Investing in Clean Energy & Green Data Centres
The clean energy industry has remained remarkably resilient during the economic crisis, with US$ 243 billion in new capital invested in the sector in 2010 (a 30% increase on 2009), according to a report released today by the World Economic Forum in collaboration with research firm Bloomberg New Energy Finance. Meanwhile, Singapore is gearing up to green Data Centres in a big way, through a new certifiable standard and the Green Data Centre Innovation Challenge providing an opportunity for the DC operators to participate in rapid deployment of innovative Green DC technology and be more energy efficient, hence lowering business costs and make Singapore more competitive.
IDA Report Singapore from its Green Data Centre Conference 31 March 2011:
Data Centres in Singapore can now look forward to a set of standards to help them put in place the necessary policies, systems and processes to improve their energy efficiency and minimise environmental impact.
Developed by the IT Standards Committee (ITSC) together with Infocomm Development Authority of Singapore (IDA) and SPRING Singapore, the Singapore Standard for Green Data Centres – Energy and Environmental Management Systems (SS564:2010) – is a certifiable management system that provides DCs with a framework and methodology to achieve energy efficiency.
This is modeled after established international management system standards, and is based on the Plan-Do-Check-Act (PDCA) continual improvement framework.
The Singapore Standard also includes recommended metrics for DCs to measure and track their performance in energy efficiency, and identify the potential areas for improvement. With the Standard, DCs can adopt best practices to help manage their mechanical and electrical systems, IT equipment and data centre design.
Among the first to adopt the Singapore Standard for Green Data Centres SS564 are seven organizations from both the public and private sectors. These organizations have substantial data centres to support their business operations. They are 1-Net, National Library Board , Singapore Telecommunications, Resorts World Sentosa, IBM, Keppel Datahub, and Nanyang Technological University (NTU) High Performance Computing Centre.
“Data centres are critical in supporting the development and operations of nearly every sector of the economy. At the same time, they are contributors to the carbon footprint given their heavy usage of energy. The Singapore Standard for Green Data Centres is therefore very timely and will enable greater energy efficiency and environmental sustainability in our data centres,” said RADM(NS) Ronnie Tay, Chief Executive Officer of IDA.
In Singapore, the 10 largest data centre operators consume energy equivalent to 130,000 households. In addition, the commercial data centre space in Singapore is forecast by BroadGroup to grow 50% from 2010 to 2015. Data centre-related costs will also continue to increase, largely driven by energy costs.
Gartner estimated that energy-related costs account for approximately 12% of overall data centre expenditure and is the fastest rising cost in the data centre. Capturing these cost savings for Singapore on a concerted basis will provide a significant boost to the cost competitiveness of Singapore’s DC industry.
“The Singapore Standard for Green Data Centres SS564 provides a framework and methodology to measure their energy efficiency. The methodology serves as a common benchmark to help data centres track their performance and identify areas for improvement. Certified data centres not only benefit from reduced costs and higher efficiency, they can also gain recognition from their clients and industry partners for good energy and environment management practices.
This will help open up market opportunities for these companies,” said RADM(NS) Tan Kai Hoe, Deputy Chief Executive of SPRING Singapore.
According to a report on “Revolutionizing Data Center Efficiency” in 2008 by McKinsey-Uptime Institute, in the US, the average DC consumes energy equivalent to 25,000 households In Singapore, the 10 largest data centre operators consume energy equivalent to 130,000 households. In addition, data centre capacity is projected to increase by 50% from 2010 to 2015 with a corresponding increase in energy consumption . This highlights the importance of driving energy efficiency of data centres in Singapore.
An indicative figure from different sources points that IT equipment utilises 30% of the total energy consumed by a DC, with the remaining 70% taken up by cooling, electrical and other loads. This usage scenario presents ample opportunities for DCs to reduce their energy consumption and operating costs through implementing green practices for both the IT and non-IT domains.
It is estimated that the adoption of green practices can reduce DC energy use by up to 55% according to the “Report to Congress on Data Centre and Server Energy Efficiency” by the U.S. Environmental Protection Agency in Aug 2007. This translates into potential annual savings of US$5.1 billion in electricity costs for the US industry alone, if DCs in the US were to go “green”.
