How GCC Data Centers Plan for Power Failures

Power failures can cost GCC data centers up to AED 2.7 million per hour. Here's how they handle it:

• Backup Systems in Use:
  • Diesel Generators: Reliable but produce emissions.
  • Li-Ion Batteries: Instant power, limited runtime.
  • Hydrogen Fuel Cells: Clean energy but need infrastructure.
• Key Challenges:
  • Extreme heat increases cooling demands (70% of power use).
  • Grid instability and integrating renewables.
• Innovations:
  • Abu Dhabi's solar-battery project (5.2GW solar + 16GWh storage).
  • AI cooling in Dubai cuts energy use by 35%.

Quick Comparison:

Choosing the right system depends on your data center's size, budget, and sustainability goals.

Backup Generator in The Data Centre Industry

1. Diesel Generator Systems

Diesel generators play a pivotal role in addressing grid instability issues in GCC data centres, ensuring uninterrupted operations.

Uptime Performance

In the GCC, stationary diesel generators lead the market, thanks to their dependability. A great example of this reliability is Caterpillar's G3520K HR model, introduced in December 2024, which can reconnect to the grid in under five minutes.

Modern diesel systems now feature advanced remote monitoring capabilities, allowing operators to track:

While these systems excel in reliability, there are environmental concerns tied to their operation.

Environmental Impact

Despite their critical role, diesel generators contribute to environmental challenges. Data centres are responsible for about 3% of global emissions, with diesel backups being a significant contributor. To address this, many facilities in the GCC are turning to hybrid solutions that combine traditional diesel systems with cleaner technologies.

"There will be an increased focus on water usage, heat re-use, moving away from use of diesel generators, and making data centres an integral part of communities", said Ziad Al Bawaliz, president of Turkey, Middle East & Africa at Danfoss.

Operating Costs

The GCC diesel generator market is projected to grow by AED 1.14 billion between 2024 and 2028, with a compound annual growth rate (CAGR) of 5.56%.

• Operational Efficiency
  By integrating solar and battery storage, modern diesel systems can cut fuel consumption by 30–50%.
• Market Evolution
  Rising fuel prices and stricter emissions regulations are pushing data centres towards hybrid solutions, further supported by government-led clean energy initiatives.
• Technology Integration
  Smart monitoring innovations are improving generator performance. For instance, Claros, a data centre energy startup, secured AED 35.8 million in February 2025 to develop technology aimed at reducing energy waste and optimising efficiency for AI-driven workloads.

These trends highlight the growing interest in exploring alternative backup technologies to meet both operational and environmental demands.

2. Li-Ion Battery Banks

Lithium-ion battery banks are becoming a popular choice in GCC data centres, offering a more efficient and environmentally friendly solution for backup power.

Uptime Performance

Power failures account for 36% of data centre disruptions. To address this, lithium-ion systems deliver reliable and high-performing solutions:

One notable example is the implementation of Saft's Battery Energy Storage System (BESS), which has been replacing diesel generators since June 2023.

Environmental Impact

Lithium-ion technology provides a cleaner alternative to diesel generators, a crucial benefit for the GCC's sustainability goals. For instance, in May 2024, Digital Edge collaborated with Donghwa ES to create a Hybrid Super Capacitor (HSC) system, enhancing redundancy and reducing environmental impact.

Operating Costs

The cost of lithium-ion batteries has dropped by an astonishing 97% since their introduction in 1991. This price decline, coupled with operational benefits, makes them a practical choice for data centres:

• Long-Term Savings
  With an average lifespan of 15 years compared to just 5 years for VRLA batteries, lithium-ion systems significantly cut replacement and maintenance expenses.
• Market Expansion
  The data centre energy storage market, valued at AED 5.1 billion in 2023, is projected to grow to AED 8.5 billion by 2031, highlighting the rising trust in lithium-ion solutions.
• Cooling Efficiency
  These systems can safely operate at higher temperatures, reducing cooling demands and lowering operational costs - an essential feature for facilities in the GCC's harsh climate.

The adoption of lithium-ion solutions is on the rise, with market penetration predicted to grow from 10.6% in 2020 to 35% by 2025. Additionally, hydrogen fuel cells are being explored as a complementary technology to further enhance backup resilience.

3. Hydrogen Fuel Cell Units

Hydrogen fuel cells are gaining attention as a dependable backup power option for data centres in the GCC region. They stand out for their reliability and their ability to align with sustainability goals.

