This chapter defines green, discusses the drivers for companies to build greener Data Centers, and presents the benefits a business can see from environmentally friendlier server environments. The chapter also outlines incentive programs that reward green efforts and recaps environmental activities that several major companies pursue today.

Defining Green

If you’re reading this book, you’re obviously interested in having the server environments that house your company’s computing equipment be green. What exactly does the term green mean, though, as it relates to a Data Center facility and Data Center operations?

Does a green Data Center mean a facility that was constructed using fewer natural resources? Does a green Data Center mean a hosting space that produces fewer pollutants? Does a green Data Center mean a room that consumes less energy? Conceivably the term means all those things and more.

No single definition has been adopted across the Data Center industry for what constitutes a green Data Center. There are, however, generally accepted concepts from the greater building industry that are relevant to consider.

The term green building is defined as designing a building so that it uses resources—energy, water, and materials—more efficiently and has less impact upon people and the environment. Substitute Data Center for building and you have

Another relevant building industry term is sustainable development, which is defined as development that uses natural resources in such a way as to meet people’s needs indefinitely. Or as stated by the World Commission on Environmental Development that first coined the term in a 1987 report to the United Nations General Assembly, “meeting the needs of the present without compromising the ability of future generations to meet their own needs.”

Truly sustainable commercial buildings are extremely rare. Although you likely won’t achieve 100 percent sustainability for your Data Center facility, it’s useful to keep the ideals in mind as you make design and management decisions concerning the facility. Even achieving a Data Center that is mostly sustainable is a major step forward from past server room designs and can provide significant benefits to your company.

The Reasons to Go Green

A company that is sensitive to the environment and demonstrates that sensitivity through its actions shows admirable social consciousness. In the competitive marketplace that many businesses function in, however, the simple desire to “do the right thing” isn’t enough to enact green practices. Going green must be evaluated for its impact upon the company, particularly the company’s bottom line.

Going green with a Data Center requires even more scrutiny because of the critical role the facility serves in enabling the business to function. Relevant factors when considering a green Data Center include the following:

• Trade-offs in functionality and availability: Does a green Data Center have more or less capacity (that is, power, cooling, connectivity) than other server environments? Are its physical infrastructure components more or less susceptible to downtime?

• Cost implications: Is a green Data Center more or less expensive to build than a facility that doesn’t bother with environmental considerations? Is it more or less expensive to operate? Is there enough return on investment that retrofitting an existing facility to be greener is worthwhile?

• Use of technologies uncommon to the Data Center industry: What operational changes or new expertise does a green Data Center require?

• Ancillary issues: Data Centers aren’t islands. They are a key piece of how a company functions. What issues outside of the hosting space are influenced by having a green Data Center?

With these issues in mind, then, what are the merits of designing a new Data Center to be green or retrofitting an existing one? The following sections answer this question.

Growing Power Demand, Shrinking Availability

Data Centers as a group consume a staggering amount of power and their appetite is growing. An August 2007 report by the United States Environmental Protection Agency estimates that U.S. Data Center power usage doubled in 6 years, consuming 61 billion kilowatt hours (kWh) of energy by 2006. The report additionally projects that, unless Data Centers make efficiency improvements to both facilities and IT (Information Technology) components, that power consumption will reach 100 billion kWh by 2011. The European Commission, meanwhile, in the written introduction to its Code of Conduct on Data Centers (discussed elsewhere in this chapter) estimates Western European Data Center consumption at 56 billion kWh per year in 2007, reaching 104 billion kWh by 2020.

Figure 1.1 illustrates U.S. Data Center power consumption between 2000 and 2011, according to the U.S. Environmental Protection Agency. You can find a copy of the report, “Report to Congress on Server and Data Center Energy Efficiency,” at the EPA website: http://www.energystar.gov/index.cfm?c=prod_development.server_efficiency_study.

Figure 1.1
Estimated U.S. Data Center Power Consumption Trend

Such dramatic growth in consumption can be attributed in part to the overall proliferation of technology and Internet usage throughout society. More emails, instant messages, web searches, online financial transactions, and video downloads occur today than just a few years ago. More servers, networking gear, and storage devices are needed to facilitate that burgeoning Internet traffic—more in quantity, more in performance, and therefore more in power consumption.

Also, at many companies, Data Center power and cooling capacity are seen as unlimited resources, so few barriers exist to inhibit demand. If you allocate a budget each fiscal quarter to buy servers and there are no restrictions, why not buy the fastest machines with the most processing capability you can afford? Unfortunately, that top-end performance often translates to top-end power demand and heat production.

Another likely contributing factor is the shrinking form factor of Data Center equipment. Today’s server models are physically smaller than yesterday’s, allowing more of them to be placed in each Data Center cabinet than in years past. Even if a new machine consumes less energy than its predecessors, and not all do, the fact that you can install more equipment in the same physical space means that more overall power is consumed.

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Note - My personal lesson as to how small-profile servers can increase the demand for Data Center resources came in 2004 when one Cisco business unit chose to deploy a series of 1U-high boxes.

The initial wave of what would ultimately include more than 200 machines was to be installed into a server row with 12 server cabinet locations. After filling a few 42U-high cabinets close to half-full with servers, the installers determined (thanks to amp-reading power strips) that the servers’ cumulative electrical draw had already exceeded the standard power budget for an entire cabinet, despite taking up less than half the space.

We also realized something else just by standing near the cabinets: the gear was hot. The older room’s 60 watts per square foot (645.8 watts per square meter) of cooling simply wasn’t up to the task of dissipating the heat generated by these higher-performing, tightly packed servers.

Suddenly, interior cabinet space was no longer a true indicator of a Data Center’s maximum capacity. Power and cooling was. (And is....)

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Regardless of its cause, such steep growth in electrical demand among Data Centers can’t continue indefinitely. There simply isn’t an infinite number of real estate properties available that are—or can be—equipped with massive amounts of commercial power and well suited overall to house a Data Center. (Well suited meaning located away from environmental hazards, capable of accommodating sufficient floor space, close to a skilled work force, and so on.)

A modern Data Center of significant size, say 20,000 or 30,000 square feet (rounding down for convenience, 2000 or 3000 square meters) and designed with redundant standby electrical infrastructure can easily demand 20 megawatts (MW) of commercial power capacity. More massive installations, if built to house the same equipment density across its larger floor space, need power on a proportional scale. Therefore, a Data Center 10 times as large can conceivably need 10 times the power. As an example, published reports describe a Microsoft Data Center of 500,000 square feet (46,452 square meters) in Northlake, Illinois, having 198 MW of electrical capacity and Data Center space for Digital Realty Trust in Ashburn, Virginia, totaling 432,000 square feet (40,134 square meters)—distributed among three buildings—and having 225 MW of electrical capacity.

Properties readily possessing access to such large supplies of electricity are rare today and will be even less common tomorrow. At some level, everyone in a given region is fishing from the same proverbial pond. Your prospective Data Center competes for power resources with every other new home, office building—and major Data Center—in your area. Whoever builds in the area first, or pays the utility company to reserve the capacity, gets it.

Greening your Data Center, which includes improving the electrical efficiency of both the building and the computing equipment it houses, allows you to get more out of the power capacity of a given property. When executed during the planning phase of a Data Center project, a green design can reduce the power needs of the facility and perhaps even allow it to be built in a location that otherwise could not sustain it. If greening is done to an existing Data Center, the improvements can slow or stop rising electrical demand from outstripping available capacity.

If you don’t build such efficiencies into your Data Center, thereby lowering how much power it consumes, there might come a day when there simply isn’t enough commercial power available locally to run the Data Center at full electrical load.

Figure 1.2 shows U.S. Data Center power consumption trends predicted by the U.S. Environmental Protection Agency, assuming various energy-efficiency measures are implemented. The strategies, which range from IT improvements—such as server and storage consolidation—to facilities improvements—such as airflow optimization and implementing high-efficiency electrical components—are all presented within later chapters of this book.

Figure 1.2
Estimated U.S. Data Center Power Consumption Trend, With Green Measures­

Monetary Benefits

If you have ever built or maintained a Data Center you know they’re expensive. Companies routinely pay more per square foot (meter) to construct hosting areas than any other type of floor space in their buildings due to Data Centers’ extensive physical infrastructure. Add to that the expense of the equipment you must purchase to make the room functional—servers, networking gear, and storage devices—and even a space with a small physical footprint can cost hundreds of thousands of dollars.

