Rethinking data centre Total Cost of Ownership
Wed 5 Aug 2020 | Susanna Kass
We can no longer measure data centre TCO solely in terms of economic costs for the traditional design, construction, and operational expense of a data centre single site per megawatt installed. By Susanna Kass, Data Center Advisor to the UN’s UNEP DTU Partnership
We are living in a Connected Everything Era, with data centres rapidly expanding and depleting environmental resources. As an integral part of urban communities, they require abundant spaces and will remain the primary driver of global energy consumption in the foreseeable future.
This demand is disruptive during times of both peril and opportunity due to the Covid-19 pandemic.
Covid-19 has altered the demands of digital infrastructure 24×7 around the world. What we learned from previous economic dislocations, such as the dotcom bust or the 2008 financial crisis, is that data centre providers adapt, emerge, and stay resilient.
For the past twenty years, the data centre industry has averaged a tremendous growth rate of 6 percent per year globally. And more facilities are being built post-Covid-19 to support the exponential growth of digital services supporting the socially distanced, contactless, and work-anywhere new normal.
Corporate sector drives awareness
In the past decade, the need for sustainability within the data centre industry has gained awareness and importance. This shift stems from demand to clean up the ‘dirty cloud’ by digital services users, and by cloud provider suppliers to inspire and make pledges for near-term carbon neutrality.
On Earth Day in April, Google announced its commitment to carbon-free energy and 24×7 matching of clean energy. Microsoft and Amazon CEOs stated their ambition to be carbon negative and have established billion-dollar clean energy investment funds on clean energy assets, respectively.
A key priority for the industry is to have a sustainable future for our businesses that is not harmful to our environment or our society, ensuring a high quality of sustainable life for current and future generations.
The acceleration of net-zero data centre business models allows new capitals to become available. Environmental, social and governance (ESG) fund managers outperformed the broad market in the last few months during Covid-19, proving clean energy assets are a safe and better investment.
Simply put, it makes good sense for data centres to embrace the “Sustainability Cost of Ownership” to create more profit and benefits for the planet and its people.
It is inspirational for data centre sustainability pioneers to ambitiously maintain the exponential growth of digital services and data centre infrastructure during the Covid-19, while also maintaining a commitment to minimising planetary harm and scaling a profitable venture.
Where to start: rethinking the Cost of Ownership
Data centre investment is traditionally measured in the form of a site’s Total Cost of Ownership (TCO), which describes the sum of operational and capital expenses involved in constructing and maintaining a data centre.
TCO accounts for all site expenditures included in the data centre’s build and operation, such as the total cost involved in obtaining, utilising, installing, sustaining, disposing and changing IT and data centre assets.
For a data centre owned by a company, data centre pricing primarily depends on power delivery and cooling. But in colocation or wholesale data centres, cost depends on kilowatts per cabinet or megawatts/ kilowatts per space or module. The process of creating a site TCO usually starts with:
- Establishing a baseline for site energy costs which includes power capacity for each energy source over the expected lifespan of the site
- Calculating direct and indirect costs and overheads involved with the data centre build and operation and the capacity expansion plan
- Incorporating the legal expenses, relating to site inspections, site permits, local compliance and legal regulatory costs required for a data centre build
We can no longer measure data centre TCO solely in terms of economic costs for the traditional design, construction, and operational expense of a data centre single site per megawatt installed.
Rather, we must incorporate environmental and social costs into a Sustainable Cost of Ownership for end-to-end life cycle cost assessment and accountability.
That includes the life cycle costs of the carbon footprint and greenhouse gas (GHG) emissions generated per kilowatt-hour of power used by a data centre site.
This does not include synthetic instruments, such as a renewable power purchase agreement which offsets emissions. Such data centre sites still consume fossil fuel-generated power. They still produce e-waste and consume rare earth and construction materials.
To all this, one must add the resources used in the form of embodied energy used in the transportation of materials to sites, and resources used to discard waste materials after use.
The data centre and ICT industry are presented with a profound opportunity to enact our duty to future generations.
- To rethink “business as usual”; to re-envision net zero in site selection; to transition to clean energy infrastructure
- To take responsibility in clean energy generation
- To measure resource consumption; to eliminate waste
- To design for recycling, remanufacturing, disassembly, and reuse.
In improving our global sustainability efforts, we need to be accountable with regards to measuring the true costs of our choices economically, environmentally, and socially.
Sustainability through design and measurement
Sustainability has often been viewed through the lens of choices. That is the primary power of an individual consumer or business: When making purchasing decisions, do I choose the sustainable or unsustainable options?
And, to the credit of many visionaries and determined individuals, the data centre industry has pushed other sectors of the global economy to make sustainability a realistic choice.
The environmental costs of a fossil fuel-powered data centre are often not represented in the conventional measure of a TCO.
