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  • Data centers are one of the largest and fastest growing consumers of electricity in the United States. In 2013, U.S. data centers consumed an estimated 91 billion kilowatt-hours of electricity -- enough electricity to power all the households in New York City twice over -- and are on-track to reach 140 billion kilowatt-hours by 2020.
  • Some large server farms operated by well-known Internet brands provide shining example of ultra-efficient data centers. Yet small, medium, and corporate data centers are responsible for the vast majority of data center energy consumption and are generally much less efficient.
  • The largest issues and opportunities for energy savings include the under-utilization of data center equipment and the misalignment of incentives, including in the fast growing multi-tenant data center market segment.
  • To move forward, systemic measures such as the public disclosure of efficiency metrics are necessary to create the conditions for best-practice efficiency behaviors across the data center industry.

Data centers are the backbone of the modern economy -- from the server rooms that power small- to medium-sized organizations to the enterprise data centers that support American corporations and the server farms that run cloud computing services hosted by Amazon, Facebook, Google, and others. However, the explosion of digital content, big data, e-commerce, and Internet traffic is also making data centers one of the fastest-growing consumers of electricity in developed countries, and one of the key drivers in the construction of new power plants.

In 2013, U.S. data centers consumed an estimated 91 billion kilowatt-hours of electricity, equivalent to the annual output of 34 large (500-megawatt) coal-fired power plants. Data center electricity consumption is projected to increase to roughly 140 billion kilowatt-hours annually by 2020, the equivalent annual output of 50 power plants, costing American businesses $13 billion annually in electricity bills and emitting nearly 100 million metric tons of carbon pollution per year.

While most media and public attention focuses on the largest data centers that power so-called cloud computing operations -- companies that provide web-based and Internet services to consumers and businesses -- these hyper-scale cloud computing data centers represent only a small fraction of data center energy consumption in the United States. The vast majority of data center energy is consumed in small, medium, and large corporate data centers as well as in the multi-tenant data centers to which a growing number of companies outsource their data center needs.

These data centers have generally made much less progress than their hyper-scale cloud counterparts due to persistent issues and market barriers, such as lack of metrics and transparency, and also misalignment of incentives.

Recommendations

While many tactical actions can improve data center efficiency, we recommend systemic measures to create the conditions for best-practice efficiency behaviors across the data center industry, including:

  • Adoption of a simple server utilization metric. The data center industry should adopt a simple metric, such as the average utilization of the server central processing unit(s) (CPU), to help resolve one of the biggest efficiency issues in data centers: underutilization of servers. Measuring and reporting CPU utilization is a simple, affordable, and adequate way of gauging data center efficiency that could be used immediately to drive greater IT energy savings in data centers.
  • Alignment of incentives between decision-makers. Data center operators, service providers, and multi-tenant customers should review their internal organizational structure and external contractual arrangements and ensure that incentives are aligned to provide financial rewards for efficiency best practices. Multi-tenant data center stakeholders should develop a "green lease" contract template to make it easier for all customers to establish contracts that incentivize rather than stand in the way of energy savings.
  • Disclosure of data center energy and carbon performance. Public disclosure is a powerful mechanism for demonstrating leadership and driving behavior change across an entire sector. In their corporate and social responsibility reports, industry leaders in data center efficiency should voluntarily disclose operational performance metrics (such as fleet-wide server utilization levels) and organizational performance (e.g., how they address split incentive issues internally and externally).

If just half of the technical savings potential for data center efficiency that we identify in this paper were realized (to take into account the market barriers discussed), electricity consumption in U.S. data centers could be cut by as much as 40 percent. In 2014, this represents a savings of 39 billion kilowatt-hours annually -- equivalent to the annual electricity consumption of nearly all the households in the state of Michigan. Such improvement would save U.S. businesses $3.8 billion a year.

last revised 9/15/2014

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