The “greening” of IT has become a focal point of public and industry attention, debate and innovation given the increasingly rapid advent of digitally-connected, post-industrial societies, or pockets of society in nations around the world. At the heart of this emerging, network-centric human environment are data centers, which are assuming aspects of public utilities due to the voracious demand for data and information.
Electric power usage is a major operating cost for data centers, and data center power usage is growing rapidly, fueled by a confluence of powerful trends, including the rapid growth of smart grid systems, cloud computing, and the proliferation of connected consumer electronic (CE) devices. Rising power demand has data center operators, a group that includes many of highest profile names in the IT and telecoms industries, aggressively searching for ways to reduce electricity use. Adding significantly to this impetus are national and international policy initiatives that aim to reduce carbon dioxide and greenhouse gas emissions and kick-start the transition to zero-emissions, or zero-carbon, green economies.
Environmental organizations, such as Greenpeace, have alternately held up the world’s largest IT companies and data center operators, including Apple, Google and Microsoft, for public applause or chastisement based on their energy usage, energy policies and environmental and social responsibility. Yet, as Pike Research points out in a new report, the path to green data centers is an evolutionary process, one that industry players have now firmly embarked on. Entire countries, such as Iceland, as well IT industry leaders, such as Intel, are cases in point.
The green data center market
Data centers consume around 1.5 percent of total electricity demand globally, and that’s expected to increase drastically, given that even the most modern societies around the world are in the early stages of a fundamental technological and economic shift to a digitally-connected, network-centric social, commercial and industrial environment.
Yet, while the environmental and social benefits of greening data centers are well-recognized, the “bottom-line” financial benefits of greening data centers are becoming increasingly clear and substantial to industry players. In an increasingly crowded, resource-constrained world, they are recognizing and increasingly aiming to realize them by increasing renewable energy use, employing clean technology to increase energy efficiency by reducing waste and consuming less, and developing more energy-efficient computing and telecoms infrastructure.
In its “Green Data Centers” report, Pike Research divides the market into three key technology areas: power and cooling infrastructure; IT equipment; and monitoring and management, noting that in each of the three, “the drive to energy-efficient data centers is already a key driver for growth.”
Key in terms of achieving energy efficiency, GHG emissions reduction, and renewable energy usage, the report authors state that “although data center energy management is an emerging market that has yet to be established as mainstream technology, it is a segment that will grow rapidly over the next 5 years.”
Already substantial, Pike Research forecasts that green data centers “will offer an annual market opportunity that exceeds $45 billion worldwide by 2016. The Asia Pacific region is projected to have the highest revenue growth through 2016 with a CAGR (constant annual growth rate) of just under 30 percent between 2011 and 2016. Double-digit revenue growth is also projected for Europe and North America (CAGRs of almost 27 percent for both markets).”
Is it possible to “go green” fast enough?
Greenpeace has been at the forefront of environmental organizations’ efforts to enlist broad public support in pressuring IT, cloud services and data center providers to “green” and clean up their act. As the authors of Greenpeace’s April 2012 “How Clean is Your Cloud?” report state,
“The growth and scale of investment in the cloud is truly mind-blowing, with estimates of a 50-fold increase in the amount of digital information by 2020 and nearly half a trillion in investment in the coming year, all to create and feed our desire for ubiquitous access to infinite information from our computers, phones and other mobile devices, instantly. The engine that drives the cloud is the data center.”
Given the scale of investments being poured into data centers by established and new market participants, the most probable outcome is that exponential growth in data center electricity demand will far outstrip green energy efficiency gains and growing renewable energy use, Greenpeace notes.
Key findings of this year’s Greenpeace report include:
- Three of the largest IT companies building their business around the cloud – Amazon, Apple and Microsoft – are all rapidly expanding without adequate regard to source of electricity, and rely heavily on dirty energy to power their clouds.
- Yahoo and Google both continue to lead the sector in prioritizing access to renewable energy in their cloud expansion, and both have become more active in supporting policies to drive greater renewable energy investment.
- Facebook, one of the largest online destinations with over 800 million users around the world, has now committed to power its platform with renewable energy. Facebook took the first major step in that direction with the construction of its latest data center in Sweden, which can be fully powered by renewable energy.
- A growing concentration of data center investments in key locations is having a significant impact on energy demand and how the electricity grid is managed; if such concentrated expansion is allowed to continue, this will make it increasingly difficult to shift these investments and the surrounding community away from dirty sources of electricity.
Taking a “glass is half-full” perspective, the EPA recently released its list of Top 50 “green-powered” organizations that are leaders when it comes to making use of clean and renewable energy resources. Longstanding semiconductor industry leader Intel was singled out by the EPA Green Power Partnership member for making the greatest strides towards maximizing use of electricity produced from solar, wind, geothermal and low-impact hydropower resources. Kohl’s Department Store and Microsoft– in stark contrast to its Greenpeace Cloud report ranking– ranked second and third. Wal-Mart and Whole Foods rounded out the top five.
“Green” as a data center asset and marketing tool
The drive to green data centers, as well as grow data center revenue and profit, isn’t limited to companies. Blessed by nature in terms of potential renewable energy resources, Iceland’s national power company recently announced that it’s aiming to meet one percent of the European data center sector’s electricity demand with power from renewable hydroelectric and geothermal sources.
National electric utility Landsvirkjun estimates that meeting Europe’s data center electricity demand will require 1.5-terawatt-hours (TWh), about ten percent of Iceland’s current electricity generation. The national utility’s capitalizing on the success Iceland’s been having attracting European data center operators to set up shop in the country.
Iceland has more than necessary renewable energy resource development potential to realize its ambition, Landsvirkjun figures. Key to the effort is the fact that power prices in Iceland, even though they’re renewable, are the “most competitive in Europe.
“Recent public quotes from the company offer fixed real rates of $43/MWh in 12 year contracts. In comparison, European average real market rates were from $65/MWh in 2011 on short term contracts with prices expected to increase considerably over the coming decade. In addition, Iceland’s power is 100 percent renewable from hydro and geothermal sources and the quality of delivery has recently been singled out by the World Economic Forum as being “among the top three in the world,” according to a Landsvirkjun press release.
Is it more than likely that data center expansion will outpace energy savings and renewable energy gains? Is it worth pursuing the goal of the green data centers nonetheless? Yes and yes.