Energy Efficiency Programs and Evaluation in Europe (And more importantly, an excuse to talk about the World Cup)

I am finally returning after a long hiatus from blogging, and from two weeks in Europe after speaking at the International Energy Program Evaluation Conference (IEPEC).  My talk was on EMI’s work evaluating data center efficiency programs for US utilities. EMI was also a silver sponsor for the event, which was IEPEC’s first conference outside the U.S.. The conference included numerous interesting sessions on methods and challenges in evaluating energy efficiency programs in the U.S., Europe, Australia and China, making it a truly international conference.

The U.S. vs. the Rest of the World

There was an interesting undercurrent at the conference stemming from differences in the way energy efficiency programs are run internationally. In the U.S. evaluation programs tend to focus on utility run programs, which are typically accountable to the goals put on them from state utility commissions. At the federal level, energy efficiency programs in the U.S. do not have the same level of accountability – there are efforts to accurately determine savings but there is not the same focus on independent evaluation to confirm savings.

In the rest of the world, especially in Europe, it seems that programs and evaluation are mostly on the national government level and do not have the same level of accountability that U.S. utilities are subject to by regulators. One of the most interesting sessions at IEPEC was a panel discussion with Paolo Bertoldi of the European Commission and Dian Grueneich, the Lead Commissioner for Energy Efficiency of the California Public Utilities Commission.  The debate revolved around the need for energy savings goals and accountability through evaluation.  Paolo of the EC contended that program goals were unnecessary, that you can create programs that can help people save energy, and then drive them to save energy through other efforts like carbon taxation.  With this approach, and with no goals to meet, there is less need for independent evaluation to determine the impacts of a program.  Commissioner Grueneich, on the other hand, was arguing more for goals and accountability for the money spent on energy efficiency.

I can see Paolo’s argument, but the scientist and engineer in me wants to see real results.  You set up a program on the theory that it’s going to provide energy savings, but until you study it closely you do not know what the savings are actually achieved.  Furthermore, if you do not have good metrics to measure the impacts of the program, how do you know when a program needs improvement or how much it has improved when you make changes?  In practice, there is often a large gap between program theory, implementation and results; evaluators help define and reduce these differences for program designers.  Furthermore, solid process evaluation helps programs find ways to improve its processes, which in turn improve the program impacts.

I have a feeling this debate will continue, but IEPEC deserves credit for bringing this conversation to a truly international stage.  There seemed to be a lot of interest from European participants on learning more about the established evaluation techniques used for U.S. utilities and the development of international evaluation standards, and the success of energy efficiency programs can not but help to improve by the sharing of this information.

So, What Does This Have to Do with the World Cup?

The week after the conference I spent traveling in North East France with a short jump into Germany.  As an avid soccer fan, I spent much of this time sitting in cafes and restaurants watching the World Cup.  During the France v. Uruguay game the streets of Strasbourg were virtually barren and most everything was closed on a Friday night at 7:30 pm.  It seemed as if the French were busy watching quietly at home.  Across the border, in Freiburg Germany, every restaurant had what looked like a brand new TV outside the door so you could sit outside and watch the game, or casual passer-byers could watch the game (sales of flat screens must be through the roof in Germany).  They also had huge screens in some of the public parks for viewing.  After Germany beat Australia 4-0 in their first game, the bars and streets were absolutely mobbed with celebration.  Back in the U.S., things are less intense, but interest in the Cup, and the U.S. National Team seems to be at an all-time high after the U.S.’s great run through the group stage and emotional win on Wednesday.

So What’s the Point?

Theses experiences transposed on each other has driven home the fact that the world is increasingly becoming an international community.  There are large differences in mentalities, traditions and practices around the world, and engagement in the international community, whether through friendly competition or collaboration, helps us understand and learn from our international peers and see things from alternate viewpoints.  I like to feel that international engagement and sharing of information helps everyone involved, so thanks to IEPEC for a great conference, and to FIFA and ESPN for such a great event.

As a side note, IT technology and data centers are two of the tools helping the world participate in these global experiences.  The New York Times reports that ESPN.com’s traffic is up 70% over its traditional annual peak during the final four – another reminder of the explosive growth of internet usage and data center power consumption.  Ok, enough on that.  Spain / Portugal kicks off in an hour – should be a scorcher! Check it out on ESPN3.com.

Key Take-Aways of Colocation Research for Silicon Valley Power

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.

Utility Sponsored Incentives for Data Center Efficiency

One of the big barriers we see to energy efficiency in the data center market is a knowledge gap between utilities that are new to the data center market and data center operators who are not necessarily fluent in energy efficiency or in the language of utilities.  Last week I presented at AFCOM’s 30^th Data Center World Conference in Nashville, TN.  I was there to share the research we’ve done at EMI into what utilities out there are offering data center efficiency incentives and to try and help close this gap.

