Smart grid ready UPS and energy storage systems contribute to more efficient and sustainable energy use and to system flexibility, enabling the integration of variable renewable energy resources.

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Data centers are responsible for about 1% of electricity consumption worldwide. Operators deploy uninterruptible power supplies (UPSs) in data centers to minimize disruptions caused by unstable electric supply, enhancing data center reliability. However, new technologies allow UPSs to interact with the electric grid, helping in the pursuit of a more sustainable data center.

Data centers and smart grid ready UPS technology

The Omdia article “Data centers: Energy consumption is all about workloads” highlights the importance of understanding workloads, their management, and their impact on energy consumption. In data centers, IT equipment is energized through UPS systems to reduce the risk of failure. UPSs have evolved to attain high efficiency, smaller footprints, improved battery energy storage systems, and monitoring. Today, UPSs are even capable of interacting with the electric grid.

Key messages

  • New technologies enable the smart electric grid.
  • Smart grid ready UPSs and energy storage systems contribute to more sustainable data centers.


Data center managers and operators have decisions to make about UPS strategies. First, awareness must be created to understand smart grid ready UPSs. These should be considered alongside a holistic view of the organization when determining the long-term data center strategy.

New technologies enabling the smart electric grid

The electric grid

The electric grid comprises transmission lines, substations, transformers, and other components to deliver electricity from the power plant to the user. It is commonly referred as “the grid.” New technologies in equipment, batteries, automation, metering, and monitoring are enabling the smart electric grid. Smart grid is the capability to allow for bidirectional interactive sensing and communication between the utility and the users or between suppliers and consumers. This represents a huge opportunity for distributed energy resources to contribute to the grid, including UPSs and battery energy storage systems (BESS).

UPSs with such capabilities are commonly referred to as smart grid ready, grid interactive, distributed energy resources (DER), or UPS as a reserve (UPSaaR). We will refer to them as smart grid ready UPS for in this article. Based on the current operations, priorities, and opportunities in the data center industry, we expect it to be an important arena for smart grid ready UPS.

Energy storage systems contribute to the integration of renewable energy resources

The battery industry is evolving, disrupting the energy sector. Advancements in battery energy density and footprint, including technologies such as lithium-ion, have transformed the market for consumer electronics and electric vehicles. Tesla has revolutionized how we see large-scale battery energy storage with Megapack, which reaches megawatts hours (MWh). Megapack can also connect to renewable energy sources. Tesla also offers advanced monitoring and an AI-enabled platform for energy trading to control and monetize these batteries.

The integration of renewable energy sources into a more dynamic electric grid can benefit from energy storage systems, which can help to balance energy supply and demand. Energy storage systems allow for the storage of electricity if renewable energy provides more than the system needs and then supplies it when the electricity generation is low. Policies for clean energy technology deployment, including electric vehicles and energy storage, have resulted in significant progress in this arena.

Batteries with lithium-based chemistries are currently the fastest growing energy storage technology owing to the technical benefits and significant price reductions. Lithium-ion batteries offer improved performance, higher energy density, faster recharge times, a longer lifecycle (8 to 10 years), higher operating temperatures, lower weight, and a smaller footprint.

Data center and smart grid ready UPS

In data centers, IT equipment (servers, storage, and switches) is energized through UPS systems, which condition the power line and protect against power disturbances, including interruption, undervoltage, overvoltage, flicker, transient events, and harmonic distortion. UPS systems need to be operated and maintained properly to increase reliability, reducing the probability of failures. For typical applications. UPS batteries are used only in case of a power outage. Enabling the UPS to interact with the electric grid is a new approach for the data center industry—one from which it can reap substantial benefits.

Smart grid ready UPS and energy storage systems contribute to more sustainable data centers

Smart grid ready UPS technology is the next step

Manufacturers including Schneider Electric, Vertiv, and Eaton are already providing smart grid ready UPSs. Figure 1 shows a smart grid UPS block diagram, where the bidirectional arrows indicate that energy can flow in any direction depending on the application. We can summarize different modes of operation: standard operation, energy demand management, fast frequency response, and contributing to the grid.

Figure 1: Smart grid ready UPS block diagram Figure 1: Smart grid ready UPS block diagram Source: Omdia

Standard operation: The UPS and BESS provide the required energy to the critical load to prevent downtime in case of power outages or other power disturbances. A generator can be part of the solution depending on the duration of the power failure. Therefore, most of the time under grid or generator operations, the BESS is not used; this can be interpreted as an underutilized resource. With smart grid ready capabilities for the UPS, resource utilization can be improved with other modes of operation. Nonetheless, it is important to keep reliability in mind, and the UPS system must protect the critical load with the required runtime in case of a power failure.

Energy demand management: In this mode of operation, we consider the modification of the user demand for energy in order to reduce, flatten, or shift it. We take advantage of the UPS and BESS to supply, totally or partially, the energy required by the load considering the grid. This mode of operation benefits the power grid stability because the user’s energy demand is reduced. In addition, the BESS can recharge when there is low demand with lower energy prices. Peak energy shaving is a common application, where the amount of energy purchased from the utility is reduced during peak hours of energy demand, a time usually linked to higher prices.

Fast frequency response: The use of variable renewable energy sources, such as solar and wind, comes with additional challenges to grid stability. The balance of the energy supplied and the energy consumed can affect the frequency of the power systems. Another application is fast frequency response, collaborating with the integration of renewable energy. The fast-responding BESS can contribute in real time to the grid frequency stability.

Contributing to the grid: This technology enables the UPS and BESSS to supply energy to the grid, working as a bidirectional power converter. They can be part of the distributed energy resources connected to the grid in configurations such as microgrids. This concept provides a decentralized, modular, and more flexible solution, where the resources are closer to the load they serve. Sometimes it is referred to as a distributed energy storage system (DESS). Government, regulation, and standards play a key role as there are specific technical requirements to comply with.

In summary, smart grid ready UPSs and BESSs contribute to more efficient and sustainable energy use and to system flexibility. Energy demand management and energy storage are technologies that enable the integration of variable renewable energy resources.


Further reading

Data centers: Energy consumption is all about workloads“ (June 2021)


Moises Levy, PhD, Principal Analyst, Cloud and Data Center Research Practice