Hyperscale data centers make commitments to renewable energy

The likes of Google and Microsoft acknowledge there is still room to improve, and pledge to do so.

Sep 1st, 2016
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By Patrick McLaughlin

An often-cited nine-year-old report from the United States Environmental Protection Agency (EPA) estimated that data centers accounted for approximately 1.5 percent of the country’s total electricity consumption. The EPA’s “Report to Congress on Server and Data Center Efficiency,” published in August 2007, was written in response to the U.S. Congress’s Public Law 109-431, which requested such a report. The EPA said the 133-page document “assesses current trends in energy use and energy costs of data centers and servers in the U.S. and outlines existing and emerging opportunities for improved energy efficiency.”

Based on data gathered through 2006, the report states, “The energy used by the nation’s servers and data centers is significant. It is estimated that this sector consumed about 61 billion kilowatt-hours (kWh) in 2006 (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 approximately 5.8 million average U.S. households (or about five percent of the total U.S. housing stock).”

The report detailed practices that could be taken to avoid a continued escalation of electricity consumption by data centers. In a practical sense, the report also served to kick off the EPA’s EnergyStar program for data center facilities and, later, for data center equipment. From a public relations standpoint, the report cast data centers as energy hogs. In doing so, it branded the largest data centers-frequently referred to as hyperscale data centers-as hyperconsumers of electricity.

Electricity sources

In the nine years since that report was issued, significant strides have been made to improve energy efficiency among data centers of all types and sizes. The practices, techniques and technologies that enable this efficiency have been well-documented and continue to be. Also in the years since the publication of that EPA report, attention has begun to focus not just on how much electricity data centers use, but also facilities’ total carbon footprint. Among the characteristics of a data center’s carbon footprint are the sources of the electricity it uses, i.e. coal-fired power plants versus renewable sources. Several owners of some of the world’s largest hyperscale data centers-including Microsoft, Google and Facebook-have embarked on awareness campaigns to emphasize their increasing use of renewable energy sources and their shrinking carbon footprints.

On May 19, 2016, Microsoft’s president and chief legal officer Brad Smith authored a post on the company’s blog titled “Greener data centers for a brighter future: Microsoft’s commitment to renewable energy.” He began the lengthy post by stating, “As the world increasingly races to a future based on cloud computing, a host of new and important public issues are emerging. One of these issues involves the energy and sustainability practices of the data centers that power the cloud. Over the past year we’ve spent considerable time focusing on our work in this area at Microsoft.

“When it comes to sustainability, we’ve made important progress as a company since the start of this decade, but even more important work lies ahead … We need to keep working on a sustained basis to build and operate greener data centers that will serve the world well. For Microsoft, this means moving beyond data centers that are already 100-percent carbon neutral to also having those data centers rely on a larger percentage of wind, solar and hydropower electricity over time. Today roughly 44 percent of the electricity used by our data centers comes from these sources. Our goal is to pass the 50-percent milestone by the end of 2018, top 60 percent early in the next decade, and then to keep improving from there.”

Smith detailed some of what the company has done already to achieve carbon-neutrality, which it accomplished in 2012. “We’ve achieved this progress by driving efficiencies, charging our business units a fee on carbon, and investing in sustainable energy projects and technologies,” he said. “When we’re not able to eliminate our energy use or directly power our operations with green energy, we purchase renewable energy certificates to reduce carbon emissions. When we include the use of these certificates, 100 percent of our consumption has been powered by renewable energy since 2014.”

Google’s approach

Another hyperscale data center owner, Google, similarly addressed its use of renewable energy and contractual agreements that help it drive down its carbon footprint. On its website the company explains, “Across Google, we’re currently using renewable energy to power over 35 percent of our operations. We’re committed to using renewable energy like wind and solar as much as possible. So why don’t we build clean energy sources right on our data centers? Unfortunately, the places with the best renewable power potential are generally not the same places where a data center can most efficiently and reliably serve its users. While our data centers operate 24/7, most renewable energy sources don’t-yet. So we need to plug into the electricity grid, and the grid isn’t currently very green. That’s why we’re working to green the electricity supply as a whole-not just for us, but for everyone.

“We’ve purchased renewable energy from wind farms, adding new clean power near our data centers and the communities around us,” Google continues. “We found an opportunity in power purchase agreements (PPAs)-long-term contracts (typically 20 years) to buy clean energy from a particular producer.”

Google explains that a PPA works as follows: “1) We purchase energy from a renewable project developer. 2) We then sell that energy right back into the grid at a wholesale price. 3) We apply the renewable energy certificates [RECs] to the non-renewable ‘brown’ energy used at our data centers.”