Part of the presentation was focused on trying to get the data center operators to understand the utility mindset – what motivates utilities and what makes sense for them to offer money for energy efficiency. This is one of my favorite slides, because it attempts to answer one of the questions I get the most from non utility/EE folks:

I love this question because it really gets to the heart of the economics of energy efficiency.  In the end, it often comes down to this singular point made here by Bruce Folsom, the director of energy efficiency programming at the utility Avista in Eastern Washington State, “Our energy future is about using the resources we have wisely, and energy efficiency remains our lowest-cost resource.”

To further this goal of reducing the knowledge gap between utilities and data center operators, I attempt to explain incentives as trying to influence you to implement a project, or to help motivate a transition of an idea into an action. This transition is illustrated here:

The presentation includes explanations of how utility incentives can reduce payback times for energy efficiency projects and increase the ROI of these projects.  In addition, I do a run down of incentives offered for data centers and examples of utilities offering these incentives.  One breakdown I explore is where different incentives are applied within the data center, as illustrated in this slide:

I finish with a list of steps for data center operators to engage with their utility to pursue these incentives:

1. Become familiar with the utility’s programs

• Check your utility’s web site for information on available programs and contact information
• Contact your utility or your account manager to discuss available programs/incentives

2. Identify projects

• Schedule an energy audit or technical assistance from utility (where available)
• Find projects relevant for incentives

3. Confirm Projects

• Fill out any applicable pre-application paperwork to confirm relevance and incentive amounts

4. Perform pre-inspection with utility (where applicable)

5. Install measure

6. Perform post-inspection (where applicable)

• Calculate savings and incentive amount

7. Apply for incentive or rebate

So that’s my attempt to distill my hour long presentation into a blog post.  I was really pleased by the reaction at Data Center World, which speaks for the need for people to help plug these gaps in communication and knowledge.  I had a number of utilities in the room, a few consultants and some data center managers, and the question and answer period turned into more of a discussion between utility folks and managers.  That’s what I like to see.

I would definitely be interested in any feedback on what I’ve included here, or in any information readers have on available programs.  We’re attempting to fill out a matrix of available programs by utility so any information would be greatly appreciated.  Also if anyone is interested in the full presentation let me know.  You can always reach me at ajhoward (at) emi1.com

Based on the reaction I will be attempting to update the presentation and will resubmitting my abstract to hopefully speak at the next Data Center World Conference in Las Vegas in October.  Thanks!

Demand Response (DR) for Reduced Peak Power in Data Centers

One interesting approach to demand reduction is the idea or demand response, or “DR” programs.  The New York Times recently had this article on Idaho Power’s approach to DR.  The article includes this explanation of what DR is:

This concept, called demand response, has gained traction in utility circles. In essence, it involves paying users to make small sacrifices when there is an urgent need for extra power (the “peak”). The utility can then rely on cutting some demand on its system at crucial times — and, in theory, avoid the cost of building a new plant just to meet those peak needs.

There are many opportunities for demand response in data centers. EMI did a process evaluation for the California Emerging Technologies Program (ETP).  During this project, EMI prepared a number of case studies on different technologies assessed by the ETP. One such case study was on an “Auto-DR” technology.  My colleague who worked on this passed on this report on a joint effort between PG&E and LBNL’s Demand Response Research Center (DRRC) on an a similar Auto-DR pilot program in the summer of 2006. During the pilot program, they setup locally participating businesses to have automated controls to lower their energy consumption in response to demand response signals from PG&E. Of the 24 facilities that participated in the pilot, an office/data center had highest achieved demand reduction for a single event at 363 kW and highest average for 294 kW. In this instance the the DR strategies used at the data center site included: duct static pressure increase, Supply Air Temp (SAT) increase, fan VFD limit, chilled water (CHW) temp increase, and cooling valve limit. The chart below from the report shows how high the demand savings was for the office/data center (all the way on the left) compared to other sites.

The office data center also had the lowest payback period at 0.4 years for implementing the Auto-DR.

Following the project, the DRRC published this data sheet with information on the DR potential of data centers.  The sheet makes some interesting points including that “savings can be higher than those in other industries because reducing server loads simultaneously reduces cooling and other equipment loads.”

Here are some of the other methods the DRRC recommends in their fact sheet:

–      Dynamically shift load onto fewer servers using virtualization.

–      Migration of load to another location (i.e. another data center).

–      Temporarily raise set-point temperatures.

–      Use backup reserves such as ice storage or chilled-water storage for cooling.

PG&E is still running the Auto-DR program along with the other large California IOUs which also have programs.

Thoughts from PG&E’s Former Data Center Efficiency Program Manager

I’m getting caught up on some news from over the holidays (happy new year by the way!) and came across this two part interview with Mark Bramfitt, the former program manager for PG&E’s High Tech program which includes data center efficiency projects (found here: Part 1, Part 2).  Mark has been very vocal over the years in spreading information on PG&E’s ground breaking programs in this area and has been a great ambassador to the high tech and utility industries alike on data center utility incentives.

