Reducing the data centre carbon footprint
Technological advancements in energy procurement will enable data centres to reduce carbon emissions, according to a new industry report.
The ‘Data Centres Guide to Sustainable Procurement’ report has found the data centre sector is well positioned to benefit from technology that makes power purchase agreements (PPAs) available to smaller businesses using under 10 MW of power annually, as well as simplifying legal and financial processes around direct energy procurement.
The Australian data centre sector is responsible for more than 4% of national energy consumption — second only to the resources sector. It is also highly contested, with more than 50,000 data centres registered in Australia. Energy currently accounts for one in every five dollars of operational spending by the average data centre — the greatest single operational cost for most energy centres.
Even for those data centres whose usage exceeds the 10 MW threshold for traditional PPA procurement, traditional models of energy sales have presented barriers to sustainable energy buying for data centres. These include:
- concerns around continuity of supply
- complexity of negotiations and contracting for blended solutions (procuring power from more than one project)
- the long timeline for traditional PPAs
- intensive, complex and costly legal processes for procurement
- financial and backoffice challenges.
The introduction of technology will simplify procurement, standardise legal processes and allow more flexible and transparent energy purchasing options. It will also provide the Australian data centre sector the opportunity to directly purchase sustainable energy while lowering barriers around both size and complexity.
The report identifies three options for prospective data centre customers — direct PPAs, direct PPAs with firming arrangements (also known as ‘sleeved’ PPAs) and retail PPAs where a retailer offers energy linked directly to a specific project, guaranteeing supply.
“For a sector as energy-intensive as the data centre business is, having the option to engage in reliable, transparent and flexible green energy procurement is a game changer,” said report author, WePower’s Harley Tempest.
“WePower uses blockchain technology to trace energy from its source all the way through the purchase process right to the end buyer.
“This opens up options for the Australian data centre sector to buy power secure in the knowledge of where it came from, how it was made and how much it will cost.”
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