In investor reports and promotional efforts, utilities are increasingly touting their services to a lucrative growing customer base: cloud computing and data centers.
"From Loudoun County in Northern Virginia to Mecklenburg County in Southside Virginia and stops in between," Dominion Resources Inc. says on its website, "data centers are expanding or building across our service area."
And Duke Energy Corp.'s brand-new CEO, Lynn Good, said in a recent interview with Charlotte, N.C.'s WFAE-FM, "To have an opportunity to bring industry to the state that uses electricity 24/7 is actually a benefit to residential and commercial customers."
There is no disagreement that data centers are a significant factor in helping increase the demand for energy. But there is a strong debate over whether fossil fuels will benefit from that demand.
And a new report by energy analyst Mark Mills, CEO of the Digital Power Group and a board member of the conservative Marshall Institute, suggests that information communications technologies, including data centers, will help either sustain or boost the world's coal use.
The report is titled "The Cloud Begins With Coal" and is a follow-up to another Mills piece called "The Internet Begins With Coal" from 1999. It has already lit up the blogosphere with responses for and against his views.
"Electricity fuels the infrastructure of the world's ICT ecosystem -- the Internet, Big Data and the Cloud," wrote Mills in a report making the rounds through several media outlets. "Coal is the world's largest single current and future source of electricity."
For his 45-page report, sponsored by the National Mining Association and the American Coalition for Clean Coal Electricity, Mills relied on estimates vouching for the continued importance of coal as a global energy source. As such, he says, the fuel is bound to benefit from power-guzzling data centers.
"The average square foot of a data center uses 100 to 200 times more electricity than does a square foot of a modern office building," Mills writes, also noting that the variety of technologies he classified under the "ICT ecosystem" are close to eating up 10 percent of the world's power generation.
While companies have worked to become more efficient with their power, Mills' research shows that technology is advancing and growing faster than efficiency. "Historically," he writes, "demand for bits has grown faster than the energy efficiency of using them."
Stuart Neumann, advisory services director for Verdantix, a London-based energy and sustainability consulting firm, doesn't dispute that data centers use plenty of energy.
However, he noted in an interview that technological innovation, including the ability to store large amounts of data in one facility, as opposed to a proliferating number of smaller networks, can also lead to energy savings, as was confirmed earlier this year by researchers at Lawrence Berkeley National Laboratory and Northwestern University (ClimateWire, June 12).
"Cloud computing is clearly gaining a lot of momentum, and that will inevitably require increased demand for power to actually run it," said Neumann.
He added, "You need to look wider than just cloud computing. Firms are increasingly using energy management software to get a better handle of their energy consumption. That data is then used to identify energy efficiency projects."
'How Green Is the Internet?'
In June, Google Inc. hosted a daylong summit at its Mountain View, Calif., headquarters to discuss the benefits and challenges the Internet poses in relation to energy use and climate change. Speakers included company Chairman Eric Schmidt and former Vice President Al Gore.
"The data centers in the U.S. and globally now are responsible for approximately 2 percent of the global warming pollution that is sent up there," Gore said at the event, titled "How Green Is the Internet?"
"Getting completely on renewable energy is one of the solutions," he added. "But efficiency in the use of the energy that is now being employed, it is absolutely the single most effective way to solve this problem."
For Greenpeace, a group that has been lobbying companies to make their data centers greener, efficiency alone doesn't cut it. It has been pressuring companies to cut their ties to fossil fuels and nuclear.
"We have seen a lot of change. We now actually have five major cloud brands to be committed to be powered with 100 percent renewable," said Gary Cook, a Greenpeace technology analyst.
Converts to the group's way of thinking include Google, Facebook Inc., Apple Inc., Rackspace Inc. and Salesforce.com Inc. Gore, who sits on Apple's board, said the company has transitioned to 100 percent renewable energy for servers and at its headquarters.
Cook said, "I think you'll see the sector really driving clean energy, not only for themselves" but also for other customers on the grid, helping with the goal of moving the world away from fossil fuels.
In a thinly veiled jab at fossil fuel interests, Gore said "legacy wealthy and powerful industries that have accumulated wealth and power during a previous economic era" are blocking climate change efforts. "American democracy has been hacked; it no longer operates in the public interest."
On its website, Dominion says, "Our fuel mix includes a balance between nuclear and coal with a growing amount of natural gas. We also are adding more renewable energy sources to continue on our trek to meet Virginia's renewable energy goal of 15 percent by 2025."
Dominion boasts a 2011 production distribution with 42 percent nuclear, 38 percent coal, 17 percent natural gas and 2 percent renewables.
But for groups like Greenpeace -- which has produced a report called "How Dirty Is Your Data?" -- Dominion's coal, gas and nuclear holdings make it a target for opposition (ClimateWire, Aug. 10, 2011).
Mills, however, says thinking about making the Internet green is beside the point. In his research and associated op-eds, he suggests that cost would determine how companies get their power. He compares Google's summit to "corporate green-washing efforts."
Mills cited a DataCenter Dynamics survey that says cost and power availability are top factors for data storage centers. And while some centers can locate in geothermal-rich Iceland, he said, some companies also weigh geography as a factor for network speed.
"For many data centers today, the cost of buying computer servers is now less than the cumulative cost of buying electricity to run those servers over their four-year life," he writes. "As computing hardware costs continue a long-term decline, the share of spending and importance of energy costs increases."
Mills' report says that "the owners of a $1.6 billion, 200 MW one million-square-foot data center under construction in Chongqing, China, advertises their cheap power -- from China's 80 percent coal-fired electric grid -- not cheap labor, as their competitive advantage in pursuing global Cloud services."
He offers another example: "[A] single 50 MW enterprise data center sited in Iowa -- 70 percent coal, 25 percent wind -- instead of higher cost California -- no coal -- saves $350 million in electricity expenses over the life of that single data center."
Greenpeace's Cook concedes that the group has other companies to convince that have large data centers, like Amazon Web Services, which has significant operations in Virginia. For him, switching to renewables makes not only social but also economic sense, and price stability is a factor.
"They're not doing it just for brand management," he said. "They make the strong case that this is really good for their cost structure."
Neumann said companies may pay "something of a premium" to get renewables. But he said many companies wonder, "What is the long-term risk for your business from connecting to power that is not low-carbon? Will there be purchasing decision by your customers that use your cloud computing services?"
Like utilities, tech companies are worried about regulations on carbon and their impact on fossil fuel energy sources. And with their global footprint, they must often contend with more stringent regimes.
Neumann added the question, "Is it more likely to have additional taxes placed on it, and what will that mean to your business?"
Mills' report crunches data to predict a world with more high-tech equipment, data centers, communications networks and household devices with computing capabilities. All of them will need cheap, reliable energy.
And he writes that "none of the factors that gave rise to today's digital economy were anchored in, or were motivated by either saving energy or carbon."
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