Building the Business Case for Energy Efficiency in Your Data Center

Misaligned Interests (Facility Manager)

While others in an organization may spearhead data center energy efficiency efforts, Facility Managers are likely the project champion for energy efficiency measures. This means they must often align stakeholder interests with a data center energy efficiency project as well as facilitate discussion and collaboration. Facility managers often have the strongest interest in energy efficiency projects (as they typically pay the energy bill), and the misaligned interests innate to an organization (e.g. IT managers most concerned with reliability and capacity, CFOs most concerned with cost) can mean that significant time and effort is required to successfully push a project through. Facility Managers will likely need to align the interests of the IT Manager and CIO in order to implement a project. Increasingly, effective asset utilization joins the interests of both IT and Facility Managers. Through joint efforts and increased information sharing, IT and Facility Managers can find common ground.

Lack of awareness of energy usage, costs, and opportunities (Facility Manager)

While Facility Managers are most likely to be aware of a data center’s energy cost, they may not be aware of opportunities to reduce these costs. Many Facility Managers are resource constrained, particularly in organizations with small or medium sized data centers. Therefore, Facility Managers may not have the opportunity to learn about energy reduction measures and subsequent monetary benefits for data centers, including those that may be considered “low hanging fruit.”

No one person is tasked with energy efficiency (Facility Manager)

Projects are more likely to fall through the cracks (or not be initiated at all) if no one person in an organization is tasked with energy efficiency improvements. Even though implementing energy efficiency improvements is typically not part of a Facility Manager’s job description, they may take on the burden of guiding a project through internal stakeholder consensus while balancing their other roles and responsibilities within an organization. Dedicating significant time and resources can be a challenge.

Reduce operating costs (Facility Manager)

One study found that the majority (almost 80 percent) of data center energy bills are housed in the facilities budget. Thus, Facility Managers have an innate incentive to pursue energy efficiency measures that will lower energy costs.

Free up data center capacity (Facility Manager)

Freeing up capacity entails allowing more space, power, and cooling capacity to be available, all of which are a core concern and responsibility of a data center Facility Manager. Freeing up capacity allows a Facility Manager to more easily respond to needs from the IT Manager or CIO for increased computing abilities.

Comply with codes and standards and/or organizational policies (Facility Manager)

Facility Managers are often tasked with ensuring compliance for State and Federal codes and standards for new data centers as well as data center expansions or retrofits. Thus, energy efficiency measures that aid with compliance are inherently of interest.

Address aging infrastructure in need of upgrade (Facility Manager)

Given that a Facility Manager is typically responsible for maintaining a data center’s building and infrastructure, aging equipment that is near the end presents a unique opportunity to upgrade to newer, more energy efficient equipment or infrastructure (e.g. air management systems).

Leverage utility & other incentives (Facility Manager)

While capital expenditures for IT equipment most often come from the CIO/IT Manager’s budget, certain measures relative to data center infrastructure (like more efficient cooling or power distribution equipment) typically are housed in the Facilities budget. For this reason, utility or other financial incentives (e.g. rebates) for such improvements could drive a Facility Manager to undertake improvements.

No one person is tasked with energy efficiency (Facility Manager)

Projects are more likely to fall through the cracks (or not be initiated at all) if no one person in an organization is tasked with energy efficiency improvements. Even though implementing energy efficiency improvements is typically not part of a Facility Manager’s job description, they may take on the burden of guiding a project through internal stakeholder consensus while balancing their other roles and responsibilities within an organization. Dedicating significant time and resources can be a challenge.

