‘The global data revolution will be renewable-powered’

Article in RECHARGE 30 June 2017

OPINION | As demand for online services soars, the engine rooms of the data industry are putting renewables at the heart of their strategy, writes Tom Lindberg

The IT sector alone uses approximately 7% of all global electricity, and with new options for streaming to our devices appearing almost daily, that demand is only going to rise. By 2020, with population growth and improved internet access, online traffic is expected to triple.

That makes powering data centres with renewable energy necessary and good for business.

It can provide long-term price security, bring more renewable energy to the grid and build brand identity. A number of major technology companies – such as Google, Microsoft, Facebook and Amazon – are setting themselves green energy goals by promising to power their cloud platforms with renewable energy. While their objectives are similar, their methods vary widely.

One size does not fit all. Large technology companies are often in a position to take a long-term industrial approach with the necessary capital and resources to provide new, off-site renewable energy production units. Smaller companies are also making an effort to improve their environmental impact, by for example installing solar power generation on their roofs. Other companies that value long-term price certainty opt for Power Purchasing Agreements (PPAs) from renewable power plants.

For various reasons, many companies will still opt for sourcing their power from the local power grids. This should not however, stop them from using renewable energy. Guarantees of Origin (GOs), Renewable Energy Certificates (RECs) and International RECS (I-RECs) enable data centres of any size to purchase renewable energy from the grid, to track their consumption, and to document that the energy comes from a certified, renewable source.

This sends a very clear signal to the market that the data centre is committed to using renewable energy andwhen these commitments accumulate, it sends a clear indication of the industry’s preferred source of energy.

The solution is offered in a wide range of locations, allowing for easy, stress-free documentation no matter where a company’s data centre is located. GOs are used in Europe, RECs in North America and I-RECs in a growing number of countries in Asia, Latin America, Africa, and the Gulf region. The solution is flexible, allowing for quick adjustment if a company’s energy demands go up or down, or if their data centre has to relocate.

Data centres in Europe can be powered on renewable energy from another country if the technology companies view Europe as one regional market. Data centres can set up their operations in one country, purchase renewable energy for its operations from the grid and document it with Guarantees of Origin from another country. This is particularly interesting if the data centre wishes for a specific renewable power plant that meets stricter environmental standards or run on a named technology. Experts can help data centres find the best solutions and manage a portfolio transferred across national boundaries according to best practice.

Europe is gradually moving away from renewable power plants subsidised by feed-in tariffs and towards auction-based support. Data centres still have new, alternative ways to get engaged. They can opt for Certificate Purchase Agreements (CPAs) – purchasing GOs for a fixed price over typically five-15 years, from a planned renewable energy project, contributing directly to the funding of the project.

Data centres may also choose solutions like GO². These are simple and quick to implement, enabling companies to top-finance new renewable energy projects, and within one year ensure that a new power plant is built.

Where should technology companies start? Data centres should get support from experts that can help find the best solutions for their operations in Europe. Integrating targets and ambitions across the entire organisation; and ensuring that communications, sustainability and the relevant procurement teams work together will help define the processes to achieve the targets.

Once a long-term strategy is decided, experts can help manage cross-country portfolios of GOs, GO² or any of the various solutions available.

The internet is by far one of humanity’s most influential inventions. With the internet industry committing to use 100% renewable energy, it can also have a lasting and positive impact on our future climate.

Tom Lindberg is managing director of ECOHZ, a corporate energy consultancy based in Oslo, Norway