Green IT: Good for business, good for the environment

So what is the main driver for developing a Green IT strategy? Is it for the green image? Is it driven by the green advocate from within? Or is it because the organization genuinely cares about the ever-increasing carbon footprint generated from the use of IT?

Sadly, it would seem that the main driver is not motivated by good intentions, but by the increasing cost of energy to business to meet growing computing demand and the capital cost of data centers, according to Kenneth Brill, Founder of the Uptime Institute.

The truth is, something has to be done before we run out of power. By 2011 data centers will consume 3% of electrical energy, three times what it was in 2000. In Ken Brill’s words “It's time that the nation's business and government leaders publicly commit their organizations to make enterprise IT and data center energy efficiency a strategic-level priority and set aggressive and quantitative goals for rapid improvement.”

The surprising thing is many C-level executives (for example CIO, CTO, CEO) still don’t understand the significant savings that can be made through the implementation of some relatively simple green strategies. [Look out for my future blog: Quick Wins For A Green Data Center Strategy] A greater understanding is required of where energy is being consumed and wasted in IT in order to make informed decisions to reduce costs and carbon, enabling organizations to move forward and make improvements.

The message is simple, by increasing efficiency, reducing energy consumption and complying with future regulation (UK: Climate Change Levy, US: Cap-and-Trade), your green strategies will offer costs savings benefits while transforming your organization.

[Read my carbon tax blogs for more information on the Climate Change Levy and Cap-and-Trade Program]

In a survey conducted by IBM & Info-Tech Research, 60% of respondent companies had realized benefits from Green IT in terms of decreased electricity and consumable use, decrease in investment, an increase in features and functionality and in meeting customers’ demands. Companies have also realized rebates from utility companies or Government.

So now that it’s been recognized and proven that green is good for your business and for your bottom line, it’s time to stop talking about it and start doing it.

The UK Tax Implications of High Energy Usage in Data Centres

A data centre with 1000 servers running at 13% utilization with a Power Usage Effectiveness (PUE) of 2 and an energy rate of 0.12p per kWh will pay £18k in CCL taxes per annum.

The following is a summary of UK Government legislation for energy and climate change.

Climate Change Levy (CCL)

Introduced on 1st April 2001 the CCL is a tax on the use of energy in industry, commerce and the public sector. The levy applies to industrial and commercial energy supplies in the following sectors: industry, commerce, agriculture; and public and service sectors.

Taxable commodities and rates:

Taxable commodity	Rate
Electricity	£0.00456 per kWh
Gas supplied by a gas utility	£0.00159 per kWh
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state	£0.01018 per kilogram
Any other taxable commodity	£0.01242 per kilogram

Source: http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageExcise_InfoGuides&propertyType=document&id=HMCE_PROD1_027235

Department of Energy & Climate Change (DECC)

The DECC was created to bring together energy policy with climate change mitigation policy. Climate change and energy policies are inextricably linked – two thirds of our emissions come from the energy we use. Decisions in one field cannot be made without considering the impacts in the other.

Carbon Reduction Commitment (CRC)

Starting in 2010 CRC is for all businesses not covered by a climate change agreement (see below) and the EU Emissions Trading System (See below). The policy has been developed with DECC, Energy Act 2008 and the Climate Change Act 2008. An estimated 20,000 organizations will be affected by the scheme and failure to comply will result in penalties.

How does it work? (Proposed)

• CRC will cover organizations with an annual energy bill of > £500k
• All energy other than transport fuels is included in the figure
• Carbon allowances will be allocated by auction
• Annual allowances will reduce over time
• Participants may be able to buy EU ETS credits to comply with emissions cap (see below)
• League tables published outlining best and worst performers in terms of carbon emission and reductions
• Self certification of monitoring, reporting and verification of emission
• Backed by independent risk based audit regime

European Union Emissions Trading System (EU ETS)

The rationale behind emission trading is to ensure that the emission reductions take place where the cost of the reduction is lowest thus lowering the overall costs of combating climate change.

How does it work?

• Government allocates (free) emissions allowances to participating companies·
• If the company goes over their allowance they can purchase additional allowances from the market·
• The additional allowances are sold by companies who have emitted less than their original allocation of allowances

Emissions trading gives companies the flexibility to meet emission reduction targets according to their own strategy; for example by reducing emissions on site or by buying allowances from other companies who have excess allowances. The environmental outcome is not affected because the total amount of allowances allocated is fixed.