Over the lifetime of a Data Center, those initial construction and deployment costs are ultimately dwarfed by the room’s operational expenses, led first and foremost by its power bills. The 61 billion kWh of annual energy that the EPA estimated for U.S. Data Centers in 2000 carried a price tag of $4.5 billion per year, for example; the 100 billion kWh estimated for 2011 will carry a cost of $7.4 billion.

Applying green materials and practices to a Data Center typically involves an increase in capital expenses—the initial cost for physical construction or deploying components—and then a decrease in operational costs. Because the capital cost is a one-time expenditure whereas the operational savings continue for years, most Data Center green improvements ultimately provide significant cost savings over time.

How significant? A cost-benefit analysis of 33 green building projects concluded that a 2 percent increase in upfront costs typically results in 20 percent savings over the life of the building—a tenfold return. The financial benefits included lower energy, waste disposal and water costs, lower environmental and emissions costs, lower operations and maintenance costs, and savings from improved employee productivity and health.

The study, The Costs and Financial Benefits of Green Buildings, was developed by clean energy industry consulting firm Capital E for California’s Sustainable Building Task Force and reviewed 25 office buildings and 8 school buildings completed, or scheduled for completion, between 1995 and 2004.

“The findings of this report point to a clear conclusion: building green is cost-effective and makes financial sense today,” wrote the study’s authors.

Table 1.1 shows the cost premiums and savings that green buildings incur compared to conventional construction, according to the study.

The data in Table 1.1 came from green building projects, not green Data Center projects, so costs and savings will differ for a server environment. For instance, because most employees typically spend only part of their work day in a Data Center, the productivity and health benefits are likely to be diminished.

Alternately, because Data Centers involve drawing much more power than other building spaces, green improvements can easily achieve much more than $5.79 per square foot ($62.32 per square meter) in energy savings over 20 years.

A study conducted by Lawrence Berkeley National Laboratories for the American Council for an Energy-Efficient Economy determined that Data Center energy costs are typically 15 times those of typical office buildings. The 2006 study, Best Practices for Data Centers: Lessons Learned from Benchmarking 22 Data Centers, reviewed 22 Data Center buildings and found some server environments were as much as 40 times as energy-intensive. Apply those multiples to the energy-savings figures in Table 1.1, and you have potential savings of $86.85 per square foot ($934.85 per square meter) in an average Data Center and of $231.60 per square foot ($2492.94 per square meter) in the most power-hungry rooms.

Table 1.1 Financial Benefits of Green Buildings

 

If you develop a business justification about why to pursue green initiatives at your company, you undoubtedly need to quantify your return on investment. In simple terms, if the business expends resources on an initiative, typically in the form of money or staff time, how long will it take for that expenditure to be repaid as a result of the changes?

Even if you never performed a formal ROI analysis in your job role, you have probably done the mental exercise instinctively as a private consumer. For instance, if you consider buying a compact florescent light bulb for your home, you likely thought, “If I have to pay x more for a fluorescent light bulb than I do for a standard one, but the fluorescent bulb saves me y on my electric bill every month, that’ll pay for itself in z months.”

There are more variables when considering green improvements for a server environment, but the basic approach is the same: What’s the upfront cost and how quickly can you recoup it?

Say, for example, you decide to cover the notched openings in the floor tiles of your Data Center’s raised floor, to improve the static pressure in the room and thereby increase the efficiency of the air conditioning system. (Sealing unwanted openings across the Data Center prevents chilled air from leaking out and not fully reaching the equipment it is supposed to cool.)

If the Data Center has 100 cabinet locations with tile openings and you spend $50 per cover (there are many cover types on the market, from foam rubber to bristle brushes), that’s $5000 in upfront costs. Assuming the subsequent improvement to the Data Center’s air flow reduces the power draw of the cooling system enough to save $200 worth of energy each month, you earn back the price of the caps in approximately 2 years ($200 × 25 months = $5000).

Changing any of the variables alters how long it takes for the improvement to pay for itself. The data points to consider in this case include the following:

• The cost of the improvement: In this example, the $50 price tag for the tile covers. More expensive covers obviously take more time to pay for; less expensive covers less time. Because your support staff will spend time installing the covers, you could conceivably factor in a labor cost as well. (I wouldn’t in this particular case, because the work is negligible enough to be absorbed into the staff’s regular workload.)

• The baseline operational costs: In this instance, the monthly electrical bill for the Data Center, which includes the cost of powering the cooling system before the tile covers are installed. Note that this actually includes two elements—how much energy is consumed and the local cost of electricity. This becomes relevant if you consider making an improvement in multiple Data Centers located in different cities that are, therefore, subject to different electric utility rates.

• The projected impact of the operational improvement: How much energy do you save by improving static pressure in the Data Center, and therefore how much lower will the electric bill be? The more dramatic the improvement, obviously the faster you recoup your initial expense. Accurately gauging the savings provided by some green improvements can be challenging. Installing a more efficient PDU can be relatively straightforward to measure, for instance, whereas other improvements such as floor tile covers can be less exact. Be prepared to estimate savings and take measurements after they are installed.

A more comprehensive analysis can also cover other impacts of making the improvement. For instance, the improved airflow might lower the overall temperature of the Data Center, which is generally better for servers and provides a greater safety margin if an air handler malfunctions.

A NetApp Data Center in Sunnyvale, California, illustrates the financial benefits that come with a green Data Center. The facility, opened at NetApp headquarters in 2008, in building space previously used for manufacturing, includes a variety of energy-efficient design elements that save the company more than $1 million per year compared to the operational costs of a conventional server environment.

The Data Center is 14,500 square feet (1347 square meters) in size and involves an additional 5500 square feet (511 square meters) of surrounding building space for air handlers that cool the hosting area. The 720-rack Data Center has 5.76 MW of electrical capacity for IT hardware and 7 MW overall. About 20 percent of the Data Center floor space is supported by standby electrical infrastructure; the remainder is not.

Energy-efficient measures including air economizers, a variable chiller plant, energy-efficient transformers, and rotary uninterruptible power supply (UPS) systems save more than 11.1 million kWh in annual energy usage, thereby conserving more than 6.7 million pounds (3039 metric tons) in carbon dioxide emissions and saving more than $1 million in operational costs per year, according to Ralph Renne, NetApp director of site operations.

Table 1.2 shows the annual energy, carbon, and costs savings of the facility over a conventional Data Center, broken out among three main categories of green improvements.

Each of the energy-efficient measures implemented by NetApp are explained in detail in Chapter 4, “Powering Your Way to a Greener Data Center,” and Chapter 5, “Cooling Your Way to a Greener Data Center.”

Capacity Gains

Because the essence of a green Data Center is to use resources more efficiently, it follows that a green facility gets more out of those resources than a room that hasn’t been designed in that manner. To put it another way, if one car is more fuel-efficient than another, it can go farther on the same amount of gas.

Many Data Centers, especially those built more than a few years ago, have power and cooling constraints that significantly limit to what extent a company can fill its server cabinets with gear. Making those server environments greener can stretch its power and cooling resources farther, opening up valuable hosting capacity that was previously unusable.

Achieving such capacity gains could conceivably allow your company to defer construction of a Data Center—along with the capital and operational expenses that come with it.

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Note - Imagine if you can make enough efficiency improvements to your existing Data Centers to actually take some of your server environments offline altogether. I can’t think of a more dramatic example of a company making its Data Center portfolio greener.

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Table 1.2 Annual Savings from a NetApp Green Data Center

Increasing Regulation

Even if your company doesn’t see a driving need to make your server environments greener, it’s likely that your government does—or soon will. Government officials worldwide are paying increasing attention to environmental concerns, from energy consumption rates to dependency upon oil to global warming.

Although no mandates specifically call out Data Center restrictions, the tremendous environmental impact of these rooms make them a prime target to place limits on to meet various environmental pledges. A green Data Center is much more likely to be compliant with current and future environmental regulations than a conventional Data Center.

