“Data center operators value sustainability”

Tobias Heyen has been working in the energy industry for 20 years, always with a focus on trading and energy management. At Engie, he now serves as Head of Origination in Germany, serving as the interface between generation and customers. At the networking event The Blue Beach in Hamburg on June 26, he will be speaking in the panel "Sustainable Power for the Digital Future: Green Solutions for Data Centers": discussing the challenge of satisfying data centers' growing energy needs from renewable sources – and the opportunities this new market presents. He explains the background in this RENEWABLE ENERGY interview.

Shortly after you initially became head of the Renewables Origination Platform Germany at the end of 2022, Engie announced the signing of a ten-year power supply agreement for a planned massive photovoltaic park with the global computing capacity provider Digital Realty. In April, you presented the future heat supply for a Berlin neighborhood using waste heat from a data center. Will electronic data processing go green so quickly?

Tobias Heyen: The energy industry has been undergoing fundamental change for years. The increasing feed-in of renewable energies into the grid, the high demand for flexibility and storage, the growing use of green gases, and the sustainability requirements of industry and municipalities have been on our minds for years. However, we are currently seeing another immense change coming our way: the rapidly increasing use of artificial intelligence (AI). AI systems require immense computing power to execute complex algorithms and data processing, which in turn results in high energy consumption. According to Bitcom/Borderstep, data center capacities are expected to triple worldwide between 2022 and 2030. Germany is positioning itself as the largest data center location in Europe. For us in energy management, the question here is: how green is intelligence and what will intelligence cost in the future? This is where we come in to find sustainable solutions for data center operators.

How do sustainability and AI fit together?

Tobias Heyen: Data center operators place great importance on sustainability. As a pioneer, Digital Realty set ambitious, science-based emissions targets in 2020, the first global data center provider of its size, with the Science-Based Target Initiative (SBTi). This includes a commitment to reduce Scope 1 and 2 emissions by 68 percent by 2030...

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… i.e., the company's own direct greenhouse gas emissions as well as CO2 emissions from externally purchased energy supplies…

Tobias Heyen: ...and reduce Scope 3 emissions ( indirectly caused by suppliers ) by 24 percent. Renewable energies are a key component in achieving these goals. With Digital Realty, the world's largest provider of cloud- and carrier-neutral data center, colocation, and interconnection solutions, we signed a ten-year PPA two years ago, before the extent of the AI ​​trend became apparent, which helped support the construction of a ground-mounted photovoltaic project.

Your goal at Engie is to provide a reliable supply of green electricity through power purchase agreements. How do volatile renewables fit with the relatively constant power demand of data centers? Does storage play a key role here, or do you utilize other market instruments?

Tobias Heyen: Storage alone isn't enough. With so-called hybrid PPAs, which have been increasingly negotiated in recent times, these power purchase agreements, with contracts for the supply of electricity from onshore solar and wind power plants or even from offshore wind farms, aim to complement the generation of wind and solar power. Storage is the next iteration, which can be used to shift solar power peaks to later times in this hybrid supply profile or to better adapt to the consumption curves of data centers.

What role do hybrid parks play in this marketing concept: wind turbines and photovoltaic systems at one location and at one feed-in point?

Tobias Heyen: Hybrid parks remain relatively rare. More important are hybrid supply structures, PPAs for a PV park here and an onshore wind farm there. And we, as midstreamers or aggregators, have the capabilities to resell this bundled energy to our customers. Such combinations will certainly become even more important for supplying data centers in the future.

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Can you ensure a green energy supply around the clock?

Tobias Heyen: A 24/7 green power supply doesn't necessarily mean that the supply is exclusively secured through PPAs from solar, wind, and perhaps storage. Rather, the share of green electricity purchased from the grid also counts. Important in this context is the Carbon Free Energy Score, or CFE score, which measures the proportion of energy a company obtains from carbon-free sources every hour of the year. It shows how well actual electricity consumption matches the availability of clean energy—the higher the score, the closer energy consumption is to a completely emission-free supply in real time.

In light of the need for decarbonization, many data center operators are setting individual targets to achieve high CFE scores. These voluntary initiatives aim to make data centers' electricity consumption more climate-friendly – ​​ideally within the framework of a 24/7 carbon-free energy supply. We see this as an opportunity, especially for data centers that will then be major end users – let's keep in mind that a medium-sized data center consumes as much electricity as a small German town. While we at Engie have also set ourselves voluntary targets on the path to climate neutrality, we naturally also want to support our customers in achieving their goals.

So supply contracts for green electricity will continue to be a focus of your activities in the future?

Tobias Heyen: I expect PPA supply to account for at least half of our electricity marketing. In addition to new generation plants, plants that are no longer subsidized will also remain in the system so that we can meet demand. In the future, the statutory development of feed-in tariffs in the Renewable Energy Sources Act will likely provide less subsidy and require more market regulation. This will enhance PPAs as a marketing tool.

And data centers will play a very large part in this?

Tobias Heyen: It can be assumed that data centers will also resort to PPAs as the demand for green energy increases.

Finally, another topic: According to the Energy Efficiency Act, data centers above a certain size are now required to increase energy efficiency and gradually utilize waste heat. Is this an issue for you?

Tobias Heyen: Our colleagues from other Engie divisions are indeed working intensively on concepts for utilizing waste heat from data centers. The major challenge is to combine heat sources and heat sinks in a cost-effective way. Engie is currently implementing the flagship project for "heating with data" you mentioned in Berlin together with Gasag. The newly emerging district, Das Neue Gartenfeld, will in future be supplied with heat from nearby existing NTT Global Datacenters data centers – it is a milestone on the path to decarbonizing Berlin's heat supply. With a heat output of eight megawatts from existing data centers, this project is one of the largest of its kind in Germany.

Tobias Heyen studied business administration at the University of Hamburg. He began his professional career in 2005 as a risk manager at Vattenfall in Stockholm before joining the energy supplier EWE in 2007, where he held various positions, including Head of Short-Term Trading and Head of Direct Marketing. In 2021, he joined the Engie Group (formerly GDF SUEZ), initially as Managing Director of Second Life Wind. Since 2022, he has been Head of the Renewables Origination Business Platform Germany, which connects renewable energy producers with industry.