Data Centers Double Energy Use

According to the EPA, the U.S. data center industry is in the midst of a major growth expansion driven by the increased use of electronic transactions in the financial services, the growth of Internet communications and entertainment, the shift to electronic medical records for healthcare, and the adoption of satellite navigation and electronic shipment tracking in transportation.

The statistics for energy consumption, however, are alarming:

• During the past five years, the amount of energy consumed by data centers in the U.S. doubled.
• In 2006, data centers consumed about 61 billion kilowatt hours (kWh), representing 1.5 percent of total U.S. electricity consumption.
• Total electricity costs of data centers topped $4.5 billion.
• The power and cooling infrastructure that supports IT equipment in data centers accounts for 50 percent of the total consumption by data centers.

Equivalent to 5 Million Households

This estimated level of electricity consumption is more than the electricity consumed by all the nation's color televisions. It's the same amount of energy consumed by approximately 5.8 million average U.S. households or about five percent of the total U.S. housing stock.

Federal servers and data centers alone account for approximately 6 billion kWh (10 percent) of this electricity use, for a total electricity cost of about $450 million annually.

Data Centers' Consumption to Double in Five Years

Worse yet, the national energy consumption by servers and data centers will probably double again by 2011 to more than 100 billion kWh, costing an additional $7.4 billion.

With the price of a barrel of crude oil topping $94 last week, there is reason for concern. But for environmentalists, what's troubling in these statistics is the impact on global warming trends. The majority of electricity in this country is still generated by coal-fired plants, and the net effect is a massive increase in the amount of CO2 that will be released into the atmosphere.

IBM Has a Plan

In this context, IBM's announcement last week that it has developed an incentive for companies to use its server consolidation technologies to obtain energy credits is indeed interesting.

According to the IBM plan, companies that document their savings in energy use by consolidating server farms onto IBM mainframe servers will be eligible to accrue energy credits that can be traded on the carbon market. The savings are documented using reference tables created by IBM and recorded by Neuwing Energy Ventures, an independent firm verifying and trading in energy efficiency certificates.

Greening the Data Center

Consolidation technologies used by IBM—which include server virtualization—enable companies to reduce the number of individual power supplies and the amount of energy used to cool the data center. And the savings can be significant, according to IBM.

IBM has its own plan to consolidate 3,900 distributed systems onto 33 mainframes that will eventually save the company 119,000 megawatt hours annually. Neuwing issues one energy efficiency certificate for each megawatt hour saved per year. IBM estimates that, based on the current energy market's valuation, these certificates will have a real value of between $300,000 and $1 million.

Building a Model for Energy Savings

Obviously, few SMB clients have the consolidation opportunities of IBM, and IBM is offering this program only for its mainframe customers at this time. Yet IBM says that the real benefit to the organization is the increased efficiency in operating costs that can be gained by consolidation, and the customers would have a choice: They can obtain the certificates as an indication of corporate responsibility or trade the credits on the open market through Neuwing.

And IBM isn't the only organization that provides a financial incentive for energy efficiency. Pacific Gas and Electric currently pays companies between $150 and $300 per server removed from service, and PGE encourages its customers to adopt server virtualization to increase server utilization.

Nonetheless, IBM says it is the first company in the computing industry to offer such a program to its new customers. And existing customers can get into the program too.

Bringing Customers on Board

Existing mainframe users can claim credits based on increased computing requirements. All they have to do is demonstrate that they are growing on an efficient computing platform and then project the energy costs they are saving compared to what they might have spent by expanding existing server farms.

Though the IBM program is currently focused on mainframe data centers, IBM says that it plans to expand the program to System i and System p customers as well.

Marketing Green

As a marketing strategy, you have to hand it to IBM: It has been successfully pushing server consolidation for a number of years, using a variety of virtualization technologies on all its server offerings. Bringing the consolidation strategy into the mainstream of environmentalism is alluring for some customers that are concerned not only about their increased energy consumption, but their public profile as high-energy consumers.

Impact vs. Affect

Yet, according to some analysts, the energy credit/carbon market is still an unproven strategy for combating global warming. Why? Because the majority of U.S. energy companies still use coal-fired technologies to create electricity. Though reducing the amount of energy used by data centers may slow the trend of CO2 emissions, reducing the current level of energy consumption is the faster way to curve emissions. And with the expected rise in the number of data centers comes the proportionate increase in the number of terminals, PCs, routers, and other electronic equipment accessing them.

Until the utility companies embrace cleaner forms of energy, these analysts believe, trading credits for energy efficiency only reduces the cost without impacting the level of emissions. Instead, these analysts believe, the fastest way to reduce emissions from electrical devices is simply to power off the equipment when not in use.