The generated AI boom is exacerbating the surge in data center building as companies scramble to meet demand for computing power. However, data centers are known to be energy-hungry, causing tension in the power grid and raise concerns about rising electricity costs. In the search for alternative energy sources, data center operators are exploring green hydrogen as renewable energy sources to help keep servers running in an environmentally friendly manner.
Green hydrogen is produced by electrolysis, a process that uses solar or wind power to cut water molecules into water molecules, making it a carbon-free fuel. Unlike traditional hydrogen production that relies on fossil fuels, green hydrogen emits oxygen only as a by-product. This makes it an attractive option for data centers, which requires stable and scalable energy to operate the servers it desires. Technology giants like Microsoft (MSFT) have tested hydrogen fuel cells in their data centers, while others are exploring hydrogen as part of their long-term clean energy strategy.
Green hydrogen joins the list of alternative energy sources that are turning to in more data centers. Some companies are reopening nuclear power plants to generate the large amount of energy needed to power AI workloads, while others are expanding their investment in solar and wind power. Unlike these intermittent sources, green hydrogen can provide off-grid, on-demand power, potentially providing a more reliable solution. However, the expensive costs and changing political landscape are adopted in a wide range of ways.
Hydrogen producers see increased demand
Green hydrogen manufacturers have increased their services as AI models continue to move forward. Q hydrogen, a green hydrogen production agent established in 1997, It is claimed it is receiving “extreme interest” from data centers because AI needs more computing power. CEO Whitaker Irvin Jr. Q Hydrogen Always discussing with developers who want to build data centers in states like Utah bases,,,,, Arizona, New Mexico and Nevada, including early conversations with tech giants like Microsoft. “In the data center, it's a very different world,” the CEO told Observer.
Later this year, Q Hydrogen plans to open its first commercial renewable hydrogen power plant in New Hampshire and claims to produce up to 100,000 kilograms of hydrogen fuel per day. Every day, this amount could fuel more than 20,000 Bits to Mirai, one of the few hydrogen-powered cars on the market.
If true, the power capacity of Q hydrogen may be the primary energy source in the data center. As a proof of concept, QH will begin powering mobile data centers, IT infrastructure units that can be deployed in remote areas using on-site, clean hydrogen-driven generators. Generators will keep the data center running 24/7, with a large data center requiring much less power required for hundreds of megawatts. Nevertheless, a successful pilot project means that, in theory, the company will be able to produce large quantities of fuel that can be distributed to centers offsite. Irvin Jr. claims that the potential of energy is “almost limitless.”
Luke Tenlent, senior director of product management, said plug-in power for hydrogen fuel cell developers is also in early conversations with data centers. Since its establishment in 1997, plug power supplies have been deployed 60,000 fuel cell system There are more than 180 gas stations around the world, with the aim of producing 500 tons of green hydrogen per day According to the company, by the end of this year.
Plug-in power supplies deliver green hydrogen to customers including Amazon and Walmart (WMT), which use proprietary Technology to convert hydrogen into liquid form that trucks move. With this transportation system, Plug Power sees a new opportunity to deliver hydrogen to off-site data centers to meet its soaring energy needs. In fact, commercialization began to become a reality. During the 2022 pilot project, Plug Power successfully built a 3-megawatt hydrogen fuel cell backup power plant for Microsoft in an effort to replace its backup diesel-powered generator.
“Data centers try to understand everything they can do to achieve the guarantee of power and how much they can decarbonize,” he said.
Clean hydrogen faces a tough battle
At the current stage of energy, some experts view green hydrogen as a reliable energy source for backup generators in data centers in case of extreme weather conditions such as thunderstorms or polar vortex currents that destroy the energy grid. Still, some energy suppliers didn’t see it immediately.
According to Chief Commercial Officer Allan Schurr, there is no so-called microgrid developers that provide backup power to infrastructure such as data centers, and there is no need for hydrogen fuel yet. Magic Rock has tested a mixture of natural gas, with up to 25% green hydrogen powering its microgrid to lower the carbon footprint of the energy. Despite its successful tests, transportation of green hydrogen and transportation on site is “very expensive,” Schurr said, meaning that expansion may not be feasible when data center operators can take advantage of cheaper natural gas energy.
“All our 350 microgrids can use these mixtures today, but no one chooses to pay a price premium for the fuel,” Schurr told Observer.
The price of green hydrogen can pose a significant challenge to widespread adoption. In the past, green hydrogen prices were expected to fall significantly due to increased demand and U.S. subsidies Bloomberg. But with changes in the U.S. federal landscape, BNEF's latest forecasts find that by 2050, the price of green hydrogen is between $1.60 and $5.09 per kilogram, with its previously estimated number exceeding three times. By contrast, traditionally made with natural gas, more carbon-intensive hydrogen fuels are expected to remain between $1.11 and $2.35 per kilogram for the foreseeable future.
Transportation infrastructure adds additional costs. According to Plug Power's Illent, gearboxes need to be built to connect them without interruption, which is capital-intensive and time-consuming. Current transmission lines can transfer natural gas to a small portion of green hydrogen mixed, but transporting consistent green hydrogen by itself requires different construction, materials and safety adaptations.
Political bottlenecks make the road to adoption more difficult. The Trump administration has Funds that are frozen indefinitely to reduce inflation bills are the main source of funding for what President Donald Trump calls a “green new scam.” Under the federal plan Clean hydrogen production tax creditproviding producers with billions of dollars worth of hydrogen per kilogram. Without funds, hydrogen producers may not be able to expand their fuel, which could increase costs.
Despite rising prices and political uncertainty, Irvin Jr. remains optimistic that green hydrogen will continue to be a promising source of clean energy. He claimed that data centers appear willing to pay premiums for alternative energy sources, as the demand for additional power will only continue to explode. He said the funding challenge inspired opportunities for “creativeness” and “innovation” to develop new solutions within its budget constraints. As for the IRA, the CEO bets that the hydrogen component will “still exist”, with the expectation of support from large power companies in the “conservative state” and “pragmatists in government.”
All the hydrogen experts who spoke with observers agreed that despite the challenges of roads adopted by roads to data centers, green hydrogen still has the potential to scale up with the mature market and production technology, although it won't be overnight occur.
As for Irvin Jr.
