AI - The AI Supply Chain - Part 4 - Data Center Power - Power Components Beyond Generation
- brencronin
- May 5
- 7 min read
The initial article in this series on data center power focused primarily on energy generation, such as onsite gas turbines. However, power generation is just one piece of the broader data center power supply chain. This article explores additional critical power components in the data center, starting with utility power delivery or onsite generation. While not exhaustive and somewhat simplified, the article highlights key data center power components and explains their critical roles in power delivery in a clear and easy-to-understand way.
Data Center Power and Transformers (Xfmr)
Power to a data center typically comes from the local utility provider or through on-site generation. When sourced from the utility, power is delivered at either high voltage (>100 kV) or medium voltage levels, depending on regional infrastructure. Due to the enormous power demands of modern hyperscale data centers, facilities often require an on-site substation to step voltage down from high voltage (HV) to medium voltage (MV) levels. If no suitable substation exists, the data center operator must either construct one or fund the utility to do so.
These substations rely on step-down transformers, which reduce voltage from something like 230 kV to 33 kV while increasing current, from around 350 amps to over 2,500 amps. A step-down transformer achieves this by using electromagnetic induction between two windings, where the secondary coil has fewer turns than the primary, lowering the output voltage. This technology is critical, hence the saying in AI infrastructure circles: "Transformers are needed to run transformers."
The phrase refers to the dual meaning of "transformer":
Electrical transformers
AI Transformer models, a foundational neural network architecture introduced by Google in the 2017 paper "Attention Is All You Need". These models revolutionized natural language processing and rely on the concept of attention to transform input sequences into contextualized output sequences.
Beyond AI, transformer infrastructure remains a foundational element across the entire electrical grid. You can think of transformers as both "the cans on the poles" and "the green boxes on the street". However, the transformer supply chain is under major strain. Transformers are often custom-designed to meet the specific voltage and distribution characteristics of local utilities, and their production is bottlenecked by the availability of key materials, especially grain-oriented electrical steel (GOES).
In the U.S., Cleveland-Cliffs is one of the few producers of GOES. Its CEO, Lourenco Goncalves, recently appeared on Jim Cramer's show, highlighting the vulnerability of domestic manufacturing to free trade and cheap imports from China:
"In 2024 we didn’t have a business—we had a terminal patient dying a death by a thousand cuts."
This quote underscores the fragile state of critical infrastructure supply chains, which are increasingly relevant as data centers grow in scale and complexity.
Automatic Transfer Switches and Diesel Backup Power in Data Centers
After utility power enters the data center, it flows through an Automatic Transfer Switch (ATS), a critical component in power distribution. The ATS continuously monitors the primary power source (the utility grid) and automatically switches to a backup source (typically diesel generators) if an outage or disruption occurs. Because utility power can and does fail, data centers must have a robust contingency plan for maintaining operations during extended outages.
The most common emergency power solution is diesel-powered backup generators, which differ from the natural gas turbines sometimes used for primary on-site generation. These diesel generators do not run continuously; instead, they remain in standby mode and are tested periodically, usually for short durations once a month, to ensure both the generator and ATS function correctly.
These large generators and their fuel tanks are typically installed outside the data center building. Most setups include enough diesel fuel on-site to support operations for 24 to 72 hours. To extend that window, data center operators maintain fuel delivery contracts with diesel suppliers to replenish tanks during prolonged utility outages.
Leading manufacturers of diesel generators include Cummins, Caterpillar, and Generac, while popular ATS vendors include Eaton, ABB, APC, Siemens, Generac, and Kohler.
Uninterruptible Power Supplies (UPS)
Because diesel generators take several minutes to start, data centers rely on Uninterruptible Power Supplies (UPS), banks of high-capacity batteries designed to constantly deliver power even during utility outage and load transfer to diesel generators. Most utility disruptions last only a few minutes, so in many cases, the UPS handles the entire event without ever needing to start the generators. Generators serve as a backup for longer-term power interruptions.
A UPS system includes several key components:
Battery Bank: Typically composed of lead-acid or lithium-ion batteries. You can think of it as a large, industrial-scale version of car batteries.
Inverter: Converts DC power from the battery bank into AC power, which is the standard for most data center equipment. However, newer data center designs increasingly favor direct DC power for improved efficiency and fewer conversion losses.
Rectifier: Converts incoming AC power to DC to keep the batteries charged.
Static Bypass Switch: Utility power flows through the UPS before reaching the servers, offering “clean” power that filters surges and voltage irregularities. If the UPS fails or requires maintenance, the static bypass switch instantly redirects the power load to the main utility feed. Unlike mechanical Automatic Transfer Switches (ATS), Static Transfer Switches (STS) use solid-state electronics for faster, sub-cycle switching.
Power Delivery to the Racks
The final stage of the data center power chain is delivering electricity to the racks that house servers, network switches, and other critical gear. To ensure power redundancy, each rack is typically served by two independent power sources, commonly referred to as the A-side and B-side.
This redundancy is achieved by using separate UPS systems and power distribution paths for each side.
There are two common methods of power distribution to the racks:
Overhead Busway: A metal-encased conductor runs above the racks, allowing flexible and efficient power delivery. Each rack taps into the busway to draw power, simplifying changes and scaling.
