Green Data Centers & Critical Facilities: Aligning Costs, Performance, & Sustainability2013 in Review - Primarily Sourced from December 5th Roundtable

DISRUPTIVE TECHNOLOGY: FEATURED PANELISTS:

2 | Green Data Centers & Critical Facilities: Aligning Costs, Performance, & Sustainability

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Agrion reports differ from other research out there because the information comes directly from our most valuable resource: our network of informed experts and business leaders. As the industry voice and gatekeeper to our members’ strategies and insights, we like to step out of the way as much as we can so our network of over 200,000 leading professionals can do the talking.

Our team is charged with curating participants, data, and topics emerging from Agrion roundtables, virtual thought-leadership sessions, taskforce meetings, and summits to ensure that these sectors grow cohesively and our members thrive in a fast-paced, rapidly evolving field. By Agrion’s design, our member-driven approach to research, writing, and projects ensure that we do not overshadow the real industry buzz. We synthesize network contributions into a coherent and (we hope) useful narrative, add relevant external research, and voila – we have a product detailing the conditions of the market, pain points for professionals in energy, cleantech, and sustainability, and some pretty valuable hints about where these industries are headed.

Agrion effectively operates like the hybrid of an industry association and a research firm, our network of professionals driving our agenda and focus while providing a constant flow of content, challenges, and insights as they build lasting connections that foster business collaboration and industry growth. Agrion assembles our members across a variety of onsite and virtual mediums for thought-leadership, idea exchange, and the more than occasional cocktail hour. Out of our assemblies we produce industry intelligence, market analysis, and in some cases larger projects championed by our members.

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Best,

Nicholas J. DavisManaging Director - Agrion Americas

A N O T E F OR T H E R E A D E R :

4 | Green Data Centers & Critical Facilities: Aligning Costs, Performance, & Sustainability

What is AGRION?AGRION is the global business network for energy, cleantech,

and corporate sustainability. With offices in New York, San

Francisco, Paris, Brussels, and Beijing, and an international

community of more than 200,000 industry professionals,

AGRION provides a platform for members to connect, exchange

ideas, and identify business opportunities on a global scale. Each

office hosts weekly onsite and online conferences to facilitate

face-to-face networking and online collaboration with industry

leaders. Our global network enables AGRION members to

determine critical business drivers, explore innovation, and

realize sustainable growth in a world challenged by resource

constraints, climate change, and evolving political landscapes.

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Contents

A Note for the Reader

What is AGRION?

Meet the Panel

Industry Insights

References

Abous Us

02

03

06

08

20

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6 | Green Data Centers & Critical Facilities: Aligning Costs, Performance, & Sustainability

Bryant Farland

Meet the Panel:Green Data Centers & Critical Facilities: Aligning Costs, Performance, & Sustainability

SkanSka

Senior Vice President, Mission Critical COE leader

Bryant Farland is a Senior Vice President and Mission Critical COE Leader at Skanska, a multinational construction and development company based in Sweden. Skanska is one of the leading ‘green’ construction developers in the world, with a long history of focusing on the sustainability aspects of smart builds. Coming in as general counsel for Infrastructure and Development, Farland has recently assumed this position following the departure of co-panelist Jake Carnemark, now at Skanska technology partner Aligned Energy.

aligned energy

CEO

JakoB

Carnemark

Jakob Carnemark oversees the technology roadmap for Aligned Energy, a pioneering technology developer that creates ultra-efficient advanced solutions in the data center space and the parent company to Inertech, Energy Metrics, & Karbon Engineering. Carnemark has over 25 years of experience running mission-critical groups and building large data centers for telecommunications companies and banks.

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BlaCkroCk

Global Director of Critical Engineeringagrion

Managing Director, Agrion Americas

HerB traCy

niCHolaS

daviS

Herb Tracy is responsible for all of the mechanical, electrical, and plumbing systems in the entire Blackrock portfolio, which includes 100 offices in 70 cities in 30 countries as well as 11 data centers around the world. Fast-growing Blackrock is the largest publicly traded asset management company in the world, with $4.1 trillion under management and another $14 trillion of outsourced analytical solutions, all of which flows through their data centers.