Similarly, capturing these cost savings to Singapore on a concerted basis could provide a significant boost to the cost competitiveness of Singapore’s DC industry. Developing a suite of measures to make it easy for companies to set up new green DCs or to help existing DCs go green, can give us an edge in attracting and retaining DCs in Singapore.
To steer local DC industry towards better energy efficiency and to prepare themselves for the next wave of growth in Singapore, the Infocomm Development Authority of Singapore (IDA), in partnership with strategic partners such as SPRING Singapore and Building and Construction Authority (BCA), is working on initiatives that encourage and enable data centres to be more energy efficient.
a) Singapore Standard for Green Data Centres
b) BCA-IDA Green Mark for Data Centres
c) Green Data Centre Innovation Challenge
The Singapore Standard (SS) for Green Data Centres is an initiative spearheaded by IDA Singapore, in partnership with the IT Standards Committee (ITSC) under SPRING Singapore. The purpose of the SS for Green DC is to help organisations establish the policies, systems and processes necessary to improve the energy efficiency of their DCs.
Development of the SS commenced in November 2008 with the formation of an industry-public sector working group, comprising members across the data centre value chain – DC operators, enterprise data centres, DC designers, facility managers and government agencies.
The Standard was gazetted on 7 Jan 2011 as Singapore Standard (SS) 564:2010 and is ready for use by data centre operators/owners. The Standard is a management system standard that provides DCs with a recognised framework as well as a logical and consistent methodology to achieve energy efficiency and continuous improvement in this area. It adopted a holistic approach and is a world’s first in integrating energy and environment management system together with performance metrics and recommended best practices while addressing specific needs of DCs. As with other management system standards such as ISO 9000 and ISO 14000, SS564:2010 is a certifiable standard that will help DC operators/owners to improve their overall energy and environmental performance and increase their competitive edge.
SS564:2010 specifies the need for management commitment, a green policy, as well as clearly defined roles and responsibilities within the organization for implementing a green DC. It also outlines a process based on the Plan-Do-Check-Act (PDCA) cycle for data centres to go green. The PDCA cycle is a widely recognised process for quality improvement in the area of energy efficiency. It also provides organizations with a guide on “How to go Green”.
To complement the SS for Green Data Centre, IDA and the Building and Construction Authority will be working on a new Green Mark category called the “BCA-IDA Green Mark for Data Centres” to benchmark the performance and rate the greenness of DCs. While the SS for Green DC addresses the issue of “How to go green”, the Green DC Rating System complements it by answering “How green the DC is.”
This new Green Mark for Data Centres offers a common acceptable yardstick, which will enable DCs to benchmark their degree of greenness with respect to their peers. Rating a DC in categories such as “Platinum”, “Gold”, and “Silver” provides impetus for DCs to better their energy efficiency performance and also improve their branding.
The criteria for this new Green Mark category is being developed and will cover performance efficiencies in areas such as energy, water and environment. As data centres have more extensive ICT equipment and electrical systems, and cooling requirements, emphasis will be placed on their deployment, usage and management. In the development of the criteria, industry consultation exercises will be carried. Pilot trials of the criteria will also be conducted. The Green Mark for Data Centres will be ready for the industry’s use in a year’s time.
Some of the barriers to Green Data Centre adoption in Singapore include risk aversion of DC operators, as well as the lack of awareness of new technologies. The Green Data Centre Innovation Challenge will provide an opportunity for the DC operators to participate in rapid deployment of innovative Green DC technology. The objective of the Innovation Challenge is to spur the DC operators to be more energy efficient, and hence lower business costs and make Singapore more competitive.
IDA will issue a Call For Collaboration (CFC) to facilitate ICT and Mechanical and Electrical (M&E) industries jointly collaborating with data centre operators to develop and deploy holistic and innovative solutions. More than just point solutions, these solutions will comprise a combination of technologies that will significantly improve DC energy efficiency such that it can be used as a showcase.
A CFC allows DC operators/vendors to choose their own partners, and have ownership of their “Green DC” pilot deployment. This will help them to understand and assess the technology and business viability of Green DC solutions, thus lowering the risk of a failed commercial deployment. With co-funding from the government on the pilots, DC operators may be encouraged to try out new and innovative Green DC solutions.
A public briefing will be held at the upcoming Green Data Centre Forum to highlight the intent of the Challenge, and to provide networking sessions for the industry to facilitate potential collaborations and tie ups.