CoE DCOI Fact Sheet

In June 2019, The Office of Management & Budget (OMB) released updated guidance on the Data Center Optimization Initiative (DCOI). OMB Memorandum M-19-19 rescinds and replaces OMB Memorandum M-16-19. OMB is focused on targeting improvements in key areas where agencies can make meaningful improvements and achieve further cost savings through optimization and closures. This fact sheet summarizes DCOI practices as they relate to energy efficiency. Please reference the full OMB Memorandum for complete guidance (https://datacenters.cio.gov/policy/)

Small Data Centers, Big Energy Savings

The purpose of this brief guide is to present opportunities for small data center owners and operators that generally make sense and do not need expensive assessment and analysis to justify. Recommendations presented in this report range from very simple measures that require no capital investment and little ongoing effort to those that do need some upfront funds and time to implement. The range of opportunities includes IT equipment, power, and cooling. This guide also notes the value of training for personnel involved in data center operations and management. References are also provided for further information. Author(s): Steve Greenberg, Magnus Herrlin

DC Pro User's Manual

User's manual for the Data Center Profiler (DC Pro) Tool, V4. DC Pro estimates a data center’s current and potential Power Usage Effectiveness (PUE) and energy use distribution. It also provides a tailored list of recommended tasks for improvement. Results can be exported as stand-­‐alone reports or for inclusion in other reporting material. The tool was reviewed by data center owners, design professionals, and product manufacturers. 

DCEP Program Description

The purpose of this program description is to provide information about the US Department of Energy’s (DOE) DCEP certificate training program; the target audience is those interested in participating in the Program. 

Data Center Master List of Energy Efficiency Actions

Comprehensive list of recommended efficiency actions for data centers. This living encyclopedia of measures also feeds into our Data Center Profiler (DC Pro) tool to provide tailored recommendations for improvements in data center energy management.

Department of Energy(DOE) Energy Assessment Process Manual

The process manual provides administrative step-by-step instructions for conducting an energy assessment (before, during, and after the assessment). The manual is specifically designed for the DCEP training program, but it can be used by any qualified assessor conducting an energy assessment.

Best Practices for Modernizing Vintage Data Centers

This white paper discusses the benefits and challenges of upgrading the data center’s  infrastructure components and outlines best practices for successfully planning, implementing and testing those renovations. This paper also touches on bridging the IT-Facilities divide.

Total Cost of Ownership (TCO) Model for Data Centers

Data centers are mission-critical components of all large enterprises and frequently cost hundreds of  millions of  dollars to build, yet few high-level executives understand the true cost of  building and operating such facilities. Costs are typically spread across the IT, networking, and facilities/corporate real-estate departments, which makes management of  these costs and assessment of  alternatives difficult. This paper presents a simple approach to enable C-suite executives to assess the true total costs of  building, owning, and operating their data center physical facilities.

Data Center Energy Efficiency Investments: Qualitative Evidence from Focus Groups and Interviews

This study explores potential barriers to energy-efficiency investments in data centers through focus groups and interviews with data center managers, including split incentives, uncertainty about new technologies, and more.

Small Data Center Webpage

Resource constrained data centers face unique challenges in their energy efficiency journey. The CoE's Small Data Center webpage recommends resources for small data centers that provide information on readily deployable, low cost, high-win strategies that can deliver robust energy savings.

Misaligned Interests (IT Manager/CIO)

CIOs and IT Managers within an organization are likely to prioritize IT stability, security, and flexibility. If capital expenditures for new equipment (e.g. new servers) are drawn from their budget, CIOs and IT Managers may place more weight on first costs than anticipated equipment operating costs when making purchasing decisions. CIOs and IT Managers may see energy efficiency measures at odds with their primary goals and can be resistant to change. For this reason, it’s critical that a project champion emphasize how an IT Manager’s and CIO’s interests are advanced by energy efficiency measures, including freeing up capacity (which can delay costly expansion projects), increasing data center reliability and resiliency, and reducing operating costs (if data center energy expenditures are housed in the IT budget).

