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As microgrids go from niche to necessity in data center builds, developers face a series of implementation challenges

In most AI discourses, the technology and the gold rush around it hog all the limelight leaving the less glamorous realities behind it in the shadows. But, now as experts anticipate a data center energy crisis amid rapid infrastructure expansion, conversations are veering toward bring-your-own-power (BYOP) strategies, and all eyes are on small, independent power sources like the microgrid. 

“Microgrids are no longer viewed as small, niche systems. They are becoming increasingly standardized, modular, and scalable, capable of powering large data centers,” said Allan Schurr, chief commercial officer at Enchanted Rock (ERock), a data center power solutions company based in Houston, Texas. 

In the U.S., energy interconnection wait times reached five years between 2024 and 2025. Squeezed by the delay, many developers are pivoting toward on-site energy generation for which microgrids are ideal. Using microgrids, onsite power can be deployed on data center construction schedules, avoiding the backlog altogether. 

“[Microgrids] can fully support operations until the grid interconnection is complete,” Schurr said.

However, there are some key barriers to implementing microgrids that are often overlooked. A successful implementation begins with engineering design and modification to integrate the system with the existing distribution infrastructure. That in itself is a complex engineering process, considering the varying loads, generation sources, and existing energy grid.

An independent zero-carbon microgrid that is powered exclusively by renewable energies further requires a combination of complementary energies like solar, wind, and hydro for fall-back to meet all load requirements. 

Adding to the issue, there are currently no rulebooks or design standards to ensure microgrid islands continue operating uninterruptedly when disconnected from larger utility grids. The lack of clear regulatory frameworks also make it inherently difficult to build and operate microgrids.

Another issue is high upfront costs. According to the National Renewable Energy Laboratory, the cost of building a microgrid in the U.S. ranges between $2 million and $5 million per megawatt. Being complex, the systems also require ongoing monitoring, maintenance, and operational expertise which further add to the cost.

Some other challenges typical of large infrastructure projects include, coordinating permitting and interconnection requirements, planning for fuel supply, and aligning construction timelines with aggressive development schedules, Schurr noted.

Regardless, microgrids are increasingly emerging as the preferred alternative for providing reliable power access where it is needed. In markets facing multi-year utility constraints like data centers, they make an easy choice. “Microgrids are increasingly being integrated upfront versus as an afterthought because they are capable of supporting day-to-day operations, interacting dynamically with the grid, providing long-term backup power and complementing renewable energy resources,” Schurr told. 

The incremental investment associated with deploying onsite power is offset by the accelerated time-to-power that allows developers to dodge delays that impact revenue, customer commitments, and growth plans across the board. “Economically, the evaluation has expanded well beyond upfront capital cost. Developers are increasingly weighing the cost of delayed power availability against the value of bringing capacity online sooner,” he noted. 

As the technology matures, developers are investigating how to scale the infrastructure for supporting both immediate and long-term power demands. A major part of lowering the barrier to implementation and scaling microgrids is simplifying the ownership and operating model for large loads like data centers. 

“Historically, deploying onsite generation required organizations to manage a wide range of specialized functions internally — engineering, permitting, controls integration, fuel coordination, compliance, maintenance, and real-time operations. That level of complexity limited adoption,” he said.

Providers like ERock have brought to market integrated deployment models that combine engineering, construction, operations, and maintenance under one single framework, helping simplify execution and eliminate deployment risks.

Parallel to that, advances in controls, monitoring, automation, and predictive maintenance are making microgrids easier to operate and scale. Greater standardization is reducing the amount of customization work required from site to site, helping simplify deployment, operations, maintenance, and training, Schurr noted.

“Modern onsite power is becoming less of a bespoke infrastructure project and more of a standardized, repeatable platform that can be deployed consistently across sites and markets.”

For now, developers seem set on one thing: building a resilient, dependable power grid that can be scaled to support long-term growth. As Schurr put it, “The conversation today is less about whether microgrids are ‘worth it’ and more about how organizations balance timing, reliability, scalability, and long-term power strategy. For most data center developers, the starting point is reliable power that aligns with aggressive construction and commissioning timelines.”