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Microsoft is touting the use of fuel cells to power data centers, arguing in a paper released Tuesday that its studies find it a technology with much potential.

The paper, boldly titled "No more electrical infrastructure: Towards fuel cell powered data centers," investigates fuel cells as a centralized power source and as distributed power generation technology with fuel cells used at the rack or single server cabinet level.

But overall, use of the technology in data centers remains far from mainstream.

Sean James, a senior research program manager at Microsoft's Global Foundation Services and an author of the study, said in a blog post that he sees "tremendous potential" in fuel cells, though "deep technical issues" remain.

"Fuel cells are very clean, reliable and perfect for small form factor applications," wrote James. "By integrating fuel cells with IT hardware, we can cut much of the power electronics out of the conventional fuel cell system. What we are left with is a very simple and low cost data center and fuel cell system."

Technical issues, such as the fuel distribution system, power management and even safety training, remain to be resolved, he noted.

Nonetheless, James argued, in time, "you may end up with one someday delivering clean electricity and heat to your home" via fuel cells. Fuel cells, an electrochemical process to convert energy from hydrogen, natural gas, ethanol or biogas. The eBay facility uses biogas, which comes from agricultural waste.

The paper looks at running an entire data center on fuel cell technology and decoupling data centers from the electric grid. If fuel cells use natural gas, the buried lines delivering it are "not subject to severe weather."

Indeed, in a report released in August, the White House Council of Economic Advisors said severe weather is the number one cause of power outages in the U.S. The report added that "the number of outages caused by severe weather is expected to rise as climate change increases the frequency and intensity of hurricanes, blizzards, floods and other extreme weather events."

The council's report argued for increased spending on grid improvements.

Fuel cells are "much cheaper" than high voltage switchgear, transformers and copper cables, and have no moving parts, unlike generators, the Microsoft paper said.

If the fuels are distributed in a data center and placed at the servers and racks, "we can completely eliminate the power distribution system in the data center, including the power backup generation." If a fuel cell fails, it only affects a small part of the data center, the report said.

There's trade-off in cost with using smaller fuel cells to power individual pieces of equipment. Also, smaller fuel cells used at a server cabinet level may be unable to keep with an almost instantaneous rise in server load.

James said that fuel cells can double the efficiency of traditional data centers, and are also environmentally friendly, even when they use natural gas.

The cost benefits are a moving target, though the paper assumes that they will improve as the industry grows.

Fuel cells are seeing high growth, according to the U.S. Department of Energy, in a report last month. Total fuel shipments increased 34% in 2012 over 2011.

Approximately 30,000 fuel cell systems were shipped in 2012, up from 5,000 in 2008.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His email address is pthibodeau@computerworld.com.