The Wyoming Business Council board of directors voted Tuesday to recommend approval of a grant to help bring an experimental fuel-cell-powered data center to Cheyenne.
The board approved a $1.5 million grant application from the city of Cheyenne's Board of Public Utilities, which would fund construction of city-owned transmission lines leading from a city water reclamation facility to a fuel cell and then to a small Microsoft data center. The project is expected to cost just more than $8 million.
The center would be used largely for researching whether energy-intensive industries can operate facilities entirely on gas-based power sources.
"This is a unique economic development opportunity," Dave Simonsen, the council's community facilities program manager, told the board. "This project helps to put Wyoming on the leading edge of integrating fuel-cell technology."
The project will bring together Microsoft; Cheyenne Light, Fuel and Power; Fuel Cell Energy; the Western Research Institute; and the University of Wyoming.
Microsoft plans to build a small data center near the city's Dry Creek Water Reclamation Facility. The center would be powered entirely by a gas-burning fuel cell.
The cell will burn natural gas supplied by Cheyenne Light for about a month before switching to methane, a gas generated by the reclamation facility's biodigester.
The fuel cell unit would provide about 200 kilowatts of electricity to the data center and send another 100 kilowatts back to the water reclamation center, helping to cut the city's costs.
Microsoft will test the reliability of the model for 18 months as a way to figure out whether similar but larger systems would be an efficient way to power its data centers.
Sean James, a company representative who spoke to the board, said the technology has potential for expansion, especially in states like Wyoming.
"It puts states like Wyoming with abundant supplies of natural gas in a very good position for all new data centers looking to utilize this type of design," he said.
Other involved parties also hope to benefit from the project. The University of Wyoming is expected to supply real-world usage to the data center, and the Western Research Institute will conduct active research at the site. Don Collins, chief executive officer of the institute, said the project also shows potential to produce carbon dioxide, which could be used to boost oil production around the state.
The grant funds will help finance construction of pipelines to transport gas from the Dry Creek facility to the fuel cell and electrical infrastructure to transport power. Microsoft will match about one-third of the grant, and the software giant and Fuel Cell Energy will combine to pay the remaining $6 million in project costs.
The grant comes from the Business-Ready Community Grant and Loan Program, a $69 million fund filled by regular state appropriations. The program is meant to provide a funding option to build publicly-owned infrastructure which could spur economic development.
In order to proceed, the grant must be approved by the State Loan and Investment Board at a December meeting. If the board gives the OK, Microsoft expects to construct the data center in about two months and operate it by next summer.
"One of the exciting things about this from our perspective is the potential use of stranded gas," Simonsen said. "We obviously have an abundance of that. The potential for any large industry energy-user [to use the technology] is unlimited, if this energy proves successful."