Chapter 1: Going Green in the Data Center

Cisco Press

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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.


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.


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.”


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.


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

Country of Respondents

Perceived Cost Premium for Green

Building

Brazil

22%

China

28%

France

12%

Germany

17%

India

11%

Japan

16%

Spain

19%

United States

16%

Overall

17%

Table 1.5 Involvement of Property Professionals with Sustainable Buildings

Country of Respondents

Direct Involvement with Green Building

Brazil

9%

China

10%

France

8%

Germany

45%

India

5%

Japan

3%

Spain

9%

United States

16%

Overall

13%

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.


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.


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.


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.


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.


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.


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.


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.


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.

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