Microsoft is in the early stages of researching this concept

Microsoft is looking to integrate fuel cells directly into racks in an effort to make data centers greener and less costly. 
A new Microsoft white paper shows that the software giant wants to put methane-based fuel cells to improve efficiency, cut total operating costs, and improve reliability by distributing risk.
Microsoft has found that placing fuel cells at the rack level would eliminate the need for power infrastructure like UPS units, generators and switch gear. Gas pipes for the distribution of fuel would replace these components.
According to Microsoft, this design cuts capital expenses by 16 to 20 percent, and also reduces operating costs by at least 3 percent. 
Another advantage is that if a fuel cell fails, it would only affect one rack instead of the entire data center. Conversely, using fuel cells to replace the utility feed, for example, would improve efficiency but allow a failure to affect the entire data center.

Sean James, Senior Research Program Manager for Microsoft Global Foundation Services, further states that the use of fuel cells at the rack level would “collapse the entire energy supply chain, from the power plant to the server motherboard, into the confines of a single server cabinet." 

“The main distinction between this data plant concept and previous architecture ideas is the notion of bringing the power plant inside the data center, instead of putting the data center in the power plant,” continued James. “A lot of energy is lost in today’s data center energy supply chain. We show how integrating a small generator with the IT hardware significantly cuts complexity by eliminating all the electrical distribution in the grid and data center.”

Microsoft is in the early stages of researching this concept, and said many issues need to be ironed out before it can be implemented, such as thermal cycling, safety training, cell conductivity, power management, fuel distribution systems. But it sees the use of fuel cells in racks as a promising future for greener and cheaper data centers. 

Source: Data Center Knowledge

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