EMI performed the process evaluation of the PG&E’s High Tech Program (which can be found here) and I got to know Mark initially through his support for my work with the EPA on the ENERGY STAR Computer Server specifications.

Scouring through the two interviews I found a number of interesting points from Mark.

On Barriers to Program Adoption:

In my discussions with utilities across the U.S., this is probably the single biggest barrier to program adoption – they can’t find firms who can do the calculations, or resources to appropriately evaluate and review them.

What has slowed us down, I think, is that the IT industry and IT managers had essentially no experience with utility efficiency programs three years ago. It simply has taken us far longer than we anticipated to get the utility partnership message out there to the IT community.

These two quotes emphasize the fact that there’s a gap of knowledge (and talent) between the utility industry and the high tech companies that equip and run data centers.  On the utility front – there is a gap in knowledge about the IT industry.  The fast pace of technological innovation and quick growth in this industry presents challenges in finding or developing the expertise to implement effective programs (including performing the necessary calculations and analysis).  On the high tech company front – there is a gap in knowledge about how to identify and leverage these new programs and efficiently perform the analysis and calculations to receive the incentives.  My conversations with industry members on both sides highlight these frustrations, and the ultimate success of data center efficiency programs will hinge on closing these gaps in the coming years.

New Opportunities

On the retrofit side, we’re seeing interest in air flow management measures as the hot spot, perhaps because customers are getting the message that the returns are great, and it is an easy way to extend the life and capacity of existing facilities.

Metering and monitoring systems lead people to make simple changes, and can directly measure energy savings in support of utility incentive programs. We also like that some systems are moving beyond just measurement into control of facility and IT equipment, and to the extent that they can do so, we can provide incentive funding to support implementation.

There is a lot of room for potential growth from the basic programs currently offered by utilities.  Mark points out one of the areas of low hanging fruit is with air flow management.  This can include simple efforts like blanking panels or more advanced efforts like switching to hot/cold aisle containment.  The challenges here are in confirming the energy savings, which is where the expertise mentioned above is needed.

Metering and monitoring is always a hot topic of conversation in this industry.  Future and current efforts for quantifying energy efficiency gains rely on access to quality data, so the implementation of better measurement and monitoring would be a big a boost to future energy efficiency projects. The challenge, again is quantifying concrete savings from these measures.

These two points bring up what I see as a main challenge to the utility industry in simply and reliably quantifying the energy savings from these measures so they can use incentives to drive these right behaviors.  It’s a significant challenge and will take some creative thinking. Another of Mark’s points emphasizes the potential outcome of these challenges:

That being said, utilities in California are under tremendous pressure to deliver energy efficiency as cost effectively as possible, so some of the industry leadership activities undertaken by PG&E may have to be de-emphasized, and we may not be able to afford to develop new programs and services if they won’t deliver savings.

To get over this hurdle, the industry needs to think creatively on how to efficiently (i.e. cost effectively) justify incentives and programs that help drive the right behavior.  There’s a large potential for energy savings in this industry, and utilities should have a role in driving these behaviors, we just have to continue to push to find effective models for doing this.

Future Growth of the Industry

PG&E is not seeing the level of new data center construction that we had in ’07 and ’08, but the collocation community tells me demand is exceeding supply by 3-to-1. They just can’t get financing to build new facilities.

This last point emphasizes that despite the credit crunch, demand remains high.  Once some capital is freed up we should continue to see rapid growth of the industry and increased opportunities to effect change through intelligent incentives.

Welcome to the EMI Data Center Blog!

Thanks for visiting the new Energy Market Innovations (EMI) data center blog. Over the years EMI has worked with clients to increase the effectiveness of energy efficiency programs through strategic consulting and evaluation.  Since joining EMI in July, I’ve been excited by the prospect of using my expertise to apply this focus to the growing industry of data centers and information technology (IT) equipment.

Various estimates indicate that data centers are currently responsible for 1.5 to 3.0% of the total electricity use in the US, and that energy use from these facilities is projected to continue at double digit yearly growth rates for the foreseeable future. Regardless of which estimates you believe, it is apparent that the energy use of these facilities is significant and continues to grow with the increased demand for digital services. Over the last few years many experts have collected lists of best practices and many vendors have released more efficient equipment, but more work has to be done to ensure that these practices and technologies are embraced and adopted throughout the industry.

This blog intends to provide a resource for professionals interested in energy efficiency in the data center market, with a focus on how to continue to develop intelligent and effective initiatives for increasing the market penetration of best practices and efficient technologies. This blog will initially focus on utility sponsored initiatives and endeavors to create a bridge of information between the electrical utility and data center industries.  Through this blog, we’ll be keeping you up to date with current news and trends with up to date commentary on how current happenings are applicable to the world of utility sponsored data center energy efficiency initiatives.

Enjoy.  And, of course, being a blog focused on innovation in the digital economy, we’d be remiss to not take advantage of the latest social networking tools.  So please join us via RSS Feeds, Twitter and LinkedIn.