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General Information
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July 31, 2009
• Vol.31 Issue 20
Page(s) 34 in print issue
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American Clean Energy & Security Act Of 2009
Electricity Rates Will Rise, But Owners Can Control Costs
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| Key Points
• Cap-and-trade laws won’t directly affect data centers owned by small or medium-sized enterprises.
• Data centers, along with everyone else, will see electricity rates rise via rate hikes.
• Despite higher rates, increasing efficiencies and reducing energy use can keep data center costs low and might even reduce them. | | “There are no cap-and-trade schemes in existence or in planning that would affect small data centers,” says Andy Lawrence, research director in eco-efficient IT with The 451 Group, which owns Tier1 Research. This doesn’t mean, however, that H.R. 2454, the 932-page American Clean Energy and Security Act of 2009, which passed in the House of Representatives June 26, won’t affect data centers of all sizes.
The cap-and-trade portion of the act is directed at true high carbon emitters such as power plants and big manufacturers. Under the cap-and-trade rules, big emitters may be given or will have to purchase carbon offset certificates. If the emitter doesn’t produce that much carbon, it can sell its certificates in a carbon exchange market to be established by the act.
“Cap and trade is a small piece of the bill, but it is a piece that speaks to how emission of greenhouse gases can be priced to reduce emissions,” says Kathrin Winkler, a director of the Green Grid and the senior director of corporate sustainability at EMC.
Data centers don’t emit carbon—at least not directly. The electricity they use is generated at the power plant and so is the carbon resulting from data center energy consumption. Power plants will pay for those emissions, but they’ll pass the costs along as higher rates.
The legislation “will hit data centers through an increase in electricity bills by 20% or more, depending on the way [the costs of cap and trade] are passed through,” says Bill Mottram, managing partner of Veridictus Associates (www.veridictusassociates.com) and head of the sustainability portal of the Wikibon Project. “Up to 30% of the energy of an enterprise could be absorbed by a data center,” he says. So if your company hasn’t already embarked on greening its data center(s) by reducing energy consumption, now is the time to start.
 Reducing Energy Use
The Green Grid’s focus is on reducing energy use and increasing energy efficiency in data centers. The consortium of companies involved in the data center business is currently working on three initiatives to achieve those goals. “We are trying to collect metrics on what people are trying to do to conserve energy,” Winkler says. “We are also collating a set of design best practices, and the Green Grid Academy has online training for people to understand these metrics.” The online training may be especially relevant to small and medium-sized enterprises.
The Uptime Institute (www.uptimeinstitute.org), a privately owned research and consulting organization, also focuses on helping data centers reduce energy consumption and increase efficiency. “You take so much energy into a building to provide energy to the computers,” says John Stanley, a project manager with the Uptime Institute, “so focusing on IT efficiency first has the potential to save a lot of energy.”
As Stanley explains, if power usage effectiveness—the ratio of power use by IT equipment to all power use in a data center—is two, then it takes 2 kilowatts to provide 1 kilowatt to the IT equipment. “If you save 100 watts on the IT equipment, then you save 200 watts altogether,” he says. Using less electricity for the IT equipment also generates less waste heat, so IT savings are compounded by reduced air and power conditioning. “Start with the efficiency of the IT systems,” Stanley says.
According to Tier1 Research, a medium-sized data center with a 1-megawatt draw at 10 cents per kilowatt-hour can save $87,600 yearly with just a 10% increase in energy efficiency. “Twenty or 30% is entirely achievable,” Lawrence says.
Recommended Means
Server virtualization is universally recommended as a means of saving energy in data centers. Mottram also recommends virtualizing data storage and using other data-reduction technologies, such as data deduplication (eliminating redundant data), compression, and taking “snapshots” of dynamically changing data instead of recording every instance of it. Of course, snapshot frequency depends on the data’s importance. “Virtualization works for both servers and for storage,” Mottram says. “It can get you up to 80%-plus utilization levels with storage.”
Server power supplies are key to saving IT energy. “A lot of power supplies are inefficient,” Stanley says. He estimates that converting from AC to DC may cost a quarter of a server’s input power. “Data center operators can ask equipment providers for more power-efficient servers,” he says. “The EPA has just come out with standards for Energy Star-rated power supplies and devices.”
Stanley also recommends turning off “comatose” servers, i.e., those that are plugged in and turned on but aren’t doing anything or anything important. These are often left running some obsolete application. “Ten percent of comatose servers in a data center isn’t unusual,” Stanley says.
Avoid Capital Expenses
Although reducing energy consumption is great from a green perspective, an even more compelling reason for enterprises to reduce energy consumption is to avoid the capital expenses of building a new data center. “If you can improve the efficiency of the IT equipment in your first data center, then you don’t have to build a new one,” Stanley says. “If you can delay a $100 million data center cost by a year, it can help your bottom line a lot.”
In spite of its effects on electricity rates, the American Clean Energy and Security Act can be an opportunity. “A significant portion of emissions reduction can be achieved by energy conservation,” Winkler says. “This bill will drive electricity rates up, but if it drives efficiency up, too, then it may not drive costs up.” 
by Bridget Mintz Testa
Direct Implications Of The Act For Data Center Owners
Two sections of the American Clean Energy and Security Act may directly affect data center owners and operators. Section 201, "Greater Energy Efficiency in Building Codes," establishes building energy reduction requirements via new nationwide building codes. These new codes mandate a 30% decrease in energy use for commercial buildings constructed after the Act is passed. New commercial building energy reduction targets hit 50% on Jan. 1, 2015. Starting Jan. 1, 2018, new commercial building energy reduction targets will rise by 5% every three years through Jan. 1, 2030, (55% by 2021, 60% by 2024, etc.). The reductions will be measured against energy use allowed by pre-act building codes.
Section 202, “Building Retrofit Program,” will establish a national Retrofit for Energy and Environmental Performance program. REEP’s purpose is to achieve maximum energy use reductions and “significant” improvement in water use and other environmental “attributes.” REEP could, among other things, provide low-cost or subsidized loans to companies that retrofit their buildings by the regulations. It could also award direct financial payments of up to 50% of retrofit costs.
For the complete text of HR 2454, go to energycommerce.house.gov/Press_111/20090515/hr2454.pdf.
To track the bill’s progress through Congress, go to www.govtrack.us/congress/bill.xpd?bill=h111-2454. |
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