Recent Government Green Commitments

China published a National Climate Change Program in 2007 that set goals to improve its energy efficiency by 20 percent in 2010 (compared to 2005 levels) and to raise the proportion of renewable energy to 10 percent of its primary energy supply by 2010. The country previously passed the Renewable Energy Law that targeted increases in the use of various renewable energies by 2010 and 2020 and committed to investing $180 billion in renewable energy during that time. If the targets are met, renewable energy will account for approximately 16 percent of the country’s energy consumption in 2020.

India introduced the Energy Conservation Building Code in 2007 that is expected to reduce power consumption in commercial buildings 25 percent to 40 percent by way of minimum efficiency standards for external walls, roofs, glass structures, lighting, heating, ventilation, and air-conditioning systems. The codes are to be mandatory for commercial structures with an electrical load of at least 500 kW—a power budget easily exceeded by even medium-sized Data Centers.

Japan’s Ministry of Economy, Trade, and Industry announced a New National Energy Strategy in 2006 that includes the goal to improve energy consumption efficiency at least 30 percent by 2030.

Sweden’s Minister for Sustainable Development made headlines in 2005 by announcing a goal to eliminate the country’s dependence upon fossil fuels by 2020. To achieve the goal, the government is increasing research on alternative fuels, expanding a quota system introduced in 2003 requiring all electricity customers to buy an increasing percentage of renewable energy, and offering tax breaks for homes and vehicles that use renewable fuels.

The United Kingdom has announced goals to reduce greenhouse gas emissions by at least 80 percent by 2050 (compared to 1990 levels) and is driving to that goal in part through its Carbon Reduction Commitment (CRC). The CRC is a mandatory carbon emissions trading scheme that, effective 2010, requires organizations that consume at least 6000 MWh per year in electricity to buy carbon credits. For the first 3 years of the program, costs are £12—about $18—for each metric ton of CO2. By 2013, carbon allowances will instead be auctioned, and the total number of them will be capped, ultimately forcing reductions in carbon emissions.

In the United States, a growing number of state governments have adopted renewable portfolio standards, which call for a certain portion of utility power to come from renewable sources. Twenty-four states and the District of Columbia have mandatory requirements, and four others have declared nonbinding goals. Their popularity appears to be growing, as half of the standards have been developed since 2004.

The portfolio standard programs vary widely, differing over details such as minimum thresholds of renewable energy, whether energy efficiency should figure into usage calculations, and deadlines to meet the standards. The inability to agree upon one common approach is why no federal renewable portfolio standards exist.

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Note - When considering, from a green perspective, where to build a Data Center, it is useful to know what regional standards are in place for power content and emissions. The higher percentage of energy powering your facility that is renewable, obviously the greener the Data Center is to begin with. Chapter 4 discusses electrical mixes in greater detail.

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The EPA report on U.S. Data Center power consumption, mentioned previously, was actually initiated by 2006 federal law (Public Law 109-431) “to study and promote the use of energy-efficient computer servers in the United States.” When formally presented to Congress in 2007, there was some anticipation within the Data Center industry that U.S. legislators would respond by setting restrictions on Data Center energy usage. Although none have been introduced as of this writing, the EPA is continuing its focus on Data Centers by developing energy rating standards for servers and Data Centers, similar to the one it uses to rate appliances for their consumption. Chapter 4 and Chapter 8, “Choosing Greener Gear,” provide additional details on those efforts.

More than nine out of ten Data Center owners and operators still expect some manner of increased regulation according to the Datacenter Research Group that conducts market surveys among attendees of the DatacenterDynamics conference series. Surveys of 540 attendees, conducted in 2008, reveal that only 7.8 percent believe increased regulation won’t happen. (Interestingly, opinions differ over the effect of increased regulation and compliance—26 percent predict negative impact on their organization, 25.8 percent predict positive impact, and the remaining 40 percent anticipate neutral impact.) The surveys were conducted at DataCenterDynamics conferences in Chicago, Dallas, Miami, New York, San Francisco, Seattle, Washington, D.C.

Multicountry Green Commitments

Several countries have meanwhile collectively pledged to be greener.

The European Commission has called for reducing energy usage across the 27 countries of the European Union at least 20 percent by 2020, cutting carbon dioxide emissions from primary energy sources 20 percent by 2020 and 50 percent by 2050, a 10 percent use of bio-fuels by 2020, and the development of a European Strategic Energy Technology plan to foster advances in renewable energy, energy conservation, nuclear power, clean coal, and carbon capture.

The commission has also stated a desire to establish an international agreement for all developed nations to cut energy usage 30 percent by 2020. (All energy reduction goals are in comparison to 1990 levels.)

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Note - Carbon dioxide is one of several so-called greenhouse gases that trap heat from the sun and warm the Earth. If present in high enough quantities, such gases are believed to contribute to a rise in global temperatures that, in turn, cause environmental problems.

Chapter 2, “Measuring Green Data Centers,” discusses greenhouse gases and carbon dioxide emissions in greater detail.

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Minimum standards for building energy performance have also begun to be applied with European Union member states, in accordance with the EU Energy Performance Building Directive. The directive, which was passed in 2002 and came into effect in 2006, established a common methodology for calculating building energy performance.

European Union countries are Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.

As of this writing, the European Commission is also continuing a series of studies of electronic equipment for the purpose of establishing new energy and environmental restrictions for those products. The effort is the latest stage of the European Union’s Eco-design Directive for Energy Using Products. Issued in 2005 and generally adopted into law by EU countries in 2007, the directive requires prevalent electronic devices (200,000-plus units selling per year in the EU) to meet minimum power consumption guidelines and for manufacturers to determine the environmental impact of products over their complete lifecycle, from design and manufacture to use and disposal.

Specific energy performance minimums for various equipment will ultimately be set in the form of “implementing measures.” The first wave of equipment that the European Commission has focused on includes boilers, water heaters, personal computers, copiers and other imaging equipment, televisions, batteries and external power supplies, office lighting, street lighting, air conditioning, commercial refrigerators and freezers, laundry driers, vacuum cleaners, set top boxes, and domestic lighting.

You can find information about European Commission green-related activities in multiple languages, at http://www.ec.europa.eu/climateaction.

The 21-member countries of the Asia-Pacific Economic Cooperation announced in 2007 the goal to reduce their cumulative energy intensity by at least 25 percent by 2030 (compared to 2005). APEC is a cooperative, multilateral economic forum dedicated to promoting trade and economic growth, and its member economies account for more than one-third of the world’s population (2.6 billion people), more than 50 percent of the world’s gross domestic product ($19.25 trillion), and more than 41 percent of the world’s trade.

APEC’s member economies are Australia, Brunei Darussalam, Canada, Chile, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, Chinese Taipei, Thailand, the United States, and Vietnam.

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Note - Economically speaking, energy intensity is the ratio of energy consumption to economic or physical output—energy use per unit of gross domestic product. A country that has a lower energy intensity is considered more energy-efficient because it produces more items or services using fewer energy resources.

A country’s energy intensity is ultimately influenced by several factors, including standard of living (and associated quantity of energy-using devices); the energy efficiency of buildings, appliances and vehicles; severity of climate (influencing energy usage for heating and cooling); and the prevalence of energy-consuming mechanisms such as mass transit or energy conservation programs.

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At the Second East Asia Summit in early 2007, leaders of 16 countries signed the Cebu Declaration on East Asian Energy Security, pledging to create voluntary energy-efficiency targets for their respective nations and to work for “intensified energy efficiency and conservation programs” and expanded renewable energy systems.

Officials took a further step at the Third East Asia Summit at the end of 2007, signing the Singapore Declaration on Climate Change, Energy and the Environment, committing to “working toward achieving a significant reduction in energy intensity” and setting energy efficiency goals by 2009.

Summit participants include Australia, Brunei, Cambodia, China, Indonesia, India, Japan, Laos, Malaysia, Myanmar (Burma), New Zealand, Philippines, Singapore, South Korea, Thailand, and Vietnam.

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Note - In what might be an indication of binding requirements to come for the Data Center industry, the European Commission in 2008 published a voluntary Code of Conduct on Data Centres Energy Efficiency calling for Data Center owners and operators, hardware manufacturers, and service providers to adopt several practices aimed to improve Data Center energy efficiency.

