Data center evolved to become large power consumers. Its supporting infrastructure, such as cooling and power distribution, consumes resources e.g. electric power and money. In fact, most money is spent on power conditioning and cooling systems. Therefore, the efficiency of data center and power quality are important topics and can be addressed by careful design. There is a need for research into application of innovative design and state-of-the-art technology for optimizing power supply in data centers. The paper investigates potential of a state-of-the-art technology such as solid state transformer (SST). The simulation proves that SST has potential to improve operational efficiency. SST shows better control of voltage, current and reactive power of the facility, eliminating need for additional devices such as power conditioners and reducing power loss. These results lead to the next stage of the project that involves developing an optimal data center design with SST and investigating data center potential in demand response applications.