Datacenters have been in headlines around the world for their rapid growth and for the amount of energy they require. There are concerns about their impact on the environment around things such as energy and water use – with some local governments even having suspended datacenter builds. In some cases, however, datacenters may actually help improve the sustainability of IT, and their needs may help boost demand (and returns) for renewable energy projects. Datacenter participation in green markets and electricity decarbonization worldwide will be vital, but close attention will need to be paid to each market in which they operate to maximize their impact and avoid the pitfalls of greenwashing.
S&P Global Market Intelligence hosted a webinar on October 28, 2021 entitled “Datacenters: Energy Hogs or Sustainability Helpers?” to look at these important issues in more detail. Karishma Bhimani, the company’s Product Manager for Commodities, served as moderator. She was joined by her colleagues: Steve Piper, Research Director specializing in energy, and Dan Thompson, Research Directors specializing in datacenters at 451 Research, the company’s technology arm. This blog summarizes the Q&A session that took place at the end of the webinar to address a number of questions posed by attendees.
Q: Are bitcoin miner and blockchain dedicated datacenters included in your grouping of datacenters?
Dan Thompson: A lot of bitcoin mining happens in places that we would not consider datacenters. It’s not uncommon for this to happen at a person’s home, or for someone to rent an empty building to tap into a good amount of power. There may be some bitcoin, cryptocurrency, or blockchain mining in there, but that’s really a different area.
Q: With datacenter energy use, are you referring specifically to electricity consumption or more the total energy use of fuels and things like that?
Dan Thompson: This is energy use, so that doesn’t account for diesel generation or any sort of on-site solar. This is the draw of the datacenter for the IT load and then the supporting power that's required for that. We've looked at how much power has been built out across the country, and then we've taken our utilization rates and applied that and then multiplied it by the power usage effectiveness (PUE). So, we get a very solid look at what's built out and what's actually being used here in the U.S.
Q: When you look at datacenters as energy hogs, do you take into consideration that we are driving this through our needs and wants for things like online banking, social media, and online streaming?
Dan Thompson: When we speak about the energy consumption of the datacenter industry, it's really hard to get to the “GDP output”. Traditionally, one would look at the contracts for companies like Microsoft and Amazon, the use of datacenters, and how much this activity contributes to GDP. From a Microsoft perspective, for example, it's everything from Word applications to e-mails filed for their SharePoint product and more. What we've tried to do with these estimates is capture all datacenters – everything from server closets and on-site small server rooms. And then, almost every action that you take should be encapsulated in these estimates, whether it's saving a file to the corporate servers, sending and receiving e-mail, purchasing a jacket because it’s going to rain, or streaming a show on Netflix. These contributions to GDP are large numbers.
Steve Piper: I was intrigued by the comment that it's really all of us and our usage of services that drive the usage and, therefore, the data hog versus sustainability question. I think that’s what really motivates tech companies to pursue green energy. This is a pitch to the market, to the end users who ultimately want to feel good and sustainable about their Internet and cloud usage. In many ways, it’s a market-led phenomenon and there is a push and pull happening. On one hand, we all consume datacenter services and the tech companies are responding by saying it can be green.
Q: How much energy do you think is saved by the datacenters versus alternative activities, such as snail mail, fewer trips to the stores, and less energy for stores?
Steve Piper: I think there's a lot of research that needs to be done on the correlated benefits of cloud usage. For example, does having a GPS optimize driving and save energy, or does streaming reduce trips to the movie theaters. What are some of the benefits that datacenter services ultimately provide? I don't think a comprehensive survey of that has been done.
Dan Thompson: I keep bringing a GDP context to this − how much GDP are these facilities generating? It’s a tough question.
Q: What are some of the energy-efficient technologies that can be used in the design phase of a datacenter before it can be built?
Dan Thompson: There are a lot of things to consider. There's an outfit in Oregon that's associated with a major university there that has designed a datacenter that’s shaped like a dome to "breathe." So, there exist very radical concepts in the design of a building, such that it almost cools itself using thermal dynamics and things of that nature. From a more traditional perspective, we are seeing equipment manufacturers on this journey, which is great. They're all working to develop more efficient cooling units and seeing how to do backup power generation without using diesel. From a practical perspective, there needs to be a hybrid approach to address the problem, and all must be sustainable from a business perspective. So, a dome-shaped datacenter might be great in a place where there is plenty of land, but not in a downtown area. That said, from a design perspective, could we get away with a modularized or precast datacenter such that we're not causing large emissions on the construction side? It's not uncommon for these buildings to have been around for 20 years, so think how much the technology has changed. Let’s go ahead and be on that cutting edge with building ideas.
Steve Piper: I would add that the global construction trade has estimated that embodied carbon amounts to something like 10% to 12% of global emissions for building construction in general. That's something that I think tech companies are taking on. Can we start to bring in advanced materials design that actually take up CO2 emissions once they're built, and other approaches that can reduce that embodied carbon footprint.
Q: What are your views on potentially developing datacenters in old underground mines? For example, perhaps salt mines because datacenters could benefit from the naturally cooler temperatures.
Dan Thompson: It's an interesting question, and we have a number of datacenters that are actually in mines in the Midwest. The challenge that I have seen from these designs is getting the heat out, since it’s essentially a cave and you need to evacuate the heat somehow. Some use the airshafts from the original mines or old elevator shafts. It’s a challenge, however, since it’s important to get a massive amount of electricity down there and a massive amount of heat out. You also need to think about dampness, because servers don't do well with water. While there are some security benefits, since it’s underground and seemingly safe, I would just suggest that, at scale, it gets to be a design problem.
Q: What are your thoughts on the role of current energy storage in meeting energy demand for datacenters?
Steve Piper: As illustrated by the Google AES deal, having a portfolio manager come up with an approach that provides energy at something like a 100% load factor has to include some component of renewable energy storage. And the lithium-ion battery technology has the scale and the market momentum today, thanks to the expansion of the electric vehicle market. But for a 100% load like a datacenter, it's hard to have enough lithium-ion batteries. So you want to see diversification of that technology space, longer duration resources, and resources that can be paired locally to provide a leveling of renewable energy loads. And I think that's something that datacenter markets, in particular, could really start to drive.
Dan Thompson: I can take it to an even more elemental level. An “aha moment” for me was when I recognized that the wind doesn't always blow and the sun doesn't always shine, so it needs something to cover that area, which is why storage needs to be a part of it. You can't over-generate and then not store it somehow.
Part of the datacenter industry’s reliability story is to have a system that involves a ton of batteries. Their facilities are designed to run on batteries, typically for about 15 minutes to full load. That 15 minutes gives them the opportunity to spin up the generators, get synced, ensure there are no issues, and then run off generators. The batteries get turned off and recharged.
The datacenter industry is used to operating with large-scale storage, but what we're talking about now is an even bigger scale. The datacenter is pretty well suited to understanding storage and the maintenance and monitoring of it all. When we're talking about gigawatt scale capacity, this is even far and above what the datacenter industry is used to handling. There are some technical challenges that need to be overcome, and they’re interesting challenges, but definitely something that this industry is going to have to be thinking of and solving pretty quickly.