Uptime Results

In July 2020, Microsoft successfully powered 10 Azure data centre racks using PEM fuel cells for 48 hours straight. This test provided valuable insights into their performance and reliability.

These results highlight hydrogen fuel cells as a strong contender in the GCC’s backup power strategies.

Environmental Impact

Unlike diesel generators, which release harmful pollutants like NOx and SOx, hydrogen fuel cells emit only water and heat when powered by green hydrogen. This aligns with the region's broader push for clean energy, supported by major initiatives such as:

• NEOM's AED 18.37 billion green hydrogen plant in Saudi Arabia
• The UAE's AED 598.3 billion plan to invest in clean energy sources through 2050
• Saudi Arabia’s AED 684.7 billion pledge toward renewable energy projects by 2030

These efforts underscore the GCC’s commitment to reducing its carbon footprint while advancing its energy infrastructure.

Operating Costs

Hydrogen fuel cells don’t just offer environmental benefits - they also make financial sense. The global market for fuel cells in data centres was valued at AED 909.5 million in 2024 and is expected to grow to AED 2.92 billion by 2032. This growth reflects their increasing cost efficiency and reliability.

"In the future, data centers won't merely exist as isolated energy consumers on the outskirts of the power grid. Instead, they will seamlessly integrate, becoming essential components of the entire system. By embracing innovative approaches, harnessing cutting-edge technologies, and actively participating in demand-side management, data centers can contribute to a more sustainable, flexible and secure grid."

• Fabrizio Landini, Industry Network Leader for Data Centers at Hitachi Energy

Hydrogen fuel cells also compare favourably to other energy storage options:

• Higher energy storage density compared to lithium-ion batteries
• Longer operational lifespan than traditional battery systems
• Lower maintenance requirements than diesel generators
• Potential for government incentives tied to clean energy initiatives

Major players in the cloud industry, like AWS, are already planning to integrate hydrogen fuel cells into their data centres by 2025. This shift aligns with the region's sustainability goals, with the UAE and Oman targeting net-zero emissions by 2050, while Saudi Arabia and Bahrain aim for 2060.

System Comparison

Backup power systems vary in terms of upfront costs, efficiency, activation speed, environmental effects, and maintenance needs.

The table highlights the main trade-offs between these systems. Below, we dive deeper into their performance, cost, and environmental aspects.

Performance Metrics

When it comes to response time, both Li-ion batteries and hydrogen fuel cells activate instantly, making them ideal for critical applications that demand seamless power transitions. Diesel generators, on the other hand, require some time to start, which can be a drawback in time-sensitive scenarios. Li-ion systems particularly shine in rapid-response situations, ensuring uninterrupted power for sensitive operations. Hydrogen fuel cells offer comparable instant power delivery while maintaining steady output.

Cost Considerations

The UAE's uninterruptible power supply (UPS) market, valued at AED 103.15 million in 2023, reflects the region's significant investment in backup power solutions. Hydrogen fuel cells are priced similarly to diesel generators in terms of initial costs, but their fuel expenses can lead to higher operational costs. Li-ion battery systems, while carrying a higher upfront price tag, offer savings over time through reduced maintenance and lower operating costs.

Environmental Impact

Environmental concerns play a pivotal role in the GCC's energy strategies, especially given the region's high energy consumption - averaging 6,260 MWh per capita, the highest globally. Here's how the systems compare:

• Diesel Generators
  Diesel systems are known for their high emissions and require frequent fuel replacement and mechanical testing, adding to their environmental and operational complexities.
• Li-Ion Battery Banks
  These systems produce no direct emissions during operation and are less toxic compared to older battery technologies. Large-scale installations, such as the 300 MW facility at Moss Landing, California, demonstrate their scalability and effectiveness.
• Hydrogen Fuel Cells
  When powered by green hydrogen, these cells emit only water as a byproduct. This aligns with the GCC's renewable energy goals, which have seen remarkable growth - from 176 MW in 2013 to 5.6 GW in 2022.

Choosing the right backup power system involves carefully weighing performance needs, cost implications, and sustainability objectives. Each option offers unique strengths, making the decision dependent on specific priorities and long-term goals.

Recommendations

When deciding on backup strategies, data centre operators should consider the scale of their facilities and the specific challenges posed by their regional environment. Here's a breakdown of recommendations tailored to different sizes of data centres:

Small Data Centres (< 1MW)

For smaller facilities, Li-ion battery banks are the ideal choice. With costs having dropped by 85% and efficiency levels reaching 90%, these batteries provide a cost-effective and reliable solution.