The winners of the CFC can conduct their pilot deployments of Green DC technologies in their own data centre, or even at the vendors’ premises as deemed appropriate. These deployments will also act as showpieces for the rest of the industry to learn from.
Depending on the number of submissions for the CFC, IDA intends to fund 3 to 5 consortia for 30% – 50% their pilot deployment costs, and have these deployments as showpieces for the rest of the industry to learn from.
The benefits of the Innovation Challenge include:
a) Improvements to the efficiency, effectiveness and quality of energy usage and adoption of ICT to achieve this by the private sector;
b) Accelerate adoption in order to help companies remain competitive through improved technological capabilities, and
c) Build capacity in a new generation of work skills that crosses M&E engineering, ICT and design disciplines.
About Infocomm Development Authority of Singapore
The Infocomm Development Authority of Singapore (IDA) is committed to growing Singapore into a dynamic global infocomm hub. IDA uses an integrated approach to developing info-communications in Singapore. This involves nurturing a competitive telecoms market as well as a conducive business environment with programmes and schemes for both local and international companies. For more news and information, visit www.ida.gov.sg.
About SPRING Singapore
SPRING Singapore is the enterprise development agency for growing innovative companies and fostering a competitive SME sector. We work with partners to help enterprises in financing, capabilities and management development, technology and innovation, and access to markets. As the national standards and accreditation body, SPRING also develops and promotes internationally-recognised standards and quality assurance to enhance competitiveness and facilitate trade. Please visit www.spring.gov.sg for more information and news about SPRING Singapore.
From Kai Bucher of the World Economic Forum (1 April 2011):
New York – The clean energy industry has remained remarkably resilient during the economic crisis, with US$ 243 billion in new capital invested in the sector in 2010 (a 30% increase on 2009), according to a report released today by the World Economic Forum in collaboration with research firm Bloomberg New Energy Finance.
The report, Green Investing 2011: Reducing the Cost of Financing, explores recent investment trends and examines which national policies are proving most efficient in spurring clean energy deployment.
Using a levelized cost of energy (LCOE) analysis that employs Bloomberg New Energy Finance’s most up-to-date private sector data, the report highlights which policies result in appropriate prices being paid for clean energy – and which ones have resulted in significant overpayment.
The Green Investing 2011 report – the third in a series on green investing published by the World Economic Forum – also finds that:
Despite the US$ 243 billion invested in clean energy in 2010, there is still a considerable way to go to reach the estimated US$ 500 billion annual investment needed by 2020 to limit global warming to 2°C, a level that does not compromise economic growth.
While over US$ 194 billion in government stimulus funding has been pledged to date for the clean energy sector, clean energy technologies such as solar and onshore wind already compete in some places without subsidies due to continued reduction in costs.
Policy design is integral to reducing the cost of capital, hence ensuring that clean energy is available at the lowest possible cost.
To build long-term consensus on clean energy, policy-makers should ensure that the benefits of lower costs of clean energy are passed on to consumers or taxpayers rather than accruing to the clean energy sector.
“The lesson of countries such as Spain, Germany, Italy and the Czech Republic in recent years is that, where generous policies lead, investment and clean energy deployment will surely follow,” said Michael Liebreich, Chief Executive, Bloomberg New Energy Finance, United Kingdom, and co-author of the report. “The real question, though, is: how do you spur development without creating a boom/bust cycle and without overpaying? With budget belts around the world tightening, policy-makers owe it to their taxpayers and energy users to find the most efficient ways of supporting the clean energy industry.”
“We hope that this report will provide a valuable framework for decision-makers as they examine strategies to close the US$ 250 billion annual clean energy investment gap,” said co-author of the report Anuradha Gurung, Associate Director, Investors Industry, World Economic Forum. “Closing this gap is fundamental to the transition to a low-carbon economy.”
The first report from 2009, Green Investing: Towards a Clean Energy Infrastructure describes what a low-carbon energy system would look like, and estimates that it would require investments in clean energy to grow to US$ 500 billion per year by 2010 for global warming to be limited to 2°C so that economic growth is not compromised. Green Investing 2010: Policy Mechanisms to Bridge the Financing Gap focused on the range of policy tools that might help spur large-scale investments into clean energy.
The World Economic Forum is an independent international organization committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas.
Incorporated as a not-for-profit foundation in 1971 and headquartered in Geneva, Switzerland, the Forum is tied to no political, partisan or national interests.