The company says it purchases clean energy via PPAs “because they create new clean energy now as well as help the renewable energy industry grow in the long-term.”

In a document titled “Google’s PPAs: What, How and Why,” which was initially published in 2011 and most recently revised in 2013, the company says it has “pledged to reduce its carbon footprint to zero. Zero is an aggressive goal, not easily achieved by any one measure, so we pursue a multi-pronged approach to get there. Efficiency is one prong of the approach and carbon offsets is another. But a very important third prong of the approach is the purchase and use of carbon-free renewable electricity to power our data centers.”

Google purchases clean energy via Power Purchase Agreements, which the company explains create new clean energy now and help the renewable energy industry grow in the long-term.

A fundamental principle of Google’s approach to PPAs is what it calls “additionality.” “Fundamentally, a renewable energy purchase is additional if it has an effect in the real world, be it direct or indirect. A direct effect would be causing a new renewable project to be built. An indirect effect would be increasing demand for renewable energy such that market pressures are able to encourage new investment.” A second principle, the company says, is that its project “should go beyond basic additionality and directly address problems that limit the growth of the renewable industry.”

In a section of the document headlined “Meeting our principles,” Google acknowledges, “Additionality is a tricky concept. Perhaps it is easiest to give an example of what’s not additional.” It sets the scenario of a power company with a functioning wind farm that was built years ago and provides power to the grid. The power company has no plans to build more wind farms. “One day, they learn that Google is looking to purchase renewable electricity. The power company figures it could sell Google the output of their wind farm; for their existing customers they would just make up the difference by buying some other source of energy, perhaps from the coal plant down the street.

“In our view, this is not additional. We’d be handing money over for green electricity, but in the grand scheme of things, nothing would change. The carbon output of the whole system would be the same and no new renewable generation would be built.”

Under a different scenario-one in which a wind farm does not yet exist-Google’s desire to purchase renewable electricity would spur the development of a new wind project by a company that wants to build one but needs a reliable customer to help make the project financially feasible. “Let’s change the scenario one more time,” Google follows-up. “Perhaps a company does own an operating wind project, and is known to be a serial developer of renewable energy projects. They use the cash flow from one project to finance the next, or to convince Wall Street that they have bankable income. As in the previous case, we would consider the power from this wind farm as additional since we have confidence that the proceeds will be used to finance additional renewable power.”

On the topic of RECs-renewable energy credits-Google tackles its nuances as well. “We are often asked: If RECs are a tradable commodity, why not just buy RECs from a renewable project and not mess with the energy? The answer in this case is that buying a few years’ worth of RECs from a renewable project does not provide the stable and sizable cash stream that a renewable project developer needs to get financing to build new green power projects. In PPA, Google is agreeing to buy all the power from a project for many years. Google has, in effect, totally accepted the power price risk that the project owner would otherwise face-instead of taking the risk of selling into the power market on a short-term basis, Google is providing the seller with a guaranteed revenue stream for 20 years. This is something the developer can literally take to the bank. If we were to buy only the RECs, this would represent a fraction of the value of a typical power project, and would still leave the renewable developer to face the market risks of future energy prices, making it much harder for them to obtain financing for projects.”

Facebook in Ireland

Facebook-another often-cited owner/operator of hyperscale data centers-recently announced some renewable-energy initiatives associated with its under-construction facility in Clonee, County Meath, Ireland. In January, Facebook’s vice president of infrastructure Tom Furlong said the Clonee data center “will be packed full of cutting-edge technology, making it one of the most advanced, efficient and sustainable data centers in the world. All the racks, servers and other components have been designed and built from scratch as part of the Open Compute Project … Our data center in Clonee will be powered by 100-percent renewable energy, thanks to Ireland’s robust wind resources. This will help us reach our goal of powering 50 percent of our infrastructure with clean and renewable energy by the end of 2018.”

In April, Brookfield Renewable Partners announced a long-term supply agreement with Facebook in Ireland. Brookfield said it “will supply 100 percent renewable wind energy to Facebook’s second European data center under construction in Clonee, County Meath, Ireland and to Facebook’s international headquarters in Dublin.

“The supply contract, which will be for a period of at least 10 years, will see Brookfield Renewable supply electricity approximately equal to the long-term average annual generation of approximately 150 MW of wind capacity. Brookfield has an additional greenfield wind development portfolio of over 200 MW across Ireland with 75 staff based in Cork.”

In his blog post from May, Microsoft’s Smith comments bluntly, “There is no room for complacency. The largest tech companies today may each consume as much electrical power as a small American state. There may come a point in just a few decades when we each may consume as much power as a mid-sized nation. This creates an obvious responsibility that we need to take seriously.”

Patrick McLaughlin is our chief editor.

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