The internet lives inside a nondescript big-box building on the outskirts of Council Bluffs, Iowa. Only a set of primary-colored stripes gives a clue that it houses a Google data center.
The building is full of computers, mounted on racks in row after row, busy serving up cat videos, web searches, email and countless other digital packets.
The building uses massive amounts of electricity -- enough to power a city of 30,000 homes. Power use is so critical to data centers that their size is measured by watts of electricity, not by megabytes or square feet.
When Google started to develop the data center, Iowa was largely coal-powered, making the data center’s carbon footprint much bigger than the company wanted it to be. Google calculated the regional carbon intensity at 0.739 kilograms of CO2 per kilowatt-hour, making its annual footprint about 260,000 metric tons of CO2 -- far out of line with the company's corporate sustainability goals.
An increasing number of IT companies are finding themselves in the same situation.
Cloud computing, where applications and files are stored on remote servers instead of on your local computer, is getting bigger. Greenpeace calculates that the cloud used an estimated 684 billion kilowatt-hours in 2011, enough to rank it sixth among countries. That number will increase 63 percent by 2020. Internet data growth is expected to triple between 2012 and 2017, driven by a 50 percent increase in users and increasing traffic for streaming video and audio.
At the same time, many IT companies have big sustainability goals. They are seeking to increase energy efficiency at their data centers, increase transparency in public communications and buy more renewable energy. Apple, Box, Facebook, Google, Rackspace and Salesforce have all committed to 100-percent-renewable-energy goals.
“Focusing on energy is a relatively easy thing for companies to do to increase sustainability,” said Gary Cook, an IT analyst for Greenpeace. “Renewable energy is increasingly affordable, sometimes even cheaper than conventional power. It’s much more difficult to influence their supply chain, like Wal-Mart has been doing.”
Google took extraordinary measures to make it work, getting licensed as a power wholesaler so it could directly buy power from Midwest wind farms. For its Council Bluffs center, the company buys power from a NextEra wind farm near Ames, Iowa.
Google then sells the power back to the local utility and retires the renewable energy certificates (RECs). “This may result in a slight net loss for Google,” the company points out, “but we expect the contract to eventually make money as power becomes more expensive over time.”
To make everything transparent and provide leadership in the IT world, Google wrote up the idea and process in a white paper it posted online.
Google now has a team of 30 working on renewable energy procurement and investment, but few other companies have the ability to go to such lengths.
The IT companies, as well as many other corporations with sustainability goals like Walmart, Walgreens and REI, have encountered a tangle of challenges in buying renewable power, especially in states with regulated utilities. The easiest workaround has been to buy RECs that have been separated or “unbundled” from the underlying power.
But RECs are falling out of favor, since they lack two critical features that many buyers want. First, they may come from power plants that might have been built anyway; in the jargon of carbon-tracking, they lack “additionality.”
Second, the customer still buys local “brown” power, and the RECs are an expense on top of that. They don’t give the customer the fixed-price guarantee that a wind or solar generator can deliver.
As a result, companies are looking for new ways to buy renewables. In addition to Google’s wholesale PPA approach, buyers are using special green tariffs, signing “contracts for differences” to get a financial hedge and also doing onsite generation. A number of the companies are working with World Resources Institute, World Wildlife Fund and Business for Social Responsibility (BSR) to explore new approaches.
To help with the process, Rocky Mountain Institute is getting ready to launch a Business Renewables Resource Center. The center will act like a travel agent, guiding corporate buyers through the arduous process of buying renewables.
One novel approach may be available soon. To make it possible to both meet corporate climate goals and site a new data center in Utah -- which has a power system dominated by coal -- eBay helped push legislation there that allows direct sales of renewables in a state that is otherwise fully regulated.
The Utah Public Service Commission is now going through a rulemaking process and encountering resistance from regulators and Rocky Mountain Power worried about cost shifting. “Rocky Mountain Power’s tariff proposal is completely unworkable,” said Sarah Wright, director of Utah Clean Energy.
The legislation opens the door to other customers beyond the IT sector. Powdr Corp., which owns eight ski resorts, and Wal-Mart, with 54 stores in Utah, are both intervening in the docket.
Brent Giles of Powdr Corp. wrote in a filing about the proposed legislation, “[We] hoped SB12 would help us to develop a fair and simple method to enable us to continue to make investments for more clean energy in Utah.”
But proponents of the direct sales law say a raft of proposed fees from Rocky Mountain Power are intended to thwart the process. Wal-Mart calculated that it “would spend $291,600 a year just for costs from the administrative fee,” not to mention the various other fees.
However, David Eskelsen, a spokesman for Rocky Mountain Power defended the proposed fees, saying that commission staff "reviewed and verified the company’s calculations for the billing and metering charges, and for the delivery and backup service charges."
Cheryl Murray, an analyst at the Utah Office of Consumer Services, wrote in a filing that cost shifting was a potential problem: “The Office is concerned that some parties may be seeking lower costs rather than more accurate costs. While we understand this desire, lower costs for Schedule 32 customers must not come at the expense of other customers.”
On the contrary, Iowa rolled out the red carpet to attract Facebook. MidAmerican Energy worked with Facebook to ensure that the company's new Iowa data center, now under development, would be entirely powered by local wind. The project is part of the biggest purchase of wind turbines in history -- a $1.9 billion, 1,050-megawatt order was placed last year with Siemens.
Apple and Microsoft have also executed big renewables deals. Apple’s North Carolina operations are powered by a mix of ground-mounted solar -- 40 megawatts currently, set to increase to about 60 megawatts -- and fuel cells that run on biogas. It has also announced that iPhone 6 screens are being made in a solar-powered factory.
Microsoft says it hit the 100-percent-renewable mark last year, buying power from wind farms in Texas and Illinois, hydro plants in Washington and biogas in Wyoming (though much of the total comes from buying RECs). It has also worked with the University of California, Irvine to integrate fuel cells into a data center, mounted on racks alongside the servers. “We were able to boost the electrical efficiency of our fuel cell system from 39.8 percent to 53.3 percent by cutting out much of the electrical conditioning systems,” Microsoft reported in February.
Notably missing so far are Amazon and Twitter, as well as “server hotel” companies like Equinix and Digital Realty. Amazon Web Services is the largest data center company, delivering for dozens of clients, including Yelp, Vimeo, Spotify and Netflix. By one measure, Netflix accounts for 34 percent of web traffic during peak times in North America.
Amazon recently hired its first director of sustainability. The efforts it will undertake in the sustainability space remain unknown, however, since Amazon is famously tight-lipped about corporate operations and plans. Twitter, meanwhile, received an "F" from Greenpeace for its sustainability goals, achievements and disclosure practices.