Innovations In The Data Center, 2025. This report dives deeper into innovations in types of cooling methods, semiconductors, power sources, digital twins, and IoT monitoring to meet changes in power demands, cooling needs, sustainability reporting, technology capabilities, local regulations, and performance requirements.

For in-depth insights into AI’s impact, data center trends, and sustainability strategies, Forrester clients can access our exclusive reports and set up guidance sessions to continue to explore current trends and solutions.