Last fall EMI, under subcontract to Summit Blue Consulting (now a part of Navigant Consulting), performed a process evaluation for Silicon Valley Power (SVP) in Santa Clara California. The process evaluation focused on identifying barriers to colocation data centers (or “colos”) participating in SVP’s energy efficiency programs. Colos provide data center infrastructure to support other companies’ IT equipment – basically data center space for rent. This space can be leased in units as small as half a rack and as big as thousands of square feet. The latter situation, where whole rooms or even whole data centers are leased to one tenant, are known as “wholesale” colocation facilities.
Santa Clara has a dense concentration of data centers and colocation facilities. This is largely due to their location in the heart of Silicon Valley, but also is due to their relatively low cost of power and high reliability of their power delivery. As a result of this high concentration, data centers are a main focus of the SVP energy efficiency programs, and in 2007-2008, roughly 60% of SVP’s energy savings came from data center related projects.
EMI conducted this research by performing: online research and a document review of appropriate reports, and in-depth interviews with colo managers from inside and outside SVP’s service territory and other industry experts. Here are some of the main take-aways from EMI’s research into participation of colocation facilities in SVP’s programs.
- Aggravated Barriers – Since providing reliable data center space is a colo’s main business, some of the barriers to energy efficiency for typical data centers are aggravated in the colocation facilities’ case. These include an extreme focus on reliability, with little interest in energy efficiency. It also creates an extreme case of the split incentive, because the people paying the power bill and the IT purchasers work for completely different companies, so there is little motivation to invest in more efficient equipment.
- Pricing Models of Colos Affect Investment in Efficiency– Different colocation companies have different methods for splitting up charges for power, cooling and space. While data centers become more constrained by power and cooling (and less constrained by space), some colocation facilities are moving away from space-based charges and more towards charging directly for power and cooling, which helps create more of an incentive for their customers to save energy.
- Difficulty in Reaching the Colocation Facilities’ Customers –SVP, like other utilities, is restricted to only offer incentives to their customers of record. This is necessary as it allows SVP to be able to recoup the incentive amounts if the measure does not stay in place for the contracted five-year period, and therefore the measure does not deliver the full five years of savings SVP claims for the measure. As a result, SVP cannot give incentives to the colocation facilities’ customers, as these customers do not pay SVP for their power, but instead the cost of power is bundled with their colo charges. This is a major barrier for many utilities to getting colocation customers to participate in virtualization incentives, for example.
- Lack of Expertise for Completing Calculations – Some facilities indicated that they did not have the engineering expertise on staff to complete the necessary calculations to receive incentives, as operating colos are basically “a couple IT guys with a sales department.” SVP offers support to fill out the applications, but some potential participants were not aware of this, so this was an area where better communication of the program offerings could help increase participation from companies that need this support.
All in all, the evaluation found that SVP’s focus on data centers has been very successful and that they are undertaking a lot of efforts to help overcome these barriers such as: emphasizing new construction where the barriers and inertia to energy efficiency are not as great, and offering technical support where it is needed. Other opportunities lie in collaborating with other utilities to identify new opportunities (e.g., for prescriptive measures which simplify the application process), and investigating new ways to get to colo customers. Although there are many barriers in place for colocation facilities, this is a large data center market, it is growing rapidly, and it is worth having progressive utilities like SVP continue to push to develop programs and processes to overcome these barriers.
The full report (available here) offers more detail on the colocation market and barriers to their participation in energy efficiency programs.
Tags: Challenges, Colocation, Data Center, EMI, Energy Efficiency, Energy Market Innovations, Incentive Programs, Opportunities, prescriptive programs