Nicholas J. Davis is Managing Director of the Americas for Agrion, the global business network for energy, cleantech, and sustainability. Agrion mobilizes over 200,000 professionals for intellectual capital exchange, task forces, projects, and research initiatives across verticals such as solar, wind, infrastructure finance, smart grid, microgrids, energy storage, smart cities, and resiliency.

amelia

axtell

loCkHeed martin

Energy Advisor

At Lockheed Martin, Amelia Axtell helps facilitate two programs: the Con Edison commercial and industrial program, which gives incentives for building retrofits in Con Ed service territory, and Lockheed Martin’s joint data center program, which offers incentives targeted at data centers for measures that reduce the energy footprint of a data center build or a retrofit, along with 50-50 cost shares for tech assistance studies.

8 | Green Data Centers & Critical Facilities: Aligning Costs, Performance, & Sustainability

Herb Tracy from the world’s largest asset management group BlackRock, and Amelia Axtell from advanced technologies provider Lockheed Martin. Why is sustainability so critical for data centers, and vice versa? What are the key barriers impeding the industry’s progress today? What are the best opportunities out there for companies to green their data centers, and how can we drive their greater adoption throughout the market?

Introduction

Digital information lies at the foundation of our modern world, but many consumers neglect to consider the growing amounts of data they access and create every day from a sustainability perspective. Storing and processing data requires substantial stores of energy, materials, and water in a world where many of these resources are becoming increasingly stressed and costly to acquire, all of which makes data centers a profound sustainability risk for businesses today. As data production continues to spiral upwards with no end in sight, data centers must find ways to keep up - and for many, this means expansion and even greater demand for land, infrastructure, water, and power, inevitably yielding more waste and higher emissions. For financial institutions, telecoms, technology companies, and other organizations where IT is mission-critical, cost and resource sustainability in data centers is poised to become an ever-growing challenge.

Fortunately, great opportunities to improve efficiency and productivity exist in this space. Even today many data centers are extremely wasteful, consuming vast amounts of energy in inefficient, carbon-emitting ways; in the New York Times’ year-long investigation, some even wasted 90% of the electricity they drew from the grid.1 This presents a clear opportunity to achieve significant savings through the broad landscape of emerging technologies and best practices that are making strides in energy and resource efficiency today. To explore these solutions, we gathered a panel of leading industry experts in our Green Data Centers & Critical Facilities roundtable to share their key, on-the-ground insights and learnings: Jakob Carnemark from disruptive energy solutions provider Aligned Energy (parent company to Inertech & Energy Metrics), Bryant Farland from leading construction developer Skanska,

INDUSTRY INSIGHTS:

State of the Industry

Data production is growing at an unprecedented pace. Even as IT productivity continues to advance dramatically, an insatiable demand for social media, cloud and mobile computing, real-time processing, data analytics, and new features and applications continue to drive the growth of IT systems and their demand for power. Last year over 1.8 trillion gigabytes of digital information was created around the world, according to EMC and the International Data Corporation.1 With prevailing expectations for instant access to information and the increasing centrality of Big Data to an organization’s success, data centers that can meet this demand in the most reliable, secure, and efficient ways are now a business imperative.

The explosion in digital information is driving the expansion of existing data centers, the construction of new ones, and the search for ways to maximize the productivity of existing resources. In the Uptime Institute’s 2013 survey of a thousand data center operators, IT managers, and senior executives, 70% of respondents worldwide have built a new data center or retrofitted an existing one in the past five years, and 36% of data centers are receiving large (>10%) year-over-year budget increases.2 Development is especially strong in the emerging markets of Latin America and Asia, where 57%

and 44% of data centers are receiving large budget expansions, respectively. DCD Intelligence estimates that global investment in data centers grew 22.1% in 2011-12 from $85 to $105 billion, with Asia and Latin America leading the way.3

With 13,000 data centers in the world today - a number expected to double by 2016 - data centers consume approximately 1.2% of all electricity in the world and 2% in the U.S.4 Even as both IT and supporting data center infrastructure have continued to advance in efficiency and productivity with the evolution of technologies and best practices, the sheer demand for data means that data centers’ global power needs doubled from 2007 to 2012, and the average power consumption per rack rose 40%.5 Some forecasts estimate that data centers’ energy usage will comprise the fastest growing component of the ICT ecosystem in the next decade, approaching 1000 TWh worldwide.5 As their need for energy grows, so too will data centers’ carbon emissions and demand for materials and increasingly strained natural resources such as water, barring the ‘greening’ of the industry on a large scale.

