SPOTLIGHT! 2023
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WASHINGTON GAS Optimizing Low Carbon Energy Portfolio Solutions for Data Centers STUDENT TEAM: Gabriel Correa - Bachelor of Business Administration/Master of Supply Chain Management Allen Zhao - EGL (BSE & MSE Materials Science & Engineering) PROJECT SPONSORS: Mallik Angalakudati - Senior Vice President, Strategy and Innovation Amit Nagpal - Director, Strategy and Innovation FACULTY ADVISORS: Christian Lastoskie - College of Engineering Vijay Pandiarajan - Ross School of Business
WASHINGTON GAS is a regulated natural gas utility that has been providing safe and reliable energy to residential, commercial, and industrial customers throughout Washington D.C. and parts of Maryland and Virginia for 175 years. Washington Gas is currently undergoing a transformation to decarbonize its operations and align with the global shift towards clean energy. The company has identified an opportunity to serve an energy-intensive hyperscale data center campus customer by providing a pathway to a reliable low-carbon energy portfolio. The goal is to leverage the company’s existing expertise and infrastructure in renewable natural gas distribution to offer low-carbon energy solutions to the customer. Given the favorable regulatory landscape, Washington Gas is developing a framework for investment strategies in hydrogen and other energy alternatives, based on market opportunities and risks. The Tauber team was tasked with assessing the landscape of low-carbon energy sources and evaluating optimal methods to leverage these technologies in order to generate reliable, low-carbon energy solutions to serve the regional data center market. This required an analysis of the hydrogen production and stationary power generation value chain, and exploration of regulatory policy and incentives.
TAUBER INSTITUTE FOR GLOBAL OPERATIONS // TAUBER.UMICH.EDU
WASHINGTON GAS
The efforts of this project helped Washington Gas have a better idea of how to serve this specific demand segment with production designs that better suit the customer profile. The Tauber team demonstrated that Washington Gas has the ability to provide this data center customer with reliable low-carbon energy for a considerably lower cost than initially expected. The energy solution proposed by the Tauber team will reduce operational costs, and lower the capital expenditure by roughly $200 million. The use of renewable natural gas in tandem with innovative production models will help Washington Gas serve this customer segment, along with other potential customers in industries that are hard to decarbonize.