Data Center operators who agree to participate in the Code of Conduct are expected to collect and report energy usage of their IT hardware and overall facility and follow dozens of identified best practices, ranging from decommissioning unused hardware to installing blanking panels within server cabinets to considering temperature and humidity ranges as a key factor when choosing new hardware, so the Data Center that houses them can ultimately be operated at warmer settings.

A copy of the Code of Conduct, and a companion document that offers more than 100 best practices for participants to potentially pursue, is available at http://www.tinyurl.com/84cjun.

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Of all the multigovernment commitments to being green, perhaps the best known and most symbolic is the Kyoto Protocol. Adopted in 1997 under the United Nations Framework Convention on Climate Change and legally in effect by 2005, the agreement calls for participating industrialized nations to reduce greenhouse gas emissions by a cumulative 5.2 percent between 2008 and 2012 (compared to 1990 levels).

Reduction targets vary by nation including 8 percent for the European Union; 7 percent for the United States; 6 percent for Canada, Hungary, Japan, and Poland; and 5 percent for Croatia. New Zealand, Russia, and Ukraine are to remain flat, at 0 percent, whereas Australia is allowed an 8 percent increase and Iceland a 10 percent increase. If accomplished, the cumulative 5.2 percent reduction represents a 29 percent drop from the emission levels that were otherwise projected for 2010.

As of mid-2008, 181 countries and the European Union ratified the protocol. Of those, 36 countries and the EU are required to meet specific emission reduction targets. Those that fail to meet their 2012 targets are required to reach those reductions plus an additional 30 percent in a second time frame from 2013.

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Note - It’s relevant to note that there is some debate over the ultimate value and impact of the Kyoto Protocol.

Critics disagree with the protocol’s provisions for emissions trading, for example, which allows a country that fails to meet its reduction targets to buy excess capacity from other nations. They also oppose allowing countries to deduct from their emission totals for carbon sinks, natural areas of forest, or other vegetation that absorb carbon dioxide.

Also the United States, which is one of the largest producers of greenhouse gases in the world, has indicated it will not ratify the agreement. U.S. officials expressed concern that implementing the protocol would damage the U.S. economy and that it does not require developing countries to commit to emissions reductions. (This includes China and India, which are major producers of greenhouse gas.)

Proponents say that the Kyoto Protocol is still a major accomplishment, being the first legally binding treaty to mandate greenhouse gas and paving the way for greater measures in the future. Several conferences have already occurred to discuss what steps can or should be taken after the protocol’s 2012 deadline passes.

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Large-scale mandates to reduce carbon emissions and improve energy efficiency can be expected to grow in scope in the future, underscoring how important it is for Data Centers to be greener than ever.

Technology Advances

As time goes on, Data Center technologies and designs evolve and improve. This occurs with facilities infrastructure and, at a much faster pace, with IT equipment. Many advances bring green opportunities with them.

Some of these are incremental changes that occur over time, such as a new generation of servers that have more processing capability than what came before. Others are more dramatic, such as virtualization technology that facilitates greater utilization of equipment.

Still others are foundational changes that are introduced when a server environment is first designed and built, such as when Data Center designers began establishing distinct hot and cold aisles to reduce the mixing of hot and cold air in the hosting space, thereby increasing the efficiency of its cooling system.

Public Perception

The final reason to go green is, for any business that sells a product or service, arguably the most compelling—your customers want you to. Opinion surveys taken on a range of topics and in many different regions of the world show a notable preference among consumers to do business with companies that are good to the environment. Many people are even willing to pay a premium, if needed, to buy green goods and services.

A massive public opinion survey of 27,000 Europeans, conducted across the European Union in late 2007 and published in 2008, indicated that 75 percent are “ready to buy environmentally friendly products even if they cost a little bit more.” The Eurobarometer, a series of surveys performed regularly for the European Commission since 1973, was conducted through face-to-face interviews in people’s homes and showed a strong interest in buying green products.

Table 1.3 shows the percentages of Europeans ready to buy green products according to the 2008 Eurobarometer survey “Attitudes of European citizens towards the environment.”

An array of smaller polls taken around the world in 2007 show similar sentiment. Among them:

• More than six in ten U.S. homeowners said they are willing to pay more for products made with renewable resources. Respondents indicated 65 percent are willing to pay at least $5 more on a $100 product, and 40 percent are willing to pay at least $10 more. The survey of 1001 U.S. homeowners was sponsored by DuPont and Mohawk Industries and conducted by MarketTools (http://www2.dupont.com/Sorona/en_US).

• Seven in ten utility consumers in Europe, North America, and Asia Pacific said environmental impact influences what they buy, and three in four said that companies’ reputations for environmental practices influenced who they buy from. The survey of 1900 utility consumers involved households and small businesses in Australia, Germany, Japan, the Netherlands, the United Kingdom, and the United States. It was conducted by IBM Global Business Services (http://www.tinyurl.com/dbjhob).

• Twelve percent of U.S. consumers said they strongly favor paying more for consumer electronics if those items use less energy or come from an environmentally friendly company, and an additional 41 percent indicated they have concerns about environmental issues. The survey of 5000 U.S. consumers, “In Search of Green Technology Consumers,” was conducted by Forrester Research, Inc. (http://www.tinyurl.com/dbadrl).

Table 1.3 European Attitudes Toward Environmentally Friendly Purchases

 

Although answers to a poll don’t always equate to everyday action—people don’t always act on their stated good intentions—extrapolating the survey results to the consumer market shows the massive potential audience interested in green products. The three groups listed previously—U.S. homeowners; utility consumers in Europe, North America, and Asia Pacific, and overall U.S. consumers—encompass hundreds of millions of people. If even a fraction of that audience bases its purchasing decisions upon how green a company is, who wouldn’t want to be in a position to benefit from that?

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Green + Whitewashing = Greenwashing - Public sentiment is powerful regarding green, not only in supporting green efforts but also in reacting harshly to misleading or inflated claims around green—a practice dubbed greenwashing. Several websites now exist entirely for the purpose of exposing such activities. For good reason, as an ample number of green claims made by product makers or service providers are apparently of questionable merit.

During late 2008 and early 2009, TerraChoice Environmental Marketing reviewed the green claims of thousands of consumer products and determined that the vast majority are vague or misleading in some way. For the study, researchers visited 40 stores in the United States, Canada, Australia, and the United Kingdom. They evaluated 4705 consumer products from baby care and household cleaning items to electronic goods and office products and determined that, among 10,419 green claims made about them, all but 30 claims were flawed. (TerraChoice performed a similar study 2 years earlier to similar findings—a review of 1753 claims by 1018 products in six North American stores determined that only one claim was without flaws.)

The firm categorized the deceptions into what it calls “Seven Sins of Greenwashing.” These include

• Sin of the Hidden Trade-off: Suggesting a product is green based on one characteristic without addressing other environmental issues. For example, promoting paper products for its recycled content while ignoring manufacturing-related concerns such as air and water emissions or global warming.

• Sin of No Proof: Making an environmental claim without providing evidence. For instance, touting lamps or light bulbs for energy efficiency yet offering no supporting documentation.

• Sin of Vagueness: Making an environmental claim that is so unspecific it is likely to be misunderstood. Terms such as “green” and “environmentally friendly,” for example, reveal little about a product if not qualified with additional information.

• Sin of Worshiping False Labels: Using a mock green-certification image to imply that a product has been verified as green by a legitimate agency.

• Sin of Irrelevance: Touting a green characteristic of a product that, although factually correct, isn’t relevant. The study found frequent claims about items being free of ozone-depleting chlorofluorocarbons, which were banned in 1987 by international treaty (the Montreal Protocol on Substances that Deplete the Ozone Layer) and therefore by default not typically present in products.

• Sin of Lesser of Two Evils: Identifying an item as green or organic when the entire class of product as a whole poses environmental concerns. For example, organic cigarettes, which might indeed be made in a more environmentally friendly way than other cigarettes but still pose health concerns.

• Sin of Fibbing: Making false environmental claims.

