The computing industry is becoming increasingly more eco-aware in response to growing environmental awareness around the world, particularly with respect to global warming. Through the development of energy-efficient products and the formation of industry groups such as The Green Grid and the Climate Savers Computing Initiative, the industry is helping businesses and organizations conserve energy while continuing to increase the compute capacity of their data centers.

Additional encouragement is coming from utilities in many parts of the United States in the form of energy efficiency incentives or rebates. By encouraging the purchase and use of energy-efficient technologies, these incentives help data centers reduce energy costs, achieve improved performance, contribute to global environmental efforts, and reduce capital expenditures.
 
There are dozens of incentive programs from local utilities or state energy efficiency programs that give rebates to customers who reduce their energy usage through improved efficiency or the use of renewable energy sources. A growing number of these programs are customized for data centers. They encourage everything from server consolidation projects to energy efficiency “refreshes,” such as installing more efficient servers and cooling technology.

The incentive for incentives
Despite great gains in power-efficient computing performance over the years, the growing digital economy and its increasing reliance on information technology has made data centers significant consumers of energy. The Environmental Protection Agency (EPA) estimates the energy consumed in 2006 by the nation’s servers and data centers to be about 61 billion kilowatt-hours (kWh) – 1.5 percent of total U.S. electricity consumption – for a total electricity cost of about $4.5 billion.  This estimated level of electricity consumption is more than the electricity consumed by the nation’s color televisions and similar to the amount of electricity consumed by approximately 5.8 million average U.S. households (about 5 percent of the total U.S. housing stock). 

Under current efficiency trends, national energy consumption by servers and data centers could nearly double again in another five years (i.e., by 2011) to more than 100 billion kWh, reaching a $7.4 billion annual electricity cost.  The peak load on the power grid from these servers and data centers – currently estimated to be approximately 7 gigawatts (GW) – would rise to 12 GW by 2011, necessitating the addition of 10 power plants. 

The EPA in its recent report (August 2007) to Congress on server and data center energy efficiency calculated significant potential for improving the energy efficiency of servers and data centers by 2011. The agency estimated that the cumulative savings in electricity costs from 2007 to 2011 could vary from roughly $6.2 billion to roughly $17.4 billion based on scenarios ranging from the current efficiency trends to a state-of-the-art scenario.

The amount of money spent powering data centers is also becoming a concern. According to the research firm Gartner, as power requirements continue to grow, energy costs will emerge as the second highest operating cost (after personnel) in 70 percent of worldwide data center facilities by 2009.  The average annual power costs for a 100,000 square-foot data center are already nearly $6 million. 

Many data centers are also reaching the limits of the power capacity for which they were designed. Gartner says 50 percent of data centers will have insufficient power and cooling capacity by 2008.  This means increasing processing capacity will require either improving efficiency of the current data center or building an additional one. In some areas, data centers simply cannot get any more power. This is driving often expensive relocation to areas with available power.

Another factor driving utility incentives and interest in energy efficiency is that many companies are anticipating growing government pressure to reduce energy usage and are looking for ways to help reduce global warming and be good global citizens. The writing on the wall for this is the passage of public law 109-431 by the U.S. House of Representatives. This law requires the EPA to investigate energy costs and electricity consumption by servers and data centers and the potential effects of moving to more energy-efficient systems.

The incentive for utilities
In response to customer concerns, utilities are also looking for ways to provide greener power. One way utilities can be green is to reduce power demand in the first place by encouraging greater energy efficiency from their customers. This seems to run counter to a utility’s self interest, though, since profits are normally tied to energy sales. But in a growing number of states, utilities are being motivated to promote energy efficiency by “decoupling” and other forms of regulatory reform. Decoupling separates a utility’s ability to make money from the amount of electricity that it sells.
Decoupling uses a rate adjustment mechanism to break the link between a utility's ability to recover agreed-upon fixed costs, including its profit margin, from the actual volume of sales that occur. The basic principle is that if the actual sales are less than what was forecasted, there is a slight upward adjustment in rates to compensate the utility. California was the first state to adopt decoupling, discontinued it during deregulation in 1996, but then brought it back in a groundbreaking energy efficiency campaign that includes $2 billion of approved investments in efficiency from 2006 to 2008. Other states adopting, or in the process of adopting, various forms of decoupling include Oregon (natural gas), Maryland, Idaho, New York and Minnesota.
Available incentive programs
In August 2006, Pacific Gas and Electric (PG&E) in California became the first utility to offer rebates to business customers that replace existing computing equipment with new, high-efficiency servers or implement virtualization and server consolidation projects. In 2007, PG&E extended its rebate program to data center disk storage equipment.

Through PG&E's High Tech Energy Efficiency Incentives program, qualifying customers can earn a rebate of up to $4 million per project site. The program has industry support from many high technology companies such as VMware, Intel, HP, Dell, IBM, and Rackable Systems.

For virtualization, incentives are based on the amount of energy savings achieved through data center consolidation. PG&E customers apply for the rebate before pursuing a virtualization project. PG&E currently offers a flat rebate of $158 per server that is consolidated through the project. In addition to the rebate, the changes customers make are estimated to save them $300 to $600 in annual energy costs for each server that is virtualized.  Those savings can almost double when reduced data center cooling costs are also taken into account.  San Diego Gas and Electric (SDG&E) and Austin Energy have similar programs.