Given that avoiding shutdowns has always been a data center’s primary imperative, much of the industry is notoriously risk-averse, wasteful, and slow to change. Hewing to the safe side may be only natural when the average outage costs data centers $7,900 per minute,6 but the market has made great progress in recent years. Newer data centers are substantially more sustainable than older generations and many cost-effective opportunities to retrofit existing sites are available today. One way to measure this is via PUE (Power Usage Effectiveness), the most widely-established metric for measuring how efficiently a data center uses energy. PUE is defined as the ratio of the total amount of energy used by a data center to the energy delivered to its IT equipment alone; the closer to 1.0 that PUE becomes, the more energy is devoted to the computer equipment rather than to other overhead such as cooling. While a PUE of approximately 2.0 is the most common estimate of

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the average data center today, the Uptime Institute’s annual survey of its network (large data center owners and operators) found a decrease in PUE from 2.5 in 2007 to 1.65 in 2013,2

and leading companies in this space are achieving even steeper PUE gains through cutting-edge technology.

The Uptime Institute suggests that many of these initial PUE improvements may have been achieved through simple fixes such as preventing bypass airflow (hot-cold aisle arrangement, blanking panels, sealing leakages, etc.) and more efficient UPS and power distribution systems.2 At the margin, advanced solutions providers like Aligned Energy are pushing industry standards forwards. It is these technological advancements that are improving at an extraordinary pace and allowing large, innovative companies to “radically outpace”2 the rest of the industry in adopting leading-edge efficiency best practices. For instance, Blackrock’s flagship Wenatchee data center has a PUE of 1.18 (Tracy), while the new data center developed by Skanska and Inertech for the Canadian telecom Telus yields a PUE of only 1.15 (Carnemark), one of the most impressive in the country.

This ultra-efficiency can drive dramatic cost savings. Entrusted with the $14 trillion worth of assets under Blackrock management, Blackrock’s Wenatchee data center achieves impressive savings by leveraging the region’s inexpensive power (2.5 cents/kW), an evaporative rather than mechanical cooling system for most of the year, and UPS systems that are highly-efficient modular components that can be upsized, downsized, or transported in 25 KW increments (Tracy). Skanska and Inertech’s 2.7 MW Telus data center is 80% more energy efficient7 than traditional sites due to measures such as their pioneering cooling distribution unit that enables free cooling for 98% of the year, virtualization, cloud computing, flywheel storage, and a modular design approach using prefabricated server modules designed for easy, just-in-time expansion.8 Moreover, while the Telus project is sited in Canada, Carnemark explains that the

technology is specifically designed to be temperature-agnostic so these PUEs can be achieved in places like Singapore or NYC.

One of the key learnings in our roundtable, however, is that these efficiency solutions are not an exclusive niche too expensive for all but the largest and most sophisticated companies. As panelist Jakob Carnemark of Inertech’s parent company Aligned Energy explains, the most sustainable solutions are also the best financial decisions for data centers. While branding benefits do exist, greening the data center is also vital for minimizing total costs, mitigating risks, and maximizing productivity - ultimately, optimizing an organization’s bottom line. Despite the higher upfront costs of these more sophisticated measures, paybacks can be very attractive – for example, Telus’s cooling system has a 3-year payback on energy savings alone. Minimal PUEs and reduced maintenance costs drive significant OPEX savings, and Skanska’s modular, “just in time” approach can greatly improve CAPEX and carrying costs8; the Telus data center not only reduced

(Above:9 Skanska and Inertech’s eOPTI-TRAX, a highly efficient water cooling distribution unit that is approximately ten times more efficient than traditional chiller plants, even at higher temperatures and lighter, denser loads. Deployed with Inertech’s Rack-Pax, e-Comb, and BeePax, this complete modular cooling solution uses one-tenth the space at one-tenth the cost of running of a traditional cooling system.)

total TCO by 40%, but slashed upfront costs from $200 million to $55 million (Carnemark). As explored throughout this report, the main issue for the industry lies in the misalignment between supply and demand: while efficiency may make the most economic sense, the market needs new business solutions and greater support and expertise to overcome the CAPEX hurdles, ineffective supply chains, and lack of understanding of the true financial impact of data centers. Moving this market is the goal of incentive programs such as the Con Edison C&I and the NYSERDA data center programs managed by panelist Amelia Axtell’s Lockheed Martin. The Con Ed program provides incentives for building efficiency measures in Con Ed territory, while the joint NYSERDA-Lockheed Martin program targets incentives specifically at data centers, including IT implementation incentives for any measures that reduce the data center’s energy footprint along with 50-50 cost-share incentives for technical assistance studies to explore efficiency opportunities.