Using the best practice of Carbon-Free Energy (CFE) data centre illustrations from industry pioneers; each with its own innovation approach; 24×7 matching and net-zero anywhere, can further the understanding of Sustainability Cost of Ownership as a metric.
Google 24×7 CFE matching
Google has pioneered the use of Power Purchase Agreements (PPAs) to bring about renewable energy development. As of writing, the company has signed PPAs or other energy procurement agreements for over 3.1 gigawatts of renewable energy in the U.S., Europe, and South America.
On Earth Day in 2020, Google published an inside look at its electricity sources around the globe, to gauge progress towards carbon-free energy on a 24×7 basis on-site, with location-specific “Carbon Heat Maps” to visualise how well a data centre is matched with carbon-free energy on an hour-by-hour basis.
Their efforts take a departure from “business as usual” and from carbon energy offset, as well as taking responsibility in design and measure of clean energy generation and consumption to achieve net-zero.
The workload is analysed of its priority, categorised by how it is processed with the sustainability cost concept of clean energy resource use.
Google embraced a new carbon-intelligent computing platform to get closer to 24×7 carbon-free energy – all without additional computer hardware and without impacting the performance of Google services like Search, Maps and YouTube that people rely on around the clock.
By shifting the timing of non-urgent compute tasks — like creating new filter features on Google Photos, YouTube video processing, or adding new words to Google Translate — the company reduced its electrical grid carbon footprint and resource utilisation while achieving its 24×7 carbon-free energy goal.
InfraPrime Net-zero CFE anywhere
InfraPrime provides carbon-free energy design (CFE) to help data centres accelerate clean energy transitions with net-zero results.
The EcoPrime Power module is a good illustration for the Sustainability Cost of Ownership metric, which encompasses the traditional TCO metric of CAPEx and OPEX reduced expenditure of a CFE offering to meet the carbon-neutral/negative goals for data centres.
It also details the net-zero benefits to the environments and society, compared to the status quo of a fossil fuel-powered data centre using TCO metric.
InfraPrime makes the following business analysis for how this reduction in cost works and provides the resiliency that data centres need while providing CFE:
- Reduce CAPEX by reducing resources: By using a CFE design, data centres can drive down CAPEX. By removing dirty data centre components, such as diesel backup generators, we also remove upfront costs of land, materials, and equipment. Paired with the existing gas grid for power and a modular design that has power duality capability, data centres can consume only the resources they need while achieving resiliency, and utilise grid power as a backup source for the data centre.
- CFE with power duality: Onsite CFE can achieve the data centre’s need for uptime via Power Duality, where each data centre module has separate, multiple power feeds from CFE onsite energy to ensure uptime 24/7/365 with clean energy.
- Make the grid your backup: To ensure extreme resiliency, CFE with Power Duality can be paired with a grid connection for site-level redundancy in unpredicted failure scenarios. This means that you can use your onsite CFE with confidence that unpredicted failure would never not be handled by the CFE power duality or if there is grid failure, the load remains its uptime.
- Reduce OPEX with sustainable design: By simplifying the design of the data centre we also drive down operational expenses. For example, without auxiliary backup generators, there is no training, spare parts upkeep, fuel management, or state clean energy permits compliance. Likewise, by using modular design the facility upkeep is minimal and only grows as your load usage grows.
- Site selection: If possible, we always recommend placing data centre loads in places with extremely reliable, clean power grids, such as the Nordics where there is abundant of natural hydro-electric power. If not feasible, we can deploy CFE on-site for net-zero data centres.
- InfraPrime’s EcoPrime Power module delivers CFE by using existing gas infrastructure, fuel cells to convert clean energy and in utilizing hydrogen electrolysis, renewable fuel to power data centres and water is created as a by-product in a clean, resilient way to achieve net-zero (carbon, emission, waste) results and a triple bottom line (economics environmental, societal).
Looking beyond
I would like to thank the data centre industry for continuing its journey towards sustainability. The Sustainable Development Goals goals remain a call to action and a blueprint to chart its own course of actions and develop a concrete plan, especially:
Goal #7: Affordable and Clean Energy
Goal #9: Industry Innovation and Infrastructure
Goal #11: Sustainable Cities and Communities
Goal #12: Responsible Consumption and Production
Goal #13: Climate Change Action
I am passionate that our work is needed now more than ever to demonstrate our data centre industry’s own Sustainable Cost of Ownership scorecard to combat Climate Change.
It is wrong to set sustainability goals for 2030 when you can work relentlessly to achieve them in 2025. We wish to establish an industry-wide dialogue, foster collaboration, increase awareness, educate, and accelerate the data centre industry as a Sustainable Development Goal leader.
We can speak up, take a stance, measure our actions, clean up the dirty cloud, and only design, build and operate sustainable data centres to rebuild to a more sustainable future. Take a departure from the status quo to transition to clean energy and join the carbon-free energy (CFE) pioneers, Google and InfraPrime, to assume social responsibility of environmental resource, to embrace the planet and people as the stakeholders of your business.