Needless to say, you don’t want to participate in greenwashing or have your business get a reputation for doing so. Although the preceding “sins” are in reference to the packaging and marketing of consumer products, the same potential exists to make imprecise or inaccurate claims around how green a given Data Center is.

Chapter 2 covers industry standards for accurately representing how environmentally friendly your Data Center is.

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If You Don’t Own Your Data Centers

What if your company doesn’t own the facilities that house your servers and networking equipment? Does it matter how green the facilities are? Do you still have any ability to make those server environments greener?

Yes it does and yes you do.

Keep in mind that you still have financial incentives to be green in a leased Data Center. Every amp of energy that you avoid using is extra capacity that’s available for you to use for another piece of equipment. Some hosting facilities also charge premiums for power consumption above certain thresholds, so greater efficiency can save you money on your leasing costs.

First, although you can’t dictate to the owners of the Data Centers you lease how to build or operate their server environment, you still control the servers that you purchase. Chapter 8 and Chapter 9, “Greening Your Data Center Through Consolidation, Virtualization, and Automation,” discuss how to choose and deploy servers, networking devices, and storage systems for greater efficiency.

Second, you have choices as to where to host your equipment. If being green is important to your business culture, you can make a choice about which colocation Data Center to house your equipment in based upon how green the facility is. Some of the questions to ask when evaluating a space include the following:

• What percentage of the power feeding the Data Center is renewable?

• What technologies have been designed into the Data Center to improve the efficiency of its electrical and mechanical systems?

• How energy-efficient is the Data Center? (The Data Center metrics discussed in Chapter 2 are relevant to inquire about.)

• What is the carbon footprint of the facility?

• What are the emissions from the Data Center’s standby generators?

• For any equipment that is provided by the hosting service, what sort of e-waste recycling do they do?

Nearly all of the Data Center design strategies presented throughout this book apply as easily to a colocation facility as to an owner-operated Data Center. Consider using the chapter summaries or table of contents as the basis of a checklist for evaluating how green a hosting space is.

A final question to ask yourself when reviewing colocation facilities is what sort of availability do you truly need for your Data Center, and therefore how much redundant physical infrastructure do you require? Redundant systems provide greater protection for your Data Center against outages but unfortunately are also less green. Electrical losses are repeated in every additional layer of redundancy, plus more resources are consumed in the manufacture of the additional equipment and infrastructure components.

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Note - Green considerations are prevalent enough today that many colocation operators are ready and willing to discuss their green features. Here are a handful of hosting facilities that are actively promoting their green features:

• Data Center developer and operator 365 Main, based in San Francisco, California, and with facilities in six U.S. cities, announced in 2007 that all its future server environments would be built to meet the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) standards. (LEED standards are explained in detail in Chapter 2.)

• Wholesale Data Center provider Digital Realty Trust, which has 74 hosting spaces totaling more than 13 million square feet (1.2 million square meters) in Europe and North America, announced in 2009 that all its future Data Centers would be built according to Building Research Establishment Environmental Assessment Method (BREEAM) standards. (BREEAM standards are also explained in detail in Chapter 2.)

• Coreix, a 6,000 square foot (557.4 square meter) hosting facility in London, England, advertises itself as the UK’s first carbon neutral Data Center thanks to donations it makes to a conservation charity that preserves rainforests.

• Green House Data, a 10,000 square foot (929 square meter) colocation Data Center in Cheyenne, Wyoming, indicates that it is powered entirely through renewable wind and solar energy.

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Resistance to Green

Despite the merits of green Data Centers, there is still hesitation among some business executives, facilities personnel and IT managers about placing environmental factors among their top criteria when designing a new facility.

This hesitation is typically due to four factors:

• Hesitation to stray from familiar practices: Although Data Centers are often viewed as symbols of rapidly changing, leading-edge technology, their business-critical nature makes those who build and operate them understandably reluctant to deviate from what has worked in the past. Known technology and designs, even if inefficient in some regards, can be preferable to something unproven—or at least unproven to them.

• A lack of company incentives around Data Center environmental considerations: The success or failure of a Data Center project—and those who build or maintain it—isn’t often linked to the room’s environmental impact. As an unidentified Data Center manager was quoted in a 2008 Data Center Journal article, “No one ever got fired for using too much electricity, but people get fired all the time for Data Center outages.”

• Skepticism: Over the years, not all Data Center technologies have provided the benefits they were touted to. Marketing hype has bred healthy skepticism.

• The assumption that green Data Center solutions are too expensive: Information about the costs and savings of green Data Center materials and technologies is not widely available, so many people assume the costs are high and not worth the investment. Because green-related savings typically accrue over the long term, the “too expensive” perception can be reinforced at companies that evaluate performance based upon short time frames. Many businesses conduct operational reviews, set budget allocations, and do financial reporting quarterly, for example, an approach that doesn’t showcase operational savings that take years to accumulate. Any additional upfront capital expenses associated with greening—even if they would ultimately provide a large return on investment over time—become a prime target for anyone trying to trim project costs in the name of so-called “value engineering.”

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Misunderstood Costs of Green Buildings - The World Business Council for Sustainable Development commissioned a global survey of more than 1400 people associated with the property industry and found that even it significantly overestimate the cost to make a building green.

The aggregate perception was that a 17 percent premium is needed to construct a building that meets the U.S. Green Building Council’s minimum LEED certification level—more than triple the actual typical premium of less than 5 percent.

Researchers conducted 45 in-depth interviews with architects, journalists, academics, policy makers, financiers, and property investment firms and polled another 1423 engineers, contractors, landlords, and corporate tenants using telephone questionnaires. The surveys were conducted in late 2006 and early 2007 and spanned eight countries. Results were published in the World Business Council for Sustainable Development’s 2007 Energy Efficiency in Buildings report.

Table 1.4 shows the extra costs that respondents assumed a green building would occur.

Much of the overestimation of costs can likely be attributed to a lack of direct experience that most people, including those polled in the survey, have with green building projects.

Table 1.5 shows the portion of survey respondents who had worked directly on a green building project.

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How, then, do you overcome such resistance? If none of the aforementioned drivers are enough to push green considerations into your Data Center designs and operational practices, consider some of the incentive programs that many utility companies and government agencies offer.

Table 1.4 Estimates of Cost Premium for a Green Building

Table 1.5 Involvement of Property Professionals with Sustainable Buildings

Green Incentive Programs

Several public agencies have realized the societal benefits of Data Centers and commercial buildings in general becoming greener and now offer financial inducements to encourage businesses to upgrade existing rooms or build efficient spaces from scratch. Such programs typically focus on reducing energy consumption and can help offset the upfront costs of making green capital improvements.

Utility Companies

Commercial power providers might not be an obvious source of incentives for reducing energy usage—they’re in the business of selling power, after all—but many offer rebates and strategies for improving power efficiency. That’s because conserving energy ultimately benefits utility companies, relieving demand on major power grids during peak times (typically during hot summer days and cold winter mornings) and lessening wholesale electric prices.

California-based Pacific Gas and Electric Co. (PG&E), for instance, offers rebates for businesses that consolidate older servers, paying 9 cents per kWh plus $100 per kW of demand reduction—up to 50 percent of the total cost of the project. The utility company offers similar rebates for upgrading disk storage equipment.

According to PG&E representatives, the design and construction of any commercial facility that significantly exceeds the state’s energy efficiency standards (Title 24, Part 6 of the California Code of Regulations: California’s Energy Efficiency Standards for Residential and Nonresidential Buildings) has the potential to qualify for financial incentives.

PG&E is also one of four utility companies (Sacramento Municipal Utility District, San Diego Gas and Electric, and Southern California Edison Co. are the others) that, under the auspices of the California Public Utilities Commission, administer a program promoting energy-efficient building and process design and construction.

Known as Savings by Design, the program offers

• Technical design assistance to analyze and design more energy-efficient buildings and process systems

• Owner incentives of up to $500,000 per project to help offset the investment in energy-efficient building and design, subject to project incremental costs

• Design team initiatives of up to $50,000 per project to reward designers who meet ambitious energy-efficiency goals

• Design tools and resources for architects and engineers to support energy-efficient design efforts

Each of these offerings can notably defray the capital costs associated with making green improvements, either at the hardware or building level. Contact the commercial power provider where your Data Center is located to determine what program it offers to promote energy efficiency. Many utility company incentive programs require its involvement at the start of a project, so be sure to contact them at the outset.

