Sustainability used to be about a good story: It’s not that way anymore, folks

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Summary

The pressure is on to improve data center sustainability, and that is not going away. Data center builders and operators can improve sustainability in many ways beyond buying carbon offset credits for renewable energy.

Sustainability was a high-profile theme at Data Center World 2023 and the collocated Data Center BUILD conference, held in Austin, Texas, May 8–11, 2023. Of note were presentations from three industry veterans:

• Ben Stewart, Senior Vice President for Operations at NTT Globa Data Centers
• Chris Crosby, CEO of Compass Datacenters
• Phill Lawson-Shanks, Chief Innovation & Technology Officer at Aligned Data Centers

This opinion piece is one of three articles on these industry veterans’ pragmatic messages and practical lessons. In this installment, Omdia overviews Ben Stewart’s remarks and insights. The Further reading section below includes links to Omdia’s coverage of Chris Crosby’s and Phill Lawson-Shanks’ insights.

A pragmatic look at the reality of carbon accounting for data centers

Stewart began his presentation, titled “A Pragmatic Conversation on Data Center Sustainability,” with “We work for companies who have made some commitments and then have dumped them in our laps to meet.” They must be satisfied. It doesn’t take much of a headline in the news to capture the attention of a company’s clients, their investors, the government, etc. Companies must react to that because their competitors or others responded to it. The cycle has been going on for some time and, in a sense, forced many companies to develop their approach and commitments to sustainability that may not have been well formed at the time. It’s up to data center managers to do their part to meet these commitments for their organizations.

A year or two ago, companies only needed a good story. “It’s not that way anymore, folks,” said Stewart. Recently, customer demands have led to the need to answer customer RFP (request for proposal) questions regarding sustainability roadmaps with specific scheduled data reporting criteria that show progress. Stewart says, “It’s starting to get real. The number one goal here, simply put, is to reduce and eliminate our greenhouse gas (GHG) emissions associated with business operations,” which Stewart reiterated many times during his presentation.

The industry is highly focused on GHG emissions and carbon dioxide (CO2) in particular, which is the de facto baseline for gases that trap heat in the atmosphere. Stewart points out that methane (CH4) has 32 times the global warming potential as CO2. HVAC refrigerants hydrofluorocarbon (HFC) and hydrochlorofluorocarbon (HCFC) used in many data centers have 1,000 times the global warming potential of CO2.

There are two goals for the data center industry:

• One: Know your carbon
• Two: Find ways to mitigate that carbon

In simple terms, carbon accounting. We have Generally Accepted Accounting Principles (GAAP) in the financial world. We don’t yet have a set of Generally Accepted Carbon Accounting Principles (GACAP) in the carbon accounting world.

In carbon accounting, there are two areas of data collection and reporting:

• Operations, or operational carbon, is Scope 1 and Scope 2 emissions. This is emissions from generators or HVAC refrigerants and power generation that feeds the data center. These emissions are recurring as the business operates.
• Building construction materials and infrastructure equipment, or embodied carbon, is Scope 3 emissions. This includes all the raw materials and manufacturing processes for building materials and infrastructure equipment that goes into the data center. These are one-time accounting items, as you only buy them once.

On the Scope 1 operational side, one issue is diesel generator operations. In most cases, generators run very little and account for less than 1% of data center emissions. However, they get a ton of attention and are criticized as polluters. Incorporating hydrotreated vegetable oil (HVO) into the fuel can optimize diesel generator fuels to lower emissions, but the availability and distribution can be challenging. Again, generators are a very small piece of data center emissions, so for the industry in general, HVO is not yet broadly used.

For Scope 2 utility power consumption, understanding the various market options for purchasing green energy that can be incorporated into carbon accounting has become complex. Power Purchase Agreements (PPAs), Green Tariff programs, and Renewable Energy Credits (RECs) are the most common instruments used to claim renewable energy carbon offsets. The Further reading provides a link to a description of these and other options.

