Data centres are locking in deals with suppliers, as H2 projects struggle to get off the ground, writes Stefan Krumpelmann
The global hydrogen sector is not short of problems that are keeping it from lift-off. To that list can now be added a surge in competition from data centres for clean power, key equipment and engineering services.
For some technology providers in the hydrogen sector, the big data boom presents opportunities. Fuel cell manufacturers say they are seeing interest in back-up power from data centre operators, for example. But there is growing consensus that data centres will outcompete hydrogen projects for key resources.
Power — especially from renewables or nuclear — is the most obvious area of competition. While hydrogen projects struggle to get off the ground for a multitude of reasons, data centres are gobbling up large amounts of power under long-term contracts. Over the past month alone, US technology giant Meta has signed deals for 650MW of solar power in Texas and Kansas from utility AES and 1.1GW of nuclear power from utility Constellation, while entering a co-operation agreement with Houston-based XGS Energy to develop a 150MW geothermal project.
Rising power demand and prices have held back numerous US electrolysis projects, electrolyser and fuel cell maker Bloom Energy's executive vice-president and chief commercial officer, Aman Joshi, said last year — before the US hydrogen sector was rocked by President Donald Trump's return to the White House.
Such competition is increasingly evident elsewhere too, including in Latin American countries with high hopes for hydrogen, but where progress has been sluggish. "If hydrogen doesn't take the renewable power from LatAm, data centres and crypto will," Inter-American Development Bank's lead energy specialist, Christiaan Gischler, said at last month's World Hydrogen Summit in Rotterdam.
Electricity prices for renewable hydrogen projects that are planning to draw on grid power have shot up because data centres will pay more, Australian developer InterContinental Energy's chief executive, Alexander Tancock, says.
Global data centre power consumption could more than double to 945 TWh/yr by 2030 from about 415 TWh/yr as artificial intelligence use grows rapidly, Paris-based energy watchdog the IEA said in April. Much of this rise would be driven by the US, where data centre demand could eclipse the power consumption of all energy-intensive industries combined by the end of this decade, the IEA forecasts.
Big data's growth could make it harder to secure key equipment too. Lead times for key items have already lengthened as equipment is reserved for data centre installations, engineering, procurement and construction firm Black & Veatch's senior vice-president and managing director for Europe, Middle East and Africa, Youssef Merjaneh says. Major manufacturers' order books are full until 2028 for equipment such as switchgears, transformers and gas turbines, he says.
Developers are feeling the pinch. Transformer lead times have risen to three years from two, France-headquartered Lhyfe's manager for the Benelux region, Adriaan van Hoeken, says.
A skilled worker shortage could be another hurdle. Only a fraction of announced hydrogen projects will be built, at least in the near term, which could alleviate previous concerns about staffing bottlenecks. But the workers might instead be needed elsewhere, such as in data centre development. Merjaneh estimates that 35-40GW of data centre additions are planned until 2030, while existing engineering capacity would only support 10-15GW.
