Just because I have had a long utility career doesn't mean that I am inherently against self-generation - in fact I have represented both sides of the opportunity, both promoting co-generation and trying to thwart it.
And I think utilities are now in that gray middle area, wondering if distributed and self-generation can be implemented to their benefit, and even be a business opportunity.
For data centers though, I have consistently minimized the applicability of self-generation for what I think are sound reasons. Certainly, data centers (especially those without free-cooling) are an attractive load for generation, given an essentially unity load factor. That means a capital investment in generation equipment can be recouped quickly.
But on the flip side, there is no opportunity to easily use reclaimed heat (absorption chilling, anyone?);utilities offer their lowest rates to large, high load profile customers; and the reliability of rotary generation equipment of any kind doesn't come close to what data centers are looking for. (Even large-scale, sophisticated cogeneration systems typically require maintenance downtimes stretching into weeks per year).
So far, this doesn't sound like rethinking, does it? Well, what about a very high availability generation technology that could potentially supplant much of the typical power conditioning and delivery infrastructure in a data center?
If you had a technology that was in the three or four nines on availability, that could obviate the need for UPS and back-up generation, and at lower capital costs and ongoing cost savings, would you think again?
I'm starting to think that fuel cells may meet these requirements, especially in the server room and small data center market, and potentially even paired with container/modular data center units. Admittedly, the play may be for customers who need to add some additional capacity, and are staring down the high costs of adding support infrastructure for maybe one to ten racks. In that case, the fuel cell only has to have lower capital costs to be attractive, with the ongoing cost savings from lower energy costs simply icing.
Oh, and by the way, fuel cells can generally claim a significant environmental benefit compared to most forms of generation, and certainly when compared to the typical utility generation portfolio.
I haven't seen the economics yet, nor a demonstration case, but I expect there's something to the possibility, and I'm keeping my eyes on it.