Power Distribution Units (PDUs): Power cabling is run from centralized PDUs to serve a row or section of racks. These PDUs are typically floor-mounted and distribute power through electrical circuits routed to each rack.
Inside each rack, two vertical rack-mounted power strips, one for each side, distribute power to the equipment:
The A-side power strip is installed on one side of the rack.
The B-side power strip is installed on the opposite side.
This dual-source setup ensures that even if one power path fails (UPS, circuit, or PDU), the other continues to support the rack without interruption.
Note: While the diagram only shows PDUs and server racks with redundant power, redundancy is built throughout the entire system, including utility connections, transformers, transfer switches, generators, and other critical components.
Direct Current (DC) Power in High-Density Racks and Data Centers
As data centers continue to push the limits of power density and performance, many operators are revisiting Direct Current (DC) power as a more efficient alternative to traditional Alternating Current (AC) power delivery. The goal: support higher concentrations of high-performance servers and GPUs per rack while minimizing space, heat, and energy loss.
While it may seem like a modern innovation, DC power isn't new. It has long been the standard in telecommunications central offices, where equipment ran on DC for reliability and efficiency. In fact, during my early career installing telecom gear, everything ran on DC power. Later, in smaller lab data centers, I assumed AC was the norm due to its ease of use and lower upfront costs for off-the-shelf servers.
However, as modern data centers face increasing demands for efficiency, power density, and thermal management, the case for DC power is stronger than ever. For example, Google powers its data centers with 48V DC, allowing them to more effectively deliver between 10 kW and 100 kW per rack.
One of the major benefits of DC power is its reduced energy conversion loss. In traditional AC-powered setups, electricity goes through multiple conversions:
From AC (utility) to DC (UPS battery bank),
Then back to AC (to power servers),
And often again to DC (inside each server’s power supply unit).
There is also a growing use case for Direct Current (DC) power in data centers that are developing on-site power generation and microgrids. Many of these sources, such as hydrogen fuel cells and other alternative energy systems, have the capability to produce power in DC. In these scenarios, electricity can flow directly from generation to servers without any conversion, reducing complexity, energy loss, and infrastructure requirements.
Each conversion wastes energy and produces heat, requiring additional cooling infrastructure. DC-powered architectures simplify this chain by reducing conversion steps, thereby improving overall efficiency. This directly impacts a key data center efficiency metric: Power Usage Effectiveness (PUE).
PUE = Total Facility Energy / IT Equipment Energy
A PUE of 1.0 is ideal, indicating that all consumed energy goes directly to IT equipment.
Higher values reflect inefficiencies due to cooling, lighting, and power conversion overhead.
DC Power Delivery to Racks
There are multiple approaches to delivering DC power to server racks, each aiming to improve efficiency and power density.
Rack-Level AC to DC Conversion
In one approach, AC power is delivered to the rack, where it is converted to DC using a rectifier mounted at the top of the rack. This rectifier supplies power to a DC bus bar running inside the rack. Equipment within the rack is then connected directly to this internal DC bus. While effective, this method still involves on-site AC to DC conversion, which introduces some power loss and heat.
Direct DC Power Distribution
In a more advanced model, DC power is delivered directly to the racks via a centralized DC bus bar. Each rack taps into this bus to receive power, which is then distributed internally through the rack's own DC bus bar. This approach eliminates the need for AC/DC conversion at the rack level, reducing power loss and improving efficiency.
Other examples of Advancements in Rack Power:
Vertiv PowerDirect is an example of this evolution, offering up to 132 kW per rack. Its high performance is achieved through a 1U high-density 50V DC power shelf that minimizes conversion losses and heat generation.
Microsoft is pushing the envelope further, targeting 500 kW per rack by 2030, and aiming for 1 MW racks beyond that. Their Mount Diablo system uses a sidecar power rack design to disaggregate power components from the IT rack. It converts AC inputs into 400V DC, enabling higher power delivery with greater efficiency.
References
Medium Voltage vs. High Voltage Explained:
Transformer supply bottleneck threatens power system stability as load grows:
U.S. Power Sector Trade Groups Flag Critical Electrical Steel Crunch:
Cleveland Cliffs:
Tranformers:
War of the Currents:
Uptime Institute Data Center Tiers:
Datacenter Anatomy Part 1: Electrical Systems:
Gigawatt Dreams and Matroyshka Brains Limited By Datacenters Not Chips:
Meta Datacenter Scrapped, Vertiv, Schneider Electric, Eaton, Legrand, Delta, Datacenter Bill Of Materials By Component, Transformers, Switchgear, Redundancy, UPS, OCP Busbar, Generators, Substation:
Low voltage panels and switchboards:
Hyperscalers prepare for 1MW racks at OCP EMEA; Google announces new CDU:
What is a rack PDU?
DC Power from Vertix:
DC distribution - the second coming:
Google Power usage Effectiveness (PUE):
Vertiv launches its Busbar Power Distribution System:
Vertiv PowerDirect Rack:
Mt Diablo - Disaggregated Power Fueling the Next Wave of AI Platforms:
Data Center certified professional:
Commentaires