Stewart does point out an important nuance that consumers should be aware of—many utilities disclose their power generation source mix. For example, a utility may claim that 40% of its energy supply is from renewables. Many think that means that 40% of their energy is renewable. “Not true,” says Stewart, because the only way to claim any renewable energy on their portion of the grid is through purchasing RECs for solar or wind power generation. Otherwise, you are using brown, non-renewable power.

Another nuance to the utility power mix is that you cannot buy RECs for renewable hydropower. If the utility claims 7% of its generation mix is hydropower, one can assume that 7% of energy consumption is renewable. However, nuclear power is not considered renewable despite being carbon-free. Thus, even if the utility mix is 20% nuclear, it is not regarded as renewable and cannot be claimed against carbon according to the definition of renewable.

Scope 3 embodied carbon is much more complex because it requires details on all manufacturing and distribution phases. The iMasons Climate Accord is pushing manufacturers to develop embodied carbon data for products so customers can report that carbon. This initiative and others are in their nascent stages, and the industry has yet to establish broad standards, like most other areas of sustainability. Stewart adds that no standards exist for measuring or reporting embodied equipment carbon. A standard on reporting it can be created, but how to measure it will likely encourage some amount of gamesmanship as companies debate what and how to measure embodied carbon.

Another scenario Stewart points out is purchasing used equipment or a brownfield data center build (retrofitting an existing building). New GHG emissions for the original manufacturing or construction are not being created in these cases. Another complication to embodied carbon accounting is end-of-life capital equipment replacement like UPS, Chiller, PDU, etc., and recurring items like batteries, filters, belts, spare parts, etc. These are issues that have yet to be addressed and highlight how far embodied carbon accounting has to go before it is mature.

According to Stewart, the goal is to drive the industry to be greener in equipment production and perhaps focus more on used/recycled equipment and brownfield data center builds as possible alternatives. Good news or not, the focus for now is on Scope 1 and Scope 2 emissions, so the pressure on Scope 3 reporting is low but is not likely going away.

Customer demands have become more sophisticated, and they are now looking for evidence, numbers, and proof a company is making progress against its sustainability roadmap. “This is real, folks. It’s no longer about a good story. It’s about coming up with the real stuff,” said Stewart.

Next steps in the journey

Like many things in the data center and IT industries, sustainability is not a new concept. It is in its infancy and has a long way to go before becoming a mature discipline. Rest assured, the subject is not going away for generations to come.

For readers early in their sustainability journey, the Further reading features additional highlight resources that cover some of the interesting or debatable subjects regarding sustainability. In addition, at Data Center World, AFCOM (Informa Group’s Association for Computer Operations Management) held a Leaders Lab workshop on data center sustainability. The event was an all-afternoon roundtable discussion regarding current trends and issues surrounding data center sustainability practices. The 14 attendees comprised various roles within the data center industry, including CIOs, CEOs, and CROs from a combination of colocation operators, investment firms, construction companies, hyperscalers, and more. The Further reading also includes the “Leaders Lab Executive Summary” link.

Appendix

Further reading

“‘It’s not rocket science’: Moving beyond renewable offsets” (September 2023)

“The one dumpster data center: Practical lessons for construction sustainability” (September 2023)

“2023 Leaders Lab Executive Summary” (August 2023)

“Analyst Call: Data Center Computing for AI and Sustainability” (August 2023)

“Nuclear data centers: Public perception improves for nuclear power, but headwinds persist” (July 2023)

“DCD Silicon Valley 2023: Hydrogen versus nuclear power” (July 2023)

United States Environmental Protection Agency, “US EPA Guide to Purchasing Green Power” (retrieved August 25, 2023)

United States Environmental Protection Agency, “US EPA Sources of Greenhouse Gas Emissions” (retrieved August 25, 2023)

Author

Alan Howard, Principal Analyst, Cloud & Data Center Research Practice

[email protected]