- President Biden has set an ambitious goal: reduce U.S. greenhouse gas emissions to 50% below 2005 levels by 2030.
- If CEOs are not equally ambitious in their approach to running their companies then Biden’s objective is in jeopardy and such an outcome invites invasive government regulation.
Every CEO I know is seeking impactful ways to save energy and reduce carbon emissions. But one part of the search that gets short shrift is data centers. Just as data centers are key to the functioning of any modern company, they can play an outsize role in helping companies reduce carbon emissions.
Data centers are large, non-descript buildings that house the cloud. All the bits and bytes that underpin innovations in autonomous driving, Artificial Intelligence, robotics, 5G, e-commerce, the Internet of Things – all these powerful new technologies reside and are analyzed in thousands of specialized data centers around the globe. And as the number of data centers grows, so too does their power consumption. Gobbling up nearly 3% of the world’s annual power usage, data centers’ power consumption today exceeds that of the global airline industry. But that usage need not lead to run-away carbon emissions.
My firm, DigiPlex – the largest data center company across Scandinavia – is at the forefront of harnessing renewable energy to power data centers. A recent study we commissioned found that carbon emissions from hydro-powered data centers is only around 3.5% of the carbon emissions of traditional fossil-fueled data centers in Germany. By utilizing hydroelectric power instead of fossil fuel over the last decade, DigiPlex alone has prevented nearly 1,000 tons of carbon emissions. That’s equal to what a gas fueled car would emit driving 4,800 trips to the moon and back.
And if the carbon savings aren’t enough to convince management to “go green” then the dollar savings certainly should. DigiPlex’s use of hydroelectric power saves our customers hundreds of millions of dollars. When the cost of power represents up to 60% of the typical data center’s operating costs, paying one-fifth the cost for power saves a lot of money.
That same DigiPlex study showed that the savings of one modest-sized, hydro-powered data center contract over its 10-year term is nearly $200 million. Meanwhile, several of the largest data center users (e.g. Amazon, Microsoft and Google) are constructing up to 100 megawatts of data centers in each of three Nordic countries. Across their expected 20-year life, those data centers, which will use Nordic hydro power, will save many billions of dollars compared with data centers that use fossil fuels. Savings of that magnitude attract a lot of attention, mostly from way up the corporate ladder. In other words, going green is big business.
Meanwhile, the majority of corporate and especially government data centers use older designs, often no longer fit for purpose and remain very significant carbon polluters. To really move the needle on responding to climate impact, business leaders must encourage the shift to newer, cleaner and more efficient data centers as quickly as possible. One easy method: change government policy to permit much faster capital investment depreciation of those dirty centers (e.g. over a five-year period). That would have an immediate, material impact.
President Biden’s carbon reduction targets are bold and will require a range of approaches and methods to come anywhere close to achieving them. Corporate leaders are perfectly positioned to be a part of the solution; substantial carbon savings through strategic action on data centers must be at the top of the C-suite to-do list.
The old saw of “protecting the environment while benefitting shareholders” may cause some eyes to roll, but it is palpably true when it comes to advocating for, seeking out and building data centers powered by renewable energy.
Written by J. Byrne Murphy.
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