In an effort to help clients benchmark and improve efficiency of their IT operations and reduce their environmental impact, IBM (NYSE: IBM) has announced the industry's first corporate-led initiative to enable clients to earn energy efficiency certificates for reducing the energy needed to run their data centers.
The certificatesearned -- based on energy use reduction verified by a third-party -- for the first time provide a way for businesses to attain a certified measurement of their energy use reduction, a key, emerging business metric. The certificates can be traded for cash on the growing energy efficiency certificate market or otherwise retained to demonstrate reductions in energy use and associated CO2 emissions.
The Efficiency Certificates initiative engages Neuwing Energy Ventures, a leading verifier of energy efficiency projects and marketer of energy efficiency certificates, to document and verify the energy savings a client achieves through implementing energy efficiency projects. Energy efficiency projects can be identified using IBM's data center evaluation offerings. An evaluation will result in recommendations clients can take, including implementing virtualization technologies to reduce the number of physical systems needed, and fixing data center design flaws, to reduce unnecessary power consumption.
"Increased energy efficiency allows companies to dramatically reduce costs and improve the overall efficiency of their IT operations while at the same time supporting a corporate responsibility agenda," said Rich Lechner, IBM's Vice President of IT Optimization. "A key ingredient for clients to effectively become more environmentally aware and efficient is measuring where they are. By collaborating with Neuwing Energy, an independent party, IBM clients can be assured that energy reduction results are documented and verified consistent with current and developing standards. Utilizing this process, clients can gain an understanding of the business and environmental value in reducing data center energy consumption."
Energy efficiency certificates are a recognized form of documenting energy conservation and also provide financial incentive and recognition for businesses and electricity providers that increase their efficiency. Energy efficiency certificate values are determined by the number of certificates available and the demand for those certificates on each trading market. According to a 2006 joint study conducted by The World Bank and International Emissions Trading Association, private capital markets are the primary global force that can generate enough long-term resources for the world to use to transition to a future with cleaner energy and a safer climate.
Data centers can consume as much as 15 times more energy per square foot than a typical office building and, in some cases, may be 100 times more energy intensive. Energy efficiency opportunities can be significant. The System z consolidation project announced as part of IBM's Project Big Green earlier this year (consolidating 3900 distributed servers onto 33 System z servers in IBM data centers around the world), is anticipated to help conserve up to 119,000 MWH annually(3), enough electricity to power approximately 9,000 average homes in the U.S.
How it works:
- The Neuwing Energy assessments are a two-part evaluation to 1) determine the initial energy draw from the data center or IT equipment identified for consolidation based on industry accepted energy estimates for the servers in use and the power and cooling profiles of the data center, and 2) a second review of energy draw after steps are taken that are designed to reduce energy consumption.
- Neuwing Energy will issue customers an Efficiency Certificate for the total megawatt-hours of energy no longer needed to power and cool their data center or operate IT equipment. Neuwing Energy will keep a portion of each customer's earned certificates or charge a per MWH saved fee in exchange for the assessment.
- Customers can trade earned Efficiency Certificates on the energy efficiency certificate market or they can retain their certificates, using them to demonstrate reductions in energy use and associated CO2 emissions.
"Since the recent emergence of energy efficiency certificates as a market, we have seen market volume quickly grow into the millions of megawatt-hours and expect the energy efficiency market to surpass the renewable energy certificates market in a couple of years," said Matthew Rosenblum, Executive Vice President & CFO of Neuwing Energy. "Large or small, any company can take steps to reduce their climate impact by improving energy efficiency. These certificates further reward those companies that make a difference. We're proud to collaborate with IBM to launch this first-of-a-kind initiative that reinforces both companies' commitment to helping clients reduce the impact of data centers on the environment."
Consolidated Edison Company of New York (Con Edison), a regulated utility, provides electric service in New York City and most of Westchester County, and uses IBM technologies and services for its data centers.
"Con Edison is committed to supporting new and innovative programs to meet the Mayor's and Governor's goals, and slow the growth of energy usage by customers in our service area," said Rebecca Craft, Director of Energy Efficiency Programs for Con Edison. "We think verification is critical to ensure that businesses are achieving real energy reductions, and these certificates could provide the kind of verification we believe is important. We support IBM in its efforts on this front."
IBM intends to make the Efficiency Certificates program available across its entire line of systems and storage offerings, beginning with System z and System p in 2007. The Efficiency Certificates will first be available in the United States, and IBM hopes to expand participation to Europe in 2008.