The Future of Internet Power

July 2, 2013
  • Ryan Schuchard

    Former Associate Director, Climate Change, BSR

Ryan Schuchard, Manager, Climate and Energy, BSR

Editor's Note: This article has been corrected to remove an inaccuracy. The statement that “the internet is responsible for nearly 10 percent of U.S. electricity” is incorrect given the complexities around establishing an accurate figure, and there is no recent data on this subject. BSR recently conferred with Jon Koomey, cited as the source in the original text, who clarified that the data on internet energy usage is challenging to quantify and estimates are often mischaracterized. 

While the internet can provide us with sustainability solutions—such as by making greenhouse-gas management more intelligent—it is also a significant cause of carbon emissions and other impacts.

Data centers contribute a major part of internet companies’ footprints (the other two contributors are end-user equipment and access networks)—representing 1 to 2 percent of total electricity use in the United States. As a result, data center sustainability has received a lot of attention in recent months and is a key area of interest among organized activists.

Today, data center operators are addressing their impacts by making serious investments in energy efficiency, especially in the areas of computing equipment and infrastructure. Beyond this, it is critical that internet companies address the source of electricity that powers data centers, which can multiply or undermine climate gains made through efficiency. This is because the mix of renewables, natural gas, and coal from a local grid determines the level of climate impact that results from generating a kilowatt-hour of electricity. And as data centers expand, operators are building sites in new locations where the electricity grid mix has a higher carbon footprint.

For that reason, more data center operators rightfully see the sourcing of sustainable, low-carbon electricity as a growing priority, and some leaders have started to take action. Facebook has developed a data center siting policy that states a preference for access to clean, renewable energy. plans to encourage its data center energy providers to increase their supply of renewable energy.

In some cases, companies are already based in, or moving to, areas powered mostly by low-carbon sources such as hydropower and nuclear (e.g. large parts of the West Coast and New England). In other cases, companies are operating in areas with higher-carbon intensity, typically where coal is a major source (e.g. much of the South and Midwest). In these places, the opportunity for leadership is to promote the development of power sources that have lower climate impacts.

Yet leading companies have found that there are several hurdles in pursuing this in the United States:

  1. Infrastructure requirements: While data centers can generate power on-site through solar, wind, and geothermal energy production, meeting a meaningful percentage of a facility’s energy demand usually requires generating power off-site. This means there will be a physical separation between power generation and use, and therefore, data center operators need to collaborate with those who manage electricity transmission and distribution, which are typically utilities.
  2. Cost premiums: While renewable energy is already cost competitive in communities with sufficient natural wind and hydro resources, more carbon-intensive coal power is still cheaper in much of the country. For that reason, companies that want to choose low-carbon electricity in places where it isn’t already online will generally face additional costs.
  3. Conditions and technicalities: For a company to make the most progress in advancing low-carbon power, its investments need to be additional (the power wouldn’t have been generated by a utility or developer anyway), accountable (it conforms to standard reporting), and scalable (it is easily capable of being expanded). Furthermore, for it to be seen as sustainable, it needs to minimize additional ecological impacts and avoid negative effects on communities. While many low-carbon energy initiatives have one or more of these traits, establishing them all is difficult.
  4. Operational complexity: While taking on greater ownership of low-carbon energy sourcing can drive real results, the actual operation of power plants requires technical expertise and ongoing maintenance. This might be a fit for some companies, but others feel it is more economically efficient to focus on their core business and outsource management to others.
  5. Regulatory environment: The ability to produce, transmit, distribute, and sell electric power is affected significantly by regulation. This regulation varies by state, and typically is aimed at ensuring a safe and reliable network and providing affordable costs to ratepayers. While regulation may have sustainability objectives—as are found in renewable portfolio standards and “decoupling”—they typically don’t encourage the kind of innovative partnerships that companies need to form in order to address the full set of challenges described here. In 2012, because of obstacles to acquiring power from low-carbon sources, eBay invested its support in the passing of Senate Bill 12 in Utah, which allows companies to buy and transmit power directly from sources of renewable energy.

These challenges add to a list of specifications that data center operators already have to consider when constructing new facilities, and the need to do so in the face of emerging technologies, policies, and standards. These factors make the sourcing of low-carbon power difficult for individual companies to manage alone.

To address these issues, BSR has formed Future of Internet Power, a new leadership initiative with Adobe, eBay, Facebook, HP,, and Symantec that will identify and publicize best practices around low-carbon power sourcing for data centers in the United States, and it will help internet companies work more effectively with key policymakers and utilities. As we move forward, we will be considering opportunities to expand these insights for additional regions and sectors.

Let’s talk about how BSR can help you to transform your business and achieve your sustainability goals.

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