Incentives for On-Site Power Generation for Data Centers
Last of a 3-part article on incentive programs offered by utilities and state energy offices to manage and control data center energy use
While utilities and state energy offices offer rebates for cutting power consumption, some also financially support on-site power generation such as solar panels and fuel cells. Some of the largest data centers (e.g., Amazon, Apple) get power from rooftop (or nearby ground-based) photovoltaic (PV) power plants. Google, eBay, and others are using fuel cells (which use natural gas to produce electricity) to power some of their data centers.
Why would a utility support customer-owned generation that seemingly competes with it? Because it recoups that lost generating revenue through “revenue decoupling mechanisms” overseen by public utility commissions. Doing so reduces emissions at utility power plants, balances overall load (avoiding the need to build new plants), and limits stress on transmission/distribution systems that data centers might otherwise cause. Both federal and state tax incentives may also be available to help bankroll such installations.
While not a direct utility incentive, some utilities offer time-of-use or real-time pricing rates that may yield cheaper (on average) power for industrial facilities like data centers. Their flat 24/7 loads consume most of their kWh during off-peak periods (which typically include weekday nights, all day on weekends, and maybe holidays) when wholesale power is cheapest. Utilities offer such rates to attract concentrated and continuous loads to their territories.
A recent development has been utility tariffs that allow large customers to access renewable power sources via “buy through” riders at prices lower than otherwise available. Google plans to use Duke Energy’s Green Source Rider in North Carolina to access 61 MW of nearby wind power presently under development. Switch (a company operating giant data centers in Nevada) struck a deal with NV Energy (Nevada’s largest utility) to deliver power from a 100 MW solar facility under a 20-year deal with First Solar Corp. Utilities in 10 states allow similar arrangements. For data centers seeking low-cost renewable energy, this option may be an attractive incentive.
Lindsay Audin, CEM, LEED AP, CEP, is president of EnergyWiz, an energy consulting firm based in Croton, N.Y. He is a contributing editor for Building Operating Management.
For More Information on Data Center Incentives
The U.S. Environmental Protection Agency’s Energy Star program offers a Data Center Utility Incentive Guide, an online document that reviews options for cutting power consumption, along with some potential savings and paybacks. Its reference section includes links to other sites offering guidance.
Find it at www.energystar.gov/ia/products/power_mgt/ES_Data_Center_Utility_Guide.pdf?0854-e0a3
To help IT executives understand the value of cutting energy use, Ted Brown, program manager for IT conservation at Seattle City Light, points to an online class for data center CFOs run by Jonathan Koomey, research fellow at the Steyer-Taylor Center for Energy Policy and Finance of Stanford University. Koomey created the class to help financial managers see energy use at data centers as a potential business opportunity, rather than just another operating expense.
His self-paced webinar (given twice a year), entitled “Modernizing Enterprise Data Centers for Fun and Profit,” may be accessed at www.heatspring.com/courses/modernizing-enterprise-data-centers-for-fun-and-profit. Among many other topics covered in the class is use of utility incentives.
A comprehensive list of energy-saving options for data centers (and free DOE software for benchmarking energy use for them) may be found at datacenters.lbl.gov/dcpro
That site also provides a useful presentation and guidance on pursuing such options.
— Lindsay Audin