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Note - There are countless energy providers worldwide, so it is impractical to list all of them and the specific incentive programs they offer. I chose to focus on Pacific Gas and Electric and its programs for three reasons:

• PG&E is a strong green proponent, through its own direct actions and by fostering green activities among its customers. From 2006 through 2008, the company lead nearly $1 billion in enhanced energy-efficiency programs, the largest gas and electric energy-efficiency effort of its kind by a U.S. utility company.

• The utility company’s coverage area spans the Silicon Valley, which has a large concentration of companies with Data Centers. All told, PG&E provides natural gas and electric service to approximately 15 million people across a 70,000-square mile (181,299 square kilometer) service area in northern and central California.

• Dozens of other utility companies are thinking of offering rebate programs modeled after PG&E’s. PG&E founded the IT Energy Efficiency Coalition in 2007 to facilitate the creation of uniform incentive programs, and more than 24 utilities from the United States and Canada now participate. If the programs are implemented as proposed, a company with Data Centers in multiple locations can consolidate servers in each of them and count on receiving similar rebates.

• For an idea of the monies available for green Data Center construction, recall the NetApp Data Center in Sunnyvale, California, mentioned previously in this chapter. That project, which achieved more than 11.1 million kWh in annual energy savings and more than 6.7 million pounds (3,039 metric tons) of carbon dioxide savings per year, received the largest monetary incentive for energy-efficient new construction ever awarded by PG&E, totaling $1,427,477. The sizable rebate, together with the project’s $1 million in annual energy-related savings, allowed NetApp to recoup the extra capital costs of the Data Center’s green elements in less than 2 years.

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Government Programs

National and local governments worldwide offer financial incentives, usually in the form of tax breaks, to encourage a range of green behaviors. Although many are focused on private consumer activities, such as buying hybrid automobiles and energy-efficient home appliances, businesses with Data Centers can usually tap into rewards offered for using renewable energy and for building more energy-efficient commercial buildings.

Hong Kong, for instance, announced in 2008 that it will offer a tax break to fully offset the capital costs of certain energy-efficient building installations and “environmental protection machinery”—typically equipment that produces renewable energy. A tax deduction equal to 20 percent of the capital expenditure is permitted for 5 consecutive years, beginning the year the installation occurs.

Japan’s Energy Conservation Assistance Law meanwhile offers tax incentives and low interest loans to promote the use of energy conservation equipment and the investment into such technologies. A business can choose between a tax exemption equivalent to 7 percent of the equipment acquisition cost (to a maximum of 20 percent of its payable income or corporate tax) or a bonus of 30 percent depreciation of the equipment acquisition cost in the year it bought it.

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Note - In addition to offering financial incentives for energy efficiency, Japan honors energy-efficient practices in an awards ceremony each year. Commendations are given in multiple categories, with an Energy Conservation Grand Prize going to the most deserving energy-efficient system or resource for the home, commercial, or automobile use.

Awards are presented by the Minister of Economy, Trade, and Industry, the director-general of the Agency of Natural Resources and Energy, and the president of the Energy Conservation Center, Japan.

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The United Kingdom offers tax breaks known as Enhanced Capital Allowances (ECA) for the purchase of building plant and machinery that is energy-efficient or conserves water. (ECAs are also available for cars with low carbon dioxide emissions and hydrogen refueling infrastructure.) The program allows businesses to write off the entire first-year capital cost of the green technologies against their taxable profits.

 

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Note - Surprisingly, few UK businesses have taken advantage of the ECA tax incentives, apparently due to lack of awareness and the difficulty of the process to apply for them. Less than 1 in 20 companies have applied for the allowances according to a research study conducted by the University of the West of England’s Bristol Business School.

The study, Environment and the Corporate Agenda, polled more than 100 finance directors from mostly small- and medium-sized businesses across the UK in 2007 to determine awareness of the tax breaks.

Less than 50 percent of the respondents were aware of the incentives, which were first introduced in 2001. Of those who were aware of the ECAs but did not apply for them, 13 percent said they were discouraged from applying because the process was too complex.

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In the United States, federal tax credits for energy efficiency include a tax deduction of $1.80 per square foot ($19.38 per square meter) for cutting a new or pre-existing commercial building’s heating, cooling, ventilation, water heating, and interior lighting energy costs by 50 percent. Partial deductions of up to $0.60 per square foot ($6.46 per square meter) are available for improvements to the building envelope, lighting, or heating and cooling systems that reduce energy costs by 25 percent to 50 percent. Both percentages are in comparison to the American Society of Heating, Refrigerating, and Air-Conditioning Engineers’ energy-efficiency standard for commercial buildings (ASHRAE Standard 90.1-2001).

Check with both the local and national governments for the region where your Data Center is (or will be) located to learn about what green incentive programs are available. Specific departments that focus on construction or energy issues are a good place to start. A list of U.S.-based green building incentives, including grants, tax credits, and loans, is available on the website of the Environmental Protection Agency: http://www.epa.gov/greenbuilding/tools/funding.htm.

Another excellent source of information about renewable energy and energy-efficiency incentives available in the United States is the Database of State Incentives for Renewables and Efficiency at http://www.dsireusa.org. The website offers an interactive map of the country, allowing visitors to explore the incentives offered—per state—by national, state, utilities, and local agencies. The database is a joint effort of the North Carolina Solar Center and the Interstate Renewable Energy Council and funded by the U.S. Department of Energy.

Who Is Going Green

In addition to knowing the assortment of benefits that come with going green, both in the Data Center and beyond, it’s telling to look at what successful companies have environmental considerations on their agendas.

Green from the Start

Companies that place environmental concerns among their top priorities—those businesses for which social responsibility is a leading part of their philosophy and identity—have been around for decades. Several such companies have thrived in the marketplace, demonstrating that it’s possible to be both financially successful and environmentally considerate.

Greenest Company in the World

Perhaps the most obvious example of businesses that are both profitable and green are those with products that help other companies lessen their own consumption of resources.

Denmark’s Vestas Wind Systems, the world’s largest manufacturer of wind turbines, was named “Greenest Company in the World” in 2007, while earning €4.86 billion(about $7.5 billion) that year. The distinction was given by the British newspaper, The Independent, along with Ethical Investment Research Services, which evaluated nearly 3000 companies for their environmental sustainability.

The eco-friendly nature of Vestas’ product is obviously a key reason for the top rank. Its wind turbines are not only a source of renewable energy but also 80 percent recyclable. The units also generate enough energy within 8 months to offset what it takes to build, move, and disassemble them. To date, the company has installed more than 38,000 wind turbines, providing more than 60 million MWh a year in power to companies in more than 60 countries. Vestas also draws 68 percent of its own energy requirements from renewable sources.

The company projects even greater revenues in future years thanks to growing demand for wind power in the United States, China, and India. (More information about wind power as a source of energy for Data Centers is provided in Chapter 4.)

Most Socially Responsible

Making a commercial product that improves the environment isn’t the only way to be green and profitable at the same time. Whole Foods Market earned $6.6 billion in revenue for 2007, just 1 year after cementing its reputation as the most socially responsible prominent company in the United States.

Whole Foods ranked number one in the category of social responsibility as part of the Annual Reputation Quotient (RQ) Survey conducted by Harris Interactive, which measures the reputations of the 60 most-visible companies in the United States. Whole Foods ranked number 12 overall, scoring 80 out of a possible 100 points. Other categories used to calculate the overall reputation rating are emotional appeal, financial performance, products and services, vision and leadership, and workplace environment.

The company’s reputation for social consciousness has come from activities including store composting programs, selling the products of local growers, and contributions to community nonprofit organizations. Whole Foods has been recognized several times by the U.S. EPA for helping develop renewable energy capacity and in 2006 purchased renewable energy credits to fully offset the electricity used in all its stores, offices, and other facilities. Beginning in April 2008—on Earth Day—the company eliminated disposable plastic shopping bags from its stores in favor of reusable bags and those made of recycled paper.