Energy intensive sectors

Energy intensive sectors are a wide range of industrial sectors, from major energy intensive processes such as steel, chemicals and cement, to agricultural sectors, such as intensive pig and poultry rearing.

Climate Change Agreements (CCA)

Climate Change Agreements (CCAs) allow eligible energy intensive business users to receive up to an 80% discount from the CCL in return for meeting energy efficiency or carbon saving targets set by the Government.

CCAs have a two-tier structure:

• A sector-level agreement between Defra and the sector or trade association (known as an umbrella agreement)
• Individual agreements between Defra and the operator of the facility (known as underlying agreements).

Targets are set on a company by company basis and must be met in order to receive the discount.

Recommendations for Reducing Energy and Taxes:

Employ the use of a reporting tool for measuring and monitoring energy use and sever efficiency. This will aid decisions such as decommissioning underutilized servers and the reallocation of workloads to use servers more efficiently, all of which will reduce overall energy consumption including cooling costs.

Lower overall energy consumption = Lower taxes

Understanding US Government Carbon Tax: Cap-and-Trade

A data center with 1000 servers running at 13% utilization with a Power Usage Effectiveness (PUE) of 2 will be producing approximately 2000 metric tons of CO_{2 per year. If we estimate that each Cap-and-Trade permit (per metric ton) will cost $15, a 1000 server data center will pay $30k in Cap-and-Trade taxes per annum.}

The goal of Cap and Trade is to reduce greenhouse gas emissions including carbon dioxide throughout the economy using cost effective methods. The program is yet to be finalized.

What is The Cap?

Large emitting companies will have a limit on the amount greenhouse gases they can emit. Each ton of GHG emitted by the company must be covered by a permit. The number of permits will be reduced over time allowing less pollution until the crucial reduction goal is met.

What is The Trade?

A set number of permits are issued per year ensuring that the overall reduction of greenhouse gases is achieved. Efficient companies who successfully emit less than their target can then trade their remaining permits to companies who are not able to reduce their emissions, acting as a reward for the efficient companies.

What is a successful program?

A successful Cap-and-Trade program would limit the rise in global temperature to approximately 2.0 degrees Celsius / 3.6 degrees Fahrenheit above pre-industrial levels by 2050 as part of a larger plan to abate global warming. In order to achieve this, US Government will have to lower the cap until emissions are reduced to 80 percent below 1990 levels by 2050. Initially the government would auction off the permits for around $10 to $15 per metric ton of CO₂ or its equivalent[1].

The program is initially estimated to generate in the region of $50 billion rising to $300 billion. Revenues are expected to be used to help offset costs to businesses and shareholders of affected industries and to help low to middle income Americans cover the cost of energy price increases which may occur as a result of the switch to renewable energy sources. It will also be used in the development of green technologies and trading.

Recommendations for Reducing Carbon and Taxes:

Employ the use of a reporting tool for measuring and monitoring energy use and sever efficiency. This will aid decisions such as decommissioning underutilized servers and the reallocation of workloads to use servers more efficiently, all of which will decrease energy consumption including cooling costs, reducing your overall carbon emissions.

Lower carbon emissions = Lower taxes

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[1] Center for American Progress: Cap and Trade 101 (2008)

New Year New Leaf

The British Computer Society's Young Professional Group held their first green IT event on January 28 at Southampton Street. 'New Year New Leaf' was an opportunity for YPG members to hear from expert speakers from the government, public and private sectors.

Watch video highlights of the event

The aim of the evening was to address the top issues surrounding green IT with presentations from the speakers followed by a question and answer session. This event was put on as a result of requests from YPG members for events on hot topics in addition to the soft skills event series currently running, namely skill centres.
The experts

Our five expert speakers brought with them a wealth of knowledge from vastly different backgrounds. Firstly we heard from Adam Clamp who has been working in IT for the last 15 years. In 2007 he founded 'The Green IT Company' and has since been offering environmentally sound IT solutions to his clients.


Adam is a keen environmentalist and advocate of sustainable computing, and in his presentation he addressed the issues surrounding environmentally focused IT and the need for consumer influence to drive change in the IT sector.

