Jabez Tan on Data, Internet Infrastructure and Sustainability
Source: Climate & Capital Media
More data, more appetite for energy
by Jim Gold | Jul 31, 2021
From China and the U.S. to Europe and Australia, the ever-growing demand for online data is taking a huge bite out of water and energy resources.
When you search Google, upload a picture of your precious grandchild to the cloud, stream “Gunpowder Milkshake” on Netflix or order a Big Mac from your phone app, you’re leaving a carbon footprint.
The global growth in online activity requires a huge amount of energy. Data centers account for about 1% of the world’s energy and 2% global CO2 emissions, about the same as the airline industry worldwide, analysts say.
“Everything digitally you do runs through a data center,” says Jabez Tan, head of research at Structure Research, a boutique consulting firm focused on the cloud and data center segments of the Internet.
Data centers number in the thousands – no one knows exactly how many the world has, but more are constantly in the works. Data centers house racks and stacks of millions of energy-consuming, heat-generating computer servers that not only store business information but can also connect your Amazon shopping cart to your bank credit card, share your medical records with doctors diagnosing what ails you, or let you explore the Minecraft world you built.
U.S. data centers consume about 70 billion kilowatt-hours (kWh) a year of energy in buildings that use 10 to 50 times more electricity than a typical commercial office building, the U.S. Energy Department estimates. Worldwide, much of that electricity comes from fossil-fuel power plants, especially in China.
Data centers also use billions of gallons of sometimes scarce water in cooling systems that keep the servers from overheating. A recent Virginia Tech study found that one-fifth of U.S. data center servers’ direct water footprint comes from moderately to highly water-stressed watersheds.
Data center operators say they are pursuing sustainable and more efficient setups. Digital infrastructure company Equinix, based in Redwood City, California and operating 230 data centers around the world, is leading the move to reduce its eco impact.
“Since 2015, Equinix has set a goal to move to 100% clean and renewable [energy] and has been actively driving a reduction of carbon emissions globally,” says Katrina Rymill, Equinix vice president of investor relations and sustainability. Equinix already procures 100% renewable energy for 180 centers, she says. In May, the company issued a $2.6 billion bond that included $1 billion in green bonds, Equinix’s third green bond offering.
China syndrome
China, the nation with the most data centers worldwide, recently announced a three-year plan for more centers to be clustered around the Beijing-Tianjin-Hebei area in the northeast, and the Yangtze River delta region.
However, 61% of electricity powering China’s digital infrastructure was generated from coal in 2020, according to a new Greenpeace report.
“Whether data center expansion will become a climate problem largely depends on how fast the sector switches to 100% renewable energy, ” says Ye Ruiqi, a Beijing-based Greenpeace climate and energy campaigner.
China’s market is segmented by telecom and telecom-neutral data center companies, Ye says. The largest Chinese telecoms are China Telecom, China Union, and China Mobile, followed by telecom (or carrier)-neutral operators GDS and 21 Vianet.
China has set a goal of bringing its carbon emissions to a peak before 2030 and becoming carbon-neutral before 2060.
Ye says only two data center companies in China, Chindata Group and Athub, have committed to achieve 100% renewable energy by 2030. Giants such as GDS and 21 Vianet have yet to release any renewable energy goals, she says.
In recent Greenpeace clean scorecard rankings for East Asia, Tencent took the top spot among cloud providers, beating out Alibaba, which fell to fourth place. Chindata Group scored first in the data center operator category.
As part of its clean-energy efforts, China says it is building a hydropower station that will generate 62.4 billion kWh of electricity every year. Straddling the provinces of Yunnan and Sichuan, the station will send power from the resource-rich west to energy-consuming regions in east China.
U.S.-based giants
Outside of governments, Google, Amazon and Microsoft are the leading U.S. operators of “enterprise” data centers, owned and operated by the companies for their own use and to sell cloud services to other companies. Think of Amazon servers helping you to play a mean round of Words with Friends or letting you catch up on the latest episode of Tell Me Your Secrets on Amazon Prime.
Google clusters data centers in 13 states including Virginia, home to the largest concentration of data centers in the world. It also has centers in nine regions among South America, Europe and Asia and plans eight more. Renewable energy is not available everywhere, particularly in Taiwan. Google says it matches 100% of its annual electricity consumption with purchases of renewable energy, but by 2030 intends to run on 24/7 carbon-free energy everywhere.
Amazon Web Services (AWS) clusters data centers around 25 geographic regions in the world with plans for seven more. AWS says it is on a path to powering operations with 100% renewable energy by 2025. It is also working to increase data center efficiency and reduce water use at its data centers.
Microsoft, which recently launched a rather beautiful virtual data center tour to show how data centers work, says its cloud has over 4 million servers containing more than 40 million hard disk and solid-state storage and media drives with 40 exabytes of storage capacity. (One exabyte = 1 billion gigabytes.) More is on the way. The company already operates more than 200 data centers in 34 countries and plans to add 50 to 100 a year in at least 10 more countries. The company says it is already carbon neutral and is working to reduce power and water use. Microsoft pledges to be water positive by 2030.
Enterprise data centers, or private data centers operated for the sole use of one company or organization, represent about 70% of data center capacity, Tan estimates. Even tech behemoths rent space in “colocation” data centers such as those run by Equinix and others. These are the Airbnbs of data centers, renting out space to customers who deploy servers within, Tan says. The data centers allow servers from different companies to talk directly to each other as well as access networks. Colocation centers handle about 30% of data center capacity.
The size of the global data center colocation market is about $54 billion, Tan says. The top 15 providers account for about half of the market, the largest among them being Equinix, Digital Realty Trust, China Telecom, NTT and China Unicom, he says in a recent report.
Size matters
Rather than estimating how many servers fit in a data center, they are ranked in size by electricity capacity and cost about $12 million per megawatt, Tan says.
The world’s largest data centers can contain many tens of thousands of devices and require more than 100 megawatts of power capacity, enough to power around 80,000 U.S. households, according to U.S. Department of Energy figures in a report by climate and energy think tank Energy Innovation.
The colocation industry will add close to 2,000 megawatts of new data center capacity annually through 2025, Tan says. He expects 38% of the growth in the Asia-Pacific region, 30% in North America, 27% in Europe, the Middle East and Africa, and 5% in Latin America.
Efficiency is another way data centers measure their sustainability efforts, Tan says. About 10 years ago, a 20-megawatt data center typically used only 10 megawatts to power all the servers, with the rest going to overhead costs such as lighting and cooling systems. That would result in a power usage effectiveness (PUE) rating of 2. The goal is to get as close to 1 as possible, meaning almost all the power goes to the servers.
Newer data centers average 1.4 to 1.5, but Google says its larger data centers operate at 1.10 PUE because it raises the temperature to 80°F, uses outside air for cooling and builds custom servers.
Data centers’ carbon footprint is an easy target for critics, Tan says.
“But we are at a very early stage of development, aware of the issues and pursuing better efficiency goals,” he says.
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