For all the successes of such companies, however, for years there seemed to be a perception that they were unusual or unconventional—singular exceptions to the prevalent corporate mold that stresses bottom-line financial performance above social agendas. In recent years, though, growing numbers of conventional businesses have opted to adopt greener practices, undoubtedly for many of the same benefits of having greener Data Centers.

If you need any more convincing about the business value in going green, consider some of the activities that some major companies in the financial, technology, and retail markets are pursuing, as outlined in the following sections.

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Note - Each of the companies highlighted here regularly place among Fortune magazine’s Global 500, which annually ranks the world’s largest corporations by revenue. Although it would be exaggerating to claim that their green efforts—or green Data Centers—fostered their financial successes, I believe it’s telling that these companies choose to go green. Large, successful corporations tend to be focused about doing things that make excellent business sense.

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Financial Institutions

Banks are intrinsically conservative, and there are probably no companies more focused on the fiscal implications of various business practices. It’s therefore probably safe to assume that any efforts on their parts to be greener can be taken as an implicit endorsement that doing so makes financial sense.

For instance, Bank of America Corp. in 2007 announced a $20 billion, 10-year initiative to promote environmentally sustainable business practices and low-carbon technologies. Ken Lewis, chairman and chief executive officer, cited the financial benefits of doing so in a 2008 speech to the North Carolina Emerging Issues Forum:

“In my mind, this shift in the financial services industry is the ultimate example of doing well by doing good. Our $20 billion initiative isn’t charity by any stretch. We expect an attractive risk-adjusted rate of return on this capital. Our initiative is an expression of our belief that the direction of the global economy is changing. And we are backing up that belief with cash.”

A 2008 report on the climate change strategies of 40 of the world’s largest banks indicated that a growing number of European, U.S., and Japanese banks are focusing on environmental issues, typically by providing greater financing for clean energy projects and climate-related equity research, and setting internal goals to reduce their own greenhouse gases. The report, “Corporate Governance and Climate Change: The Banking Sector,” was commissioned by Ceres, a U.S.-based coalition of investors, environmental groups, and other public interest organizations.

Among the report’s findings:

• The 40 banks have issued nearly 100 research reports on climate change and related investment and regulatory strategies—more than half of them in 2007. Twenty-three banks referenced climate change in their most-recent annual report to shareholders.

• Twenty-nine of the banks reported their financial support of alternative energy, with eight providing more than $12 billion of direct financing and investments in renewable energy and other clean energy projects.

• Twenty-two of the banks offer climate-related retail products, from preferred-rate green mortgages to climate-focused credit card programs and green car loans.

Citigroup achieved the highest rating among U.S. banks in the Ceres report, and HSBC Group earned the highest rating overall. Each company is pursuing several notable green efforts.

Citigroup

Citigroup announced in 2007 it would devote $50 billion over the next 10 years to green investments, alternative energy, and new technologies. The U.S.-based company has also pledged to reduce greenhouse gas emissions 10 percent by 2011 at its more than 14,000 facilities (compared to 2005).

One of its green projects is a 230,000 square foot (29,729 square meter) Data Center that it brought online in 2008, in Frankfurt, Germany. The facility, which supports Citigroup operations in Europe, the Middle East, and Africa, reportedly consumes only 30 percent of the power of a comparable conventional Data Center, avoids 23.5 million pounds (10,659 metric tons) of carbon dioxide emissions per year, and reduces water consumption for cooling by 13.2 million gallons (50 million liters) per year. It is the first Data Center to ever receive the U.S. Green Building Council’s top LEED certification of platinum.

Citigroup was also one of 40 companies to participate in the pilot phase of the U.S. Green Building Council’s Portfolio Program, which focuses on integrating green building and operational measures into a company’s business practices. Through that program, 3 Citi branch offices were certified as green by 2008 and another 27, bearing the same features, were being reviewed and anticipated to be certified.

The company additionally purchases significant quantities of green power—more than 55 million kWh in 2008 and more than 36 million kWh in 2007.

Citigroup scored 59 points on the Ceres report. (The median score of the 40 banks was 42 out of a possible 100.)

HSBC Group

The London-based HSBC Group became the first major bank to become carbon neutral in 2005, offsetting all carbon dioxide emissions from its facilities and employee travel through a combination of energy reduction measures and the purchase of green electricity and carbon offsets. HSBC spent $11.4 million on carbon offsets, mitigating 4.14 billion pounds (1.88 million metric tons) of carbon dioxide from 2005 to 2007.

HSBC (named after its founding member, The Hong Kong and Shanghai Banking Corporation Limited) in 2007 established the HSBC Climate Partnership, investing $100 million with four environmental charities—The Climate Group, Earthwatch Institute, Smithsonian Tropic Research Institute, and the World Wildlife Fund—to counter the impact of climate change upon people, forests, water, and cities.

HSBC in 2008 also set reduction targets for energy (8 percent), water (11 percent), waste (10 percent), and carbon dioxide (6 percent) to be accomplished by senior executives by 2011 and began using software that automatically shut down computers at the end of the work day, powering down up to 300,000 systems.

HSBC scored 70 points on the Ceres report. The company also received the first-ever FT Sustainable Bank of the Year award in 2006. Created by London’s Financial Times and the International Finance Corporation, the FT Sustainable Bank awards recognize banks for incorporating social, environmental, and corporate governance objectives into their operations.

Technology Companies

It’s no surprise that high-tech companies are embracing green. The products they make are often ideal candidates for implementing efficiency improvements. A computer that consumes less energy, for instance, or a networking device that coordinates building environmental systems to work more efficiently, are model green products.

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Note - Each of the technology companies cited in the following pages have authored multiple whitepapers about how to use their hardware and software offerings to be more energy efficient and environmentally friendly in the Data Center.

Those strategies are not included in the company profiles here, which focus on what the businesses are doing to be greener themselves, but some are covered in Chapter 8, Chapter 9, and Chapter 10, “Greening Other Business Practices.”

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Cisco

Cisco announced in 2008 that it would reduce its greenhouse gas emissions by 25 percent by 2012 (compared to 2007), saving a projected 1.2 billion pounds (543,000 metric tons) of carbon dioxide. The reductions are to be accomplished through energy-efficient practices in its Data Centers and lab spaces such as server and storage virtualization, by using intelligent network architecture to reduce buildingwide energy usage and optimizing how building floor space is used, and by avoiding business travel through collaboration technologies.

The company has developed and piloted two software programs to improve energy efficiency within its facilities—the Automated Management Power System (AMPS) that powers down lab equipment when not in use and tMon, a web-based monitoring system that alerts when equipment has been left on. Use of the applications conserved 5.86 million kWh of energy in 2008.

Some of the company’s internal green efforts include reducing water consumption (using reclaimed water at its California sites save more than 81 million gallons [306.6 million liters] of water per year), recycling programs, and purchasing green power. The company bought 342 million kWh of green power for its 2008 fiscal year and a projected 484 million kWh for fiscal year 2009, for instance, and at the beginning of 2009 was ranked the seventh largest Fortune 500 purchaser of renewable energy in the United States by the U.S. Environmental Protection Agency.

The company also actively pursues opportunities to use networking technology to help others be greener. For instance, as part of the Clinton Global Initiative in 2006, Cisco allocated $15 million for the Connected Urban Development Program to streamline the flow of people and traffic in urban areas and reduce carbon emissions from cars, trains, buses, and other forms of transportation. The program was initially piloted in Amsterdam, the Netherlands; San Francisco, California; and Seoul, Korea and is now being introduced into several other cities around the world.

Cisco is additionally developing, in partnership with the United States government’s National Aeronautics and Space Administration (NASA), an online global monitoring platform, called Planetary Skin, to track and analyze worldwide environmental conditions on a near-real time basis. Drawing upon data gathered by satellites and air-, land- and sea-based sensors, the platform is intended to help governments and businesses mitigate climate change and efficiently manage energy and natural resources. Planetary Skin’s first pilot project, focusing on preventing the deforestation of tropical rainforests in Africa, Latin America, and Southeast Asia, began in 2009.

Hewlett-Packard Company

Fortune magazine named Hewlett-Packard Company one of its “10 Green Giants” in 2007, praising the hardware maker for its expansive e-waste recycling activities (HP equipment is fully recyclable and the company also accepts any brand of gear for recycling), ensuring that its major suppliers are environmentally sensitive and environmental accountability by way of its comprehensive Global Citizenship Report.

