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 30th 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!

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