Startup Planning 'Oil and Gas' Approach To Building Self-Powered Data Center Campuses

Top executives from two of the biggest names in the data center and power sectors have gone into startup mode, launching a firm they say will transform how the industry builds self-powered data center campuses.

Data center startup GridFree AI publicly launched last week, touting plans for modular, gas-powered data centers it claims will be cheaper, faster to build and use far less power than data centers connected to the grid.

Founded by former Talen Energy CEO Ralph Alexander and former Microsoft global edge operations head Patrick Yantz, the firm emerged from incubator Montauk Climate with $5M in initial funding from venture capital firms Giant Ventures and Amplo.

GridFree, as the name suggests, aims to deliver self-powered data centers that operate independently of the power grid.

That is hardly a novel concept in a data center industry that is increasingly turning toward on-site power generation as a means of circumventing constrained power grids. But GridFree’s leadership says it is taking a fundamentally new approach, with a modular design that not only integrates both gas power generation and data center buildings but uses the on-site turbines to deliver cooling to the data halls in a way that is more efficient than what can be done with grid energy. 

In an interview with Bisnow, Alexander said the firm is applying technologies developed by the oil and gas industries to data center design in innovative ways that address concerns around cost and efficiency that have hindered the adoption of on-site power. 

“It's a far simpler, integrated approach — the way the oil and gas industry would approach it — at scale and solving for things that haven't really been solved for,” Alexander said. “How do we deliver to that box that helps host GPUs, power and cooling in a way that it's never seen before?”

With yearslong wait times for electricity from utilities in most major data center markets, data center developers are increasingly pursuing projects that eschew grid connections in favor of power generated on-site or nearby, either as a permanent power source or as a temporary “bridging” solution until grid power is available. Today, this on-site power is almost always fueled by natural gas. 

Still, despite a handful of high-profile gas-powered projects, adoption of such on-site solutions to the sector’s power woes has been limited.

The Big Tech hyperscalers that are the largest data center users say they still prefer utility power to on-site power, citing concerns about reliability and high costs. Additionally, building and operating a utility-grade power plant in tandem with a data center campus requires expertise across separate sectors that few firms possess, making the execution of such projects difficult. 

GridFree’s co-founders say their track record and expertise in the data center and energy sectors put the firm in a position to address these barriers to adoption head-on.

Alexander, a longtime executive at BP prior to his tenure at the helm at Talen, said he and Yantz approached the data center sector’s power woes not as a real estate problem but as an engineering challenge. The result, he said, is an innovative system that can deploy powered data centers faster and at lower cost and operate them more efficiently than would be possible through grid power. 

GridFree has branded its data center platform as the Power Foundry, an end-to-end modular system that integrates power generation, power management and cooling systems, as well as the data center itself. The system is designed to be deployed in 100-megawatt “building blocks.”  

But the key differentiator for GridFree is in how its system cools the data centers, according to Alexander. In a typical data center, electricity is delivered to the building, where it is used to power computing equipment and cooling systems. In GridFree’s design, waste heat from the on-site power generation is repurposed to drive the data center’s cooling systems. 

Alexander said this approach is borrowed from the oil and gas industry and results in vast efficiency improvements, with 50% more power delivered to information technology equipment instead of cooling and up to a 40% reduction in carbon footprint compared to a grid-connected data center.  

“The Power Foundry is combining gensets and heat exchange and using cogeneration and heat in a way that hasn't been used typically in data centers today because they've been on the grid,” Alexander said. “When you do that, you literally fundamentally change lots of things — you don't need as much water, you don't need as much capital and you're getting your carbon footprint lower.”

Beyond improvements in energy efficiency, GridFree claims the Power Foundry platform will accelerate construction timelines by three to five years compared to grid-connected projects.

The firm also says the system reduces capital expenditures and operating expenditures by one-third compared to traditional data centers. Alexander said this is due to its modular construction eliminating the need for legacy infrastructure and simplifying construction and maintenance.

GridFree’s founders envision a business model in which the firm owns and operates its proprietary infrastructure, leasing out space to tenants. While GridFree has identified close to a dozen potential deployment sites, mostly in the southeast U.S., the firm hasn't yet entered into advanced discussions with end users. 

Alexander said the firm is in its early days, and its business model and product may evolve before its first data center is built.  

He said the data center sector can be surprisingly slow to adopt new technology. But he argued it has no choice but to eschew incremental innovation in favor of outside-the-box solutions like GridFree’s to overcome its increasingly acute power crisis and meet skyrocketing artificial intelligence demand. 

“It's time now to move from bespoke to really make it like a manufacturing business, versus just repeating what we've done,” Alexander said. “We’re trying to industrialize, to get this to a place where the best technologies from different industries — power, oil and gas, supply chain — can come together and think from the bottom up about how we’re going to deliver high-reliability power and cooling to these GPUs that are much more power-hungry without messing up the environment.”