The four companies that issued the statement are some of the largest data center users in the world. They spend billions of dollars every year on building, leasing, and operating data centers around the world. They are also customers of data center providers like Equinix and Digital Realty Trust.
US data centers consumed about 70 billion kilowatt-hours of electricity in 2014, the most recent year examined, representing 2 percent of the country’s total energy consumption, according to a study completed last year by the US Department of Energy.
While data center providers have for years abstained from making big investments in renewable energy, letting the hyper-scale platforms lead on powering their data centers with wind and solar energy, they recently changed their attitude and made some of the first large-scale power purchase agreements with wind and solar project developers.
Redwood City, California-based Equinix, the world’s largest retail colocation and interconnection provider, last year signed wind and solar power purchase agreements whose total capacity matches the demand by its data centers in North America.
A blog post summarizing the company’s renewable energy efforts to date appeared on its website the same day Trump signed the executive order but did not mention the president’s action. An Equinix spokesperson did not respond to a request for comment for this article.
San Francisco-based Digital Realty last year contracted for enough wind power to cover its retail colocation footprint in the US. Digital is the world’s largest wholesale data center provider that is expanding in a big way its retail colocation and interconnection business, an effort that started with its $1.9 billion acquisition of colocation provider Telx in 2015.
A Digital Realty spokesperson did not respond to requests for comment.
Switch, a smaller Las Vegas-based provider known for its massive SuperNAP data center campuses in its hometown and several other locations, said it will continue pursuing its renewable energy goals. “Switch is steadfast in its commitment to continue using 100 percent renewable energy,” Adam Kramer, the company’s executive VP of strategy, said in an emailed statement.
Big Colo Users Want Clean Energy
Renewable energy has come down in price significantly in recent years, while demand for data center services powered by it has been rising.
Sixteen big-name corporate users of data center services, including Facebook, eBay, Hewlett Packard Enterprise, Adobe, Salesforce, Oracle, Akamai, and Bank of America, have signed a recently issued list of principles designed to unify voices of corporate data center and cloud customers seeking data center services powered by renewable energy. The principles, spearheaded by the industry association Business for Social Responsibility, were released last July.
Titled The Corporate Colocation and Cloud Buyers’ Principles, the document lists six things data center and cloud providers can do to help their enterprise customers meet their sustainability goals. They consist of offering cost-competitive services powered by renewable energy, regular reporting of data center energy and water consumption and greenhouse gas emissions, collaborating with customers on energy efficiency, working on incentives to reduce energy consumption, improving transparency, and advocating for policy in support of renewable energy.
A formalized process for data center providers to join as signatories of the principles is currently in the works, but several providers, including Equinix, have already voiced their support at least verbally, Kelly Gallo, a manager at BSR, said in an interview with Data Center Knowledge. They also include Switch, Aligned Energy, Green Mountain, and Infomart.
“It’s still pretty apparent that there’s a strong business case for renewable energy use [by data center operators], because of the cost in certain markets within the states,” Gallo said.
Clean Megawatts Not Easy to Buy
Data center operators will have to continue advocating for renewable energy, because their access to it will continue to depend on the availability of market mechanisms for its procurement, she added. Far from all states and utilities in the country have made it easy to make utility-scale renewable energy purchases, and data center operators often have to spend a lot of resources on protracted negotiations with utilities and regulators to secure these multi-megawatt contracts.
There’s incentive for utilities to listen. Data center operators are some of their favorite customers. They buy a lot of energy, and their power loads are consistent, which means fewer headaches associated with managing fluctuating loads to keep supply and demand on the grid in balance.
Because there are such strong business incentives for utilities to attract data centers to their territories, data center operators have a lot of leverage in negotiating with them — leverage climate advocates have been calling on the tech giants to use in getting more renewable energy generation onto the grid.
“Utilities will want to listen to their customers,” Gallo said. At the end of the day, “who’s going to be paying the utility bill?”
And data center providers will probably want to listen to their customers too. It’s unclear why some of them have chosen to remain silent on the Trump administration’s push to roll back climate regulations. It could be because there’s still a lot of uncertainty about which rules the administration will actually be able to nullify. They could also simply be trying to avoid getting involved in a controversial, high-visibility political battle – behavior that is typical for data center providers but not for some of their biggest clients.
But implications of potential changes to the country’s climate policies are just as big for data center providers as they are for data center users. Health of the entire data center industry to a great extent depends on the energy market, and any substantial changes that affect the latter will affect the former. Just what those changes will be, however, is too early to tell.