Adam demonstrated the need for change in the form of the facts and statistics of today's consumer society and asked that we all think about the necessity (or otherwise) of purchasing new equipment, the life cycle of producing that equipment and the waste which is produced in doing so, including the disposal. Adam feels behavioural change is a key aspect of Greener computing.

Our research expert Euan Davis, from Forrester, specialises in sourcing, off-shoring and multi sourcing and is now recognized as the green IT expert for Europe by Forrester. Euan discussed what has been happening in green IT throughout 2008 and how he believes it will evolve over the coming years.

He touched on the effects the recession is having on green IT and how companies are focusing their minds on the basics 'cost'. Euan believes the revival of green IT strategising will occur when legislation is put into place by government.

Euan also talked about his recent research into carbon transformation, which includes analysing a business's value chain as well as its outsourcing value chain. Euan believes that vendors, businesses and government need to work together to bring about change.

Five expert speakers Speaking to us about Government initiatives was Bob Crooks, head of business relationship management for DEFRA. Bob is leading the green ICT programme for DEFRA and its executive agencies, which are seeking to reduce DEFRA's IT carbon footprint by evolving their working practices.

Bob described how they are looking to make better use of their equipment and to extend its life where possible. Other areas DEFRA are focusing on are energy and travel reduction with schemes such as 'Access anytime, anywhere' for more flexible working for staff wanting to work from home and to reduce the need to travel to meetings.

Bob outlined the future target as carbon neutrality for all ICT across all estates by 2012 including all outsourced IT. Bob is also directly involved in the development of PAS 2050, the publically available specification (PAS) for the measurement of the embodied greenhouse gas emissions (GHG) of products and services across their life cycle.

He has also recently launched the BCS Green IT Specialist Group, which is set to be a leading focus group for the BCS Membership including the implementation of best practice and guidelines.

Yosuke Von Heyden shared with us the successes of the implementation of green strategies within Transport for London (TfL). Yosuke joined TfL on their information management graduate scheme after graduating from King's College London and Imperial College London. He has since moved into a strategy role specialising in green IT.

Yosuke described how the successful reduction of carbon emissions has been achieved at TfL by responsible and ethical procurement, waste reduction, power consumption monitoring through the installation of thin client technology, and data centre virtualisation and consolidation.

They are looking to reduce their overall energy consumption by 53 per cent by 2010. Yosuke believes this will be achieved by addressing three key areas: the overall carbon foot; equipment lifecycle; and behavioural change.

Our final speaker was hardware specialist James Petrini. James graduated from Oxford Brookes University 1992 with an engineering degree. He has since worked for The Environment Agency and for Sun Microsystems UK as an IT engineer. James is currently director of Greenshift Limited, a Sun Microsystems Partner specialising in ultra thin clients.

During James' presentation he discussed the main benefits of Sun Microsystem's ultra thin clients: the manageability; the environmental benefits; security; and value of the product. James also offered an insight into different solutions available and how they could fit into a particular organisation's setup to help reduce energy consumption.
The Q & A session

After hearing from the speakers the floor was opened up for questions. We had some interesting discussion around third sector organisations, advice for small to medium sized businesses on how they can begin to reduce their impact, and what individuals can do within an organisation to help reduce their overall impact on the environment.
Networking

The post-event networking was well attended and all the speakers were available to answer questions. The atmosphere was jolly and everyone enjoyed themselves. In the future the YPG are looking to aid the networking sessions by providing additional information to attendees about one another, for instance job titles and / or organisations. This will help to maximise the networking time by enabling them to seek out the people they would most like to talk to.
To conclude

Feedback from the members and speakers was excellent. The general feeling from members was that they had gained a great insight to the developing field of green IT. It has also been good to learn that not only have people gained an insight into green IT but they also feel it has influenced their thoughts and decision making since the event, especially when it comes to daily working practices.

The event highlights will be available soon on YPG.tv on the YPG pages, along with some of the speakers' slides. Look out for more exciting cutting edge events in the future brought to you by the YPG.
Want to get involved?

You can start by coming along to a YPG event, whether it's in your local area or at the London offices. We've also got a presence on Facebook and LinkedIn, so get in touch.

Watch video highlights of the event

February 2009