By Mitch Fonseca, Senior Vice President & General Manager of Data Center Services, Cyxtera
A famous amphibian once sang, it’s not easy being green. In addition to being what’s surely the world’s best-known frog, he was also quite prescient when it comes to the modern-day struggle between energy efficiency and cost consciousness. Purchasing the cleanest, most cost-efficient energy is a no-brainer from the financial side and makes for great optics, but any CFO will tell you that cost is king when it comes to purchasing power — literally and figuratively.
Being green allows a company to look good no matter which side of the desk you’re sitting on. Behind the desk, a CFO is cutting costs and being mindful of the corporate bottom line, but in front of the desk they’re able to demonstrate social responsibility through energy-expense reduction. What’s not to love?
For colocation data centers, keeping energy costs in check is paramount considering that energy is among their top three expenses, if not the top expense. While cost effectiveness is a clear imperative for those running (and utilizing) data centers, a sound energy management strategy is even more important when taken in a global context. A 2016 article in The Independent reported that the world’s data centers used more energy than all of the UK that year and cited Britain’s leading data center expert as saying data centers’ energy consumption would double every four years. That hasn’t come to pass (yet) even as technological advances have made it easier to stream data from anywhere at any time. Rather, significant strides in hardware efficiency have seen data-fueled energy consumption staying relatively level. However, even the paper’s authors say that this is no time to rest on our collective laurels as cryptocurrency, blockchain and AI will further tax energy resources.
Regardless of which projection comes to pass, it’s clear that basic energy efficiency measures aren’t going to cut it long term. What’s needed is a comprehensive energy management system that allows data centers and their customers to meet their financial goals while simultaneously being good global stewards.
Utilities giveth …
When examining the supply side of the equation (who you source your energy from and what you pay), it makes sense to purchase clean, low-cost energy, but that’s easier said than done. Sourcing these options is not for the faint of heart. There are opportunities that allow you to purchase truly renewable, green energy that’s competitive with traditional utility companies in pricing, but the reality is rarely does clean come cheap.
Utilities are being urged to move to natural gas because it’s cleaner and has a smaller carbon footprint than coal or oil-fired plants, but these changes are all just “shades of green.” Being truly green means using renewable – and perfectly sustainable – sources such as sun and wind. Certainly, there are those companies looking to source their power from solar and wind-generation plants – or go off the grid completely, and generate their own power – especially as solar panels have come down in price and can last upwards of 30 years (that’s a pretty strong ROI), but even with these advances, we’re not there yet as an industry.
Like it or not, price remains the driving force behind selecting an energy provider and accordingly, a colo data center, as higher energy costs trickle down to data center customers. All things being equal, a customer will go with the data center that uses renewable energy, but rarely are things equal so companies go with whoever is cheaper. Being able to tout oneself as energy-conscious is just the cherry tomato on the salad, so to speak.
You get what you get
Unfortunately, data centers in regulated markets are somewhat hamstrung when it comes to keeping costs down. Aside from ensuring they are on the best rate plans and taking advantage of any demand-response rebate opportunities that come their way there’s little choice in the matter. Deregulated markets, on the other hand, open a range of options for purchasing energy, renewable or otherwise.
Competitive supply contracts, hedge contracts, net-metering (the ability to store energy when it’s cheap and sell it back when it’s expensive), and the ability to manage capacity, transmission and demand charges translate into reduced costs for data centers and their clients and open the door for meaningful renewable energy opportunities as private enterprises can compete against the major utilities. Take, for example, the Commonwealth of Virginia. While not technically a deregulated market, Virginia allows enterprises to purchase solar power since Dominion Energy doesn’t sell it, the caveat being you have to buy 100 percent of your power from this other provider.
… And data users taketh away
The demand side of the power equation is where energy efficiency comes into play. Obviously, the more efficient a data center is the less energy it needs to support its operation, which is great for the bottom line but only half the battle. The other half, unfortunately, is out of a colocation data center’s control as it’s all about the energy consumed by the IT gear it houses.
Capital investments in more efficient infrastructure typically have attractive payback periods, but that assumes you have the tools in place to measure the direct financial impact and take into account hidden costs. That, plus the ability to factor in utility incentives (which are often hard to secure), can go a long way to reducing upfront costs.
A comprehensive energy management strategy requires that we broaden the discussion and take both supply and demand into account. Only then can we decide what part of the energy universe we need to explore and just how hard we will work to be green.