What role for hydrogen in data centre management?

With the dramatic increase in the use of artificial intelligence (AI) tools only set to accelerate, an associated increase in data centre capacity will be necessary. The US, China, and EU – as the leading hosts of most the world’s data centres – are all keenly aware of this fact and are positioning themselves accordingly. 

This not only means building them, but figuring out how to power them.

Traditional data centres require significant but predictable amounts of energy, but adding AI into the mix actually creates comparatively dramatic levels of variability in demand that further complicates the task at hand.

Therefore, as data traffic continues to grow exponentially, so does the urgency of powering data centres – leading to extreme growth in total energy demand. 

While the world reels from fast-moving geopolitical disruption, the threat of climate change has not gone away. The world must deal with this increase in energy consumption without falling back on its climate promises, less the gains we have made over the last two decades in renewable energy proliferation be for nothing. Moreover, those same geopolitical changes mean the security and resilience of both our energy system and our data are paramount.

Currently, data centres typically rely on utility grids for their primary electricity and diesel generators for backup power during outages. They already represent a substantial amount of total energy demand, as detailed in Hydrogen Europe’s report on the topic. As of 2024, Europe had over 1,400 installed, representing demand of 96 TWh (3.1% of Europe’s total power demand). By 2030, this could rise to 150-200TWh. Data centres in Europe are predominantly located in the FLAP-D markets (Frankfurt, London, Amsterdam, Paris, and Dublin), which are already suffering from grid congestion issues. In these regions the share of electricity going to DCs is disproportionately high: in 2023, data centres consumed 33% to 42% of all electricity in Amsterdam, London and Frankfurt – and almost 80% in Dublin.

Renewable and low-carbon hydrogen can offer a transformative solution for how data centres manage power, bolster resilience against outages – nefarious or not – and keep us on track towards carbon neutrality. 

Unlike diesel, hydrogen fuel cells provide a zero-emission alternative for both backup and potentially primary power. 

When we speak of resilience we mean the ability to maintain operations despite and during grid disruptions. This is naturally critical for data centres, where even seconds of downtime can cost millions and compromise critical services. Hydrogen fuel cells contribute to resilience in the short term by serving as backup generators, and are preferable to battery systems for their flexibility, long-term storage capacity, and lower set-up costs (for larger data centres, a battery capable of serving it would need to be equal or greater in size as the data centre itself).

In the longer term, as the supply of hydrogen grows, it can become a primary power option for data infrastructure – which means reducing the pressure of the grid it shares with regular businesses and private consumers. In fact hydrogen systems can be integrated into onsite microgrids, enabling facilities to operate independently of grid availability. This is particularly valuable in regions with unstable grids or extreme weather events that threaten power reliability.

This is more than fanciful concepts. Companies around the world are already working on these solutions. Microsoft has been one of the most visible leaders in hydrogen experimentation for data centres, having conducted multiple pilots showing hydrogen fuel cells can replace diesel generators for backup power. In one recent demonstration near Cheyenne, Wyoming, Microsoft and Caterpillar successfully powered a data centre for 48 continuous hours during a simulated outage using a 1.5 MW hydrogen fuel cell system paired with battery storage, proving both performance and durability even in harsh conditions. 

In Europe, NorthC has taken hydrogen implementation further by deploying fuel cells powered by locally produced green hydrogen at its Groningen data centre to replace conventional diesel backup systems. This makes it one of the first facilities on the continent to operationalise hydrogen as a standby power source.

Hydrogen adoption still faces challenges. Cost, infrastructure, and supply chain development remain hurdles. Green hydrogen production is still relatively expensive compared to traditional fossil fuels. Nonetheless, falling electrolyser costs and growing renewable capacity are gradually improving hydrogen’s prospects, but the sector must be supported by strong legislative and financial measures from the EU and its member states – and, of course, internationally. Building the infrastructure and supporting the production of hydrogen will provide us with a crucial tool for managing our data centre expansion.

Hydrogen is no distant vision for data centres. Microsoft and NorthC are just two examples highlighting the technology’s potential to grow the data centre sector in a resilient and sustainable manner. With continued innovation, supportive policy, and strategic partnerships, hydrogen could become a cornerstone of the data centre energy transition in the decade ahead.