Medium Data Centres (1-5MW)

A hybrid strategy works best for medium-sized centres:

• Primary Backup: Li-ion Battery Banks
  These batteries ensure near-instant power activation, keeping operations seamless during short outages.
• Secondary Backup: Diesel Generators
  Diesel generators offer extended runtime and have a proven track record for reliability. They also benefit from predictable fuel costs.

Large Data Centres (>5MW)

For larger facilities, a multi-tiered approach is essential to balance speed, sustainability, and cost:

• Li-ion Battery Banks: Act as the first line of defence, providing immediate power.
• Hydrogen Fuel Cells: Deliver clean and extended backup power, ideal for longer outages.
• Diesel Generators: Remain a dependable option for prolonged power needs, particularly where fuel cost stability is crucial.

Climate Considerations

Backup systems must also be designed to withstand the environmental challenges of the region, especially high temperatures. Operators should focus on:

• Implementing advanced cooling solutions, such as adiabatic-free cooling chillers, to reduce energy consumption.
• Ensuring redundancy in system design, with configurations like N+1, to handle failures effectively.
• Staying informed about changing environmental regulations and the increasing push for sustainable practices.

"We must now seize the opportunity to build smarter, more interoperable systems, and explore innovative regional solutions such as Power Pooling – made possible through digital platforms and real-time data coordination." – Deemah AlYahya, Secretary-General of the DCO

Budget Optimisation

Striking the right balance between performance and cost is key when planning a backup strategy. Consider the following:

• Li-ion Batteries: These are the most cost-effective option for short-term energy storage.
• Hydrogen Systems: While the fuel costs are roughly three times higher than diesel, they provide economic benefits for extended backup.
• Market Growth: With the GCC data centre market projected to grow at an annual rate of 12.4% through 2027, operators must invest in flexible and adaptable infrastructure to meet tightening sustainability requirements.

FAQs

What makes hydrogen fuel cells a more sustainable alternative to diesel generators for GCC data centres?

Hydrogen fuel cells offer a cleaner and eco-friendlier alternative to diesel generators for powering data centres in the GCC. While diesel generators release harmful pollutants like particulate matter and greenhouse gases, hydrogen fuel cells produce only water and heat as byproducts. This not only helps improve air quality but also significantly lowers the impact on the environment.

What makes hydrogen even more appealing is its potential to be sourced from renewable energy. When derived this way, its use results in minimal carbon emissions, making it a perfect fit for data centres looking to meet sustainability targets and cut down on their carbon footprint. As the GCC places greater emphasis on environmentally conscious practices, adopting hydrogen fuel cells aligns with the region's move towards greener energy solutions, ensuring a more resilient and sustainable future for the tech industry.

What are the cost and efficiency differences between Li-Ion battery banks and traditional backup systems for GCC data centres?

Li-Ion battery banks are gaining traction in GCC data centres, and for good reason. They bring better efficiency, a longer lifespan, and lower maintenance demands compared to traditional options like diesel generators. Another major plus? Their higher energy density, which saves space and aligns well with sustainability objectives - a key focus across the region.

That said, the initial investment can be steep, with costs ranging from AED 2,570 to AED 5,140 per kWh. Traditional systems might seem more affordable upfront, but they often come with higher long-term operational expenses, especially when you factor in fuel and maintenance.

Over time, the total cost of ownership for Li-Ion batteries tends to be lower. Their reduced maintenance needs and improved energy efficiency make them a smart, eco-conscious choice. Plus, as the GCC continues to prioritise sustainability, these batteries are becoming an increasingly attractive option for data centres aiming to balance resilience with environmental responsibility.

How do GCC data centers tackle extreme heat and power grid challenges?

GCC data centres are embracing advanced technologies and smart designs to tackle the challenges of extreme heat and unstable power grids. For instance, cutting-edge cooling methods like liquid cooling and air containment systems play a key role in keeping equipment at the right temperature despite the region's scorching heat. These systems not only ensure smooth operations but also improve energy efficiency. Additionally, many facilities are turning to modular designs, which allow for flexible expansion and make it easier to incorporate renewable energy solutions.

To strengthen reliability, data centres are turning to long-duration energy storage systems. These systems store excess energy during off-peak hours and release it when demand surges, ensuring a steady power supply even when the grid becomes unpredictable. Together, these approaches are helping GCC data centres operate more sustainably and reliably in one of the planet's toughest environments.

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