In addition to these efforts, HP has set several environmental reduction targets. By 2010, the company intends to reduce energy consumption and greenhouse gas emissions from its operations and products 25 percent (compared to 2005), reduce water consumption 5 percent (compared to 2007), and recover 2 billion pounds (7.26 million metric tons) of its products.

The company additionally purchased 61.4 million kWh of renewable energy and renewable energy credits in 2007, up from 11 million kWh in 2006.

HP opened a 70,000 square foot (6500 square meter) Data Center in Bangalore, India, in 2007, and anticipates saving 7500 MWh of energy per year, compared to conventional server environments by automatically adjusting the room’s air handlers, fans, and vents based on information from 7500 sensors distributed throughout the room.

IBM

IBM in 2007 announced a $1 billion per-year initiative, Project Big Green, to increase Data Center energy efficiency, both as a service offering to customers and for its own more than 8 million square feet (743,224 square meters) of hosting space.

The U.S.-based company has also set goals to reduce carbon dioxide emissions associated with energy use 12 percent by 2012 (compared to 2005) through energy conservation, renewable energy, and the purchase of renewable energy certificates. The company purchased 453,000 MWh of renewable energy and renewable energy certificates in 2007—about 9 percent of its global electricity purchases that year. IBM estimates avoiding nearly 6.61 billion pounds (3 million metric tons) of carbon dioxide emissions from 1990 to 2006 through energy conservation efforts.

IBM also promotes programs to reduce employee commuting and estimates that nearly one-third of its 100,000 worldwide employees participates in its work-at-home or mobile employees program. IBM estimates that, in the United States, the work-at-home program saved 8 million gallons (30.3 million liters) of fuel and conserved 135.8 million pounds (61,600 metric tons) of carbon dioxide in 2006.

IBM was the first semiconductor manufacturer to voluntarily set reduction targets for perfluorocompound emissions, which are considered greenhouse gases. (Semiconductor manufacturers use PFCs for etching and cleaning.) In 1998, the company set a goal of a 40 percent emission reduction by 2002 (compared to 1995), which it met. From 2000 to 2005, it cut emissions more than 57 percent, from 1 million pounds (479 metric tons) to 450,000 pounds (204.1 metric tons).

IBM was also the first two-time recipient of the U.S. EPA’s Climate Protection Award—first in 1998 and again in 2006.

Retailers

If financial institutions are typically conservative and technology companies are often bold, somewhere in the philosophical middle are retail companies.

Retailers are a key link in the chain through which people consume resources. Food, clothing, household goods, automobiles, and more are readily available for hundreds of millions of people to buy because of retail companies. The argument has been made that by providing products conveniently and inexpensively that major retailers foster the more rapid consumption of resources—the opposite of green. (Imagine if instead of buying an item through your local store that you had to make it yourself. You likely wouldn’t consume it so quickly.)

As the middleman between supplier and consumer, though, retailers—especially major ones—are also in a position to influence the behaviors of both consumers and suppliers.

The Home Depot

The Home Depot Foundation in 2007 pledged to provide $400 million in grants in the next 10 years to nonprofit groups to develop 100,000 energy- and water-efficient affordable homes and for planting and preserving 3 million community trees.

The U.S.-based company also budgeted $50 million for internal energy-efficiency projects. With store lighting as its biggest source of energy consumption, the company in 2006 upgraded to more efficient lighting in approximately 600 stores and introduced strict lighting schedules. It also upgraded to more efficient air-conditioning systems in 200 stores. Other improvements have included the use of reflective roof membranes and shorter rooflines, and using low-watt bulbs in all lighting displays.

The Home Depot’s largest green impact, though, has come through its influence on suppliers and customers. The company completes an estimated 1.3 billion customer transactions per year. Its Eco Options program highlights products that have less environmental impact than traditional ones, giving customers the ability to be greener in those transactions if they choose to. Eco Options products offer benefits in one or more of five categories:

• Sustainable forestry

• Energy efficiency

• Clean water

• Clean air

• Healthy home

Approximately 3100 products received the Eco Options designation when the program began in 2007, and the quantity doubled by 2009.

Wal-Mart

Wal-Mart chief executive Lee Scott made news in 2005 when he announced during a speech to employees, Twenty-First Century Leadership, that the company’s environmental goals were to be supplied 100 percent by renewable energy, to create zero waste, and to sell products that sustain natural resources and the environment.

Although no deadline was given to achieve those goals, the company specifically pledged to spend $500 million per year to double fuel efficiency in Wal-Mart’s truck fleet by 2015, reduce greenhouse gases 20 percent by 2012, reduce energy use in Wal-Mart stores 30 percent, and reduce solid waste from U.S. stores by 25 percent by 2008.

In 2008 the Wal-Mart met its 2007 Clinton Global Initiative pledge to sell only concentrated liquid laundry detergent in all its U.S. stores and Sam’s Club. The change is projected to save more than 400 million gallons (1.51 billion liters) of water, more than 95 million pounds (43,091 metric tons) of plastic resin, and more than 125 million pounds (56,699 metric tons) of cardboard.

Wal-Mart in 2007 announced the start of a program in the United States that would show preference to suppliers who set goals and aggressively reduced their own greenhouse gas emissions. That same year, the company announced the purchase of solar energy to power 22 facilities, reducing greenhouse gas emissions by an estimated 14.3 million to 22 million pounds (6500 to 10,000 metric tons) per year.

The company in 2006 installed supplemental diesel engines on all its trucks that make overnight trips. Turning off primary truck engines during breaks and using the auxiliary units to warm or cool the cabin and run the communication system is estimated to conserve 10 million gallons of diesel fuel and save 220.5 million pounds (100,000 metric tons) of carbon dioxide.

Wal-Mart announced the goal to reduce packing materials 5 percent by 2013 and becoming “packaging neutral” by 2025. Just the 5 percent reduction is estimated to reduce millions of pounds of trash from reaching landfills and save 1.47 billion pounds (667,000 metric tons) of carbon dioxide.

Summary

A green Data Center is one that, compared to conventional server environments, uses resources more efficiently and has less impact upon people and the environment.

Several conditions today are driving companies to design and operate greener Data Centers:

• Although power consumption within conventional Data Centers is growing dramatically, there is a finite quantity of properties that can be provided with ample megawatts and are also otherwise suitable to house a server environment.

• Green Data Centers are less expensive to operate than others; any extra costs to implement green technologies or materials pay for themselves many times over during the life of the facility.

• The greater efficiencies of a green Data Center extends its power and cooling resources.

• A green Data Center can better meet the targets for reducing energy consumption and carbon dioxide emissions that are now appearing more and more frequently on the agendas of governments around the world.

• New Data Center technology advances naturally provide opportunities to be greener.

• Consumers generally prefer to do business with companies that have green practices, and the Data Center is a prominent forum in which to do so.

Although you can do more to green a Data Center that you own than one you lease, you can still reduce energy consumption at a colocation facility—lowering your bills and increasing your relative capacity—through your hardware choices and operational activities. You can also investigate how efficient and environmentally sensitive various hosting facilities are when you consider which of them to do business with.

Despite the benefits of green Data Centers, some people are hesitant to pursue green technologies because they are reluctant to adopt practices and technologies that they are unfamiliar with; they assume green solutions are too expensive; their company doesn’t provide rewards for making a project or facility greener; and they are skeptical that green technologies can provide the benefits they claim.

Several public agencies offer financial incentives for constructing or retrofitting commercial buildings with green features. Many utility companies, in addition to being excellent sources of information for energy-saving strategies, offer rebates for capital projects or hardware purchases that improve energy consumption rates. Many governments meanwhile offer tax breaks for using renewable energy or constructing or upgrading buildings to be energy-efficient.

The business value of building greener facilities and adopting greener operational practices can be seen in the growing number of major corporations that are doing so. Industry leaders across multiple business sectors have adopted green measures including purchasing renewable energy, reducing greenhouse gas emissions, using automation systems to turn off power-consuming items such as lights and personal computers during nonbusiness hours, making charitable donations to environmental causes, and more.

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