On Earth Day 2019, the data center industry continues to make progress in operating sustainably, including a major new advance in making renewable power accessible to customers in multi-tenant data centers.
Iron Mountain recently became the first provider to implement a new reporting protocol that makes it easier for companies to apply green energy credits from their use of third-party colocation space to their corporate sustainability goals. Other providers are expected to follow suit.
The new guidelines for carbon accounting were developed through the Future of Internet Power, a collaboration between data center operators and several non-profit groups promoting corporate sustainability.
The new reporting guidelines address one of the major shortcomings in the movement to power data centers with renewable energy – allowing colocation customers to claim credit for renewable energy that is provisioned by their data center service provider.
New Urgency to Addressing Climate Risk
The improved access to renewables comes as a series of weather-driven disasters is boosting the urgency for the corporate sector to address climate change risk by slashing dependence upon fossil fuels. The rapid growth of cloud computing has sharpened the focus on the data center sector’s role in retooling the economy for a sustainable future.
Iron Mountain’s Green Power Plan is the first implementation of the new rules, which allow companies to account for energy based on who is actually using it, rather than who is purchasing it.
“Iron Mountain’s Green Power Pass is an exciting breakthrough for the data center industry and a wonderful demonstration of the power of collaboration between industry and NGOs,” said Miranda Ballentine CEO of the Renewable Energy Buyers Alliance. “By being the first product to come to market that uses the Future of Internet Power’s Requirements for Supplier-Procured Renewable Energy, Iron Mountain is showing the way for data center customers to easily access the benefits of green electricity.
“The barrier has been that tenants aren’t able to claim benefits for the green power that the data center company buys. We want others to join, and for the whole market to work together to change the industry.”
Kevin Hagen, Iron Mountain
“Now all colocation and cloud customers of any size can be part of the movement to increase demand and help realize the goal of an internet powered by 100% renewable energy,” said Ballantine.
The first customers to use the Green Power Pass program include Akamai Technologies, WeWork and Arizona State University.
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“The barrier has been that tenants aren’t able to claim benefits for the green power that the data center company buys,” said Kevin Hagen, vice president of environmental, social and governance strategy for Iron Mountain. For larger enterprise data center users, this is a huge breakthrough. The footprint they have in their data centers is material to their global carbon footprint. By greening their data center footprint, it’s making a material difference in their reporting.”
Hagen noted that Digital Realty, Equinix, IBM, Aligned Energy and Interxion also participated in developing the supplier energy accounting rules.
“We did this in a collaborative way with our peers in the industry,” said Hagen. “Others can do this. We were just able to go first. We want others to join, and for the whole market to work together to change the industry.”
“We don’t have to be part of the problem. We can be part of the solution,” said Hagen.
Solving the ‘Double-Counting’ Problem
Operators of huge cloud campuses have long been able to procure renewable energy for a facility and claim the benefits. If you’re a customer in a colocation facility or multi-tenant wholesale data center building, your choices are less clear.
The issue: which company gets credit for the renewable energy? The answer is simple for hyperscale operators, who operate their own data centers. Until now, there hasn’t been a way to address credits in a multi-tenant environment, so this energy has been usually claimed by the facility operator who purchased it. Reporting rules are designed to prevent “double counting” the same electrons by more than one company.
The Future of Internet Power set out to address this problem. The initiative was organized by BSR (Businesses for Social Responsibility), a non-profit which previously developed the Corporate Colocation and Cloud Buyers’ Principles as a tool for large buyers to encourage their data center landlords to source renewable energy.
The solution was to develop a formula that details the chain of custody of the energy, and apply it to different phases of the power distribution path, based on who controls the power usage – the provider or tenant. As an example, the provider controls the cooling, but the tenant controls the power used for IT load.
“What we wound up with is an agreement that the data center provider gets a portion,” Hagen explained. “The IT load is then classified as a different load, which belongs to the customer.”
The Green Power Program provides an annual certificate validating that 100 percent of the power a tenant uses at Iron Mountain is from qualifying renewable resources. Participating customers receive a detailed report on their power consumption and full documentation on the amount, source, and chain-of-custody of the wind, solar or other renewable electricity associated with that facility. Early adopter customers through June 30, 2019 can receive these credits free of charge.
This approach requires additional documentation and reporting. Iron Mountain has a lengthy legacy of compliance reporting from its document storage business, and has also invested in staff to support its sustainability initiatives.
“The green attributes of our renewable energy can be passed through to our customers,” said Hagen. “It’s changed renewable energy from a branding message to a real offering.”
Iron Mountain’s Green Journey
The rollout of the Green Power Program is the latest step in Iron Mountain’s growing focus on sustainability. As it has expanded its data center footprint, the company has arranged power purchase agreements (PPA) of renewable energy to offset the use of electricity in its data centers. Iron Mountain expects to source enough wind and solar power to equal 70 percent of its energy footprint for 2018.
This reflects a trend in which data centers have become larger players in power markets and have begun adopting sophisticated strategies to provision green power and manage the pricing and risk profile of its energy. This includes the use of third parties to craft virtual power purchase agreements to buy capacity through liquid marketplaces.
“We’ve actually built a whole competency around this issue,” said Hagen. “We’ve been moving from chapter to chapter in our efforts at environmental responsibility. We spent 18 months looking at the financial engineering behind carbon reduction and renewable energy. We’ve now achieved a good percentage of our goals.”
Hagen says the Future of Internet Power initiative is critical in enabling the data center industry to move beyond “feel good” public pronouncements to programs with metrics that deliver green energy benefits to customers.
“There was no way we could ‘efficiency’ our way out of these problems,” said Hagen. “Carbon counting became a proxy for understanding business risk. We’re literally making tens of millions on the bottom line while making our company more environmentally responsible.
“Our first step was to find cost-effective renewable energy solutions for our business,” he continued. “With GPP we can now pass through those benefits to our customers. And finally, by building on a new collaborative industry protocol, we’re showing that all data center providers can deliver this kind of solution.
“More customer access means more green power demand, and that will unleash market forces that we believe will result in a greener grid for everyone,” said Hagen. “It’s a sustainable business shift that is good for our customers, our business, our industry, and the environment.”