Other utilities currently offering or planning incentives:
• Avista Utilities, the utility serving Spokane, Wash., offers rebates of up to $5,000 per rack for customers implementing a chip-level liquid cooling solution from SprayCool.
• Xcel Energy, a utility with operations in eight states (Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin) offers a custom project program. Business customers can also receive up to $15,000 towards an efficiency study to identify savings.
• Austin Energy in Austin, Texas has data center programs providing rebates on various efficiency measures, including server virtualization and efficient cooling practices.
• In Con Edison territory, data centers that can permanently reduce electric demand by at least 20 kilowatts can get help paying for their capital improvement costs with an incentive of $600 per kilowatt from New York State Energy Research and Development Authority (NYSERDA). There is a cap of 65 percent of costs or $1.25 million per facility. NYSERDA is also examining potential incentives for data center procurement and energy management but has not yet finalized any details.

Tips on qualifying for incentives and maximizing the advantage you get from them:

1. Find available programs. The first step is to contact your electrical utility or state energy-efficiency program to determine what energy-efficiency incentives may be available for IT consolidation or data center energy-efficiency improvement projects. You can also check the Database of State Incentives for Renewables & Efficiency (DSIRE). This comprehensive source includes information on state, local, utility and federal incentives that promote renewable energy and energy efficiency. Be aware that most incentive programs have detailed application procedures and require project pre-notification. So the next step, after finding an organization offering a rebate or incentive, is to contact them and find out what they require.
2. Assess energy usage. Many organizations only see a monthly power bill of their total consumption. Consequently, those in charge rarely see the impact of their equipment decisions and have little way to prove their changes saved energy. To participate in a rebate program, you will need to be able to determine the power usage for the total data center or the systems or hardware you are targeting to improve. Specific measurements may include chillers, air handling units (HVAC), and IT equipment such as servers and storage arrays. Measurement methods will depend on your facility’s power monitoring capabilities and the recommendations of the utility or state energy-efficiency team. The best measurements include both peak and seasonal events to better comprehend the energy provisioning required.
3. Take advantage of project design and energy-efficiency teams. Many energy-efficiency groups can provide project support to help maximize energy-efficiency gains, cost savings, and incentives. Partnering with your utility will help ensure you meet all of the program requirements. 
4. Calculate energy savings. You will probably need to provide direct measurements of your power usage before and after your project is implemented or perform other required calculations of the energy savings benefits. Your utility or efficiency program will help you with this requirement.
5. Submit incentive or rebate payment application. Programs generally require proof that changes have been done and energy is being saved. You can reap additional goodwill benefits from your project by publicizing your energy-efficiency efforts.

Summary
Businesses now have more incentive than ever to improve the energy efficiency of their data centers. New energy-efficient technologies and solutions are available from a wide variety of manufacturers, system integrators, and industry organizations to help businesses solve the energy crunch in their data centers, meet their growing compute needs, and enable them to do their part to help reduce carbon dioxide emissions. What’s more, through incentives and rebates utilities are making it financially rewarding to act sooner, rather than later.

Check with your utility to see what incentives might be available for your IT operations. If you’re a larger company with data centers in several states, you many want to work simultaneously with several utilities. If you work for a utility interested in developing an incentive program, you may want to compare notes with other utilities. Creating standardized program requirements and incentives may increase participation and deliver better results for multi-state customers.

________________________

About the Author: Radhakrishna Hiremane (RK) is a product marketing engineer at the Server Platforms Group Marketing. He is responsible for setting enabling and marketing strategies for virtualization technologies on Intel servers.
 
RK joined Intel in 1999 as a software engineer working on Ethernet device drivers for 10/100 and Gigabit products and has represented Intel in the development of the Uniform Driver Interface specification. As part of the Software Solutions Group, he has also worked in the area of software performance analysis and optimization on large SMP Intel® Itanium® processor-based systems running both Linux* and Windows* operating systems. He holds two U.S. patents and has published several conference papers and articles.
 
RK holds a bachelor's degree in electronics and communications engineering, from India, a master’s degree in computer engineering from the University of New Mexico, and an MBA in business strategy from Arizona State University.
__________________________

1  “Report to Congress on Server and Data Center Energy Efficiency Public Law 109-431,” U.S. Environmental Protection Agency, ENERGY STAR Program, August 2, 2007. 2 Ibid.

3 Ibid.

4 Ibid.

5 Ibid.

6 “Gartner Says 50 Percent of Data Centers Will Have Insufficient Power and Cooling Capacity by 2008,” Gartner Inc. press release, November 29, 2006.

7 Mark, Roy, “House Green Lights EPA Data Centers Study,” Internetnews.com (July 13, 2006)

8 Gartner press release.
 
9 “PG&E Collaborates with Silicon Valley Companies to Announce Rebates for New Energy Efficient Server Technology,” PG&E press release, November 8, 2006. (See http://www.pge.com/news/news_releases/q4_2006/061108.html)

10 PG&E press release.

11 Miller, Rich, “PG&E Offers Rebates for Virtualization,” article in Data Center Knowledge, November 15, 2006.

Comments (0)

Subscribe to this comment's feed