Mission critical and risk averse nature of a data center (IT Manager/CIO)

An IT Manager and CIO’s goals are first and foremost to ensure the smooth running and availability of their data center. Data centers support critical services in organizations, with interruptions in service being very costly (both financially and from a reputation standpoint). As a result, IT Managers and CIOs have a low risk tolerance for new projects that may initially appear at odds with these goals. This risk aversion can influence energy efficiency projects in different ways. For example, an IT Manager might be hesitant to decommission unused servers in fear that it may interfere with a business function that may occasionally run on those servers.1 If an IT Manager or CIO perceives that an energy efficiency project could jeopardize data center operations, they may oppose a project or energy efficiency measure. However, energy efficiency improvements often are accompanied by improved data center reliability and resiliency. It may be the job of the project champion to clearly communicate this to a CIO or IT manager and find opportunities to mitigate perceived risk for a project.

Lack of awareness of current energy usage and opportunities (IT Manager/CIO)

Energy usage (and its costs) are typically outside the IT Manager’s and CIO’s purview. Thus, IT Managers and CIOs may not be aware of how energy efficiency can advance their interests- including illuminating opportunities through metering and monitoring, effectively increasing capacity, or reducing IT management complexity. Project champions are challenged with the task of successfully articulating the benefits opportunities provide, as well as designing projects that mitigate risk as it is perceived by an IT Manager/CIO.

Reduce operating costs (IT Manager/CIO)

While data center energy costs are most often housed in a facilities budget, IT Managers & CIOs can also be responsible for these costs. One study found that approximately 20 percent of data center energy bills are housed within the IT/CIO budget. However, as organizations realize that additional energy saving opportunities rest with IT, there has been a slight shift towards moving them to the IT/CIO budget. As Facility Managers exhaust infrastructure energy efficiency opportunities, they increasingly turn to IT opportunities. As a result, IT and Facility Managers may find themselves working in closer coordination than they did previously on matters related to data center capacity and energy management

Free up data center capacity (IT Manager/CIO)

Energy efficiency actions can effectively increase a data center’s floor space and capacity, and can also reduce the complexity of a data center. Freeing up capacity allows for possible delayed data center expansion and purchasing of additional equipment, which often comes out of the CIO/IT Manager budget. An estimated 20 to 30 percent of physical servers are considered comatose (meaning they haven’t seen any activity in the past six months). Metering and monitoring efforts can uncover unused servers and allow for recommissioning. Monitoring UPS capacity and power demand can allow IT Managers/CIOs to reclaim stranded power.

Increase data center reliability & resiliency (IT Manager/CIO)

Reliability is a core concern for IT Managers and CIOs. There is a misconception that these goals can be at odds with energy efficiency, but energy efficiency can work synergistically to advance both reliability and resiliency. Well informed IT Managers or CIOs may already understand how certain energy efficiency improvements (including DCIM systems as well as improved air management systems can enhance a data center’s ability to operate under compromised conditions). Further, technologies such as demand response, renewable integration, and microgrids can simultaneously enhance a data center’s sustainability, reliability, and resiliency, and even provide a revenue stream for an organization.

Address aging facility and IT Infrastructure (IT Manager/CIO)

IT Managers and CIOs are typically responsible for IT equipment purchases. When data center equipment has reached (or is close to reaching) the end of their useful life, IT Managers and CIOs have an opportunity to upgrade to newer, more energy efficient equipment. IT Managers and CIOs may also be motivated to retire equipment early, given the improved security and expanded opportunities for virtualization that newer equipment bring.

Comply with codes and standards and/or organizational policies (IT Manager/CIO)

Given that IT Managers are often involved in (or tasked with) data center equipment purchase decisions, they may be driven to purchase equipment that ensures compliance with relevant codes and standards related to energy efficiency (e.g. ENERGY STAR).

ENERGY STAR Data Center web page

ENERGY STAR page that includes links to purchase ENERGY STAR certified enterprise servers, storage, UPSs, and network equipment.

DCEP Training

Total Cost of Ownership (TCO) Model for Data Centers

Data centers are mission-critical components of all large enterprises and frequently cost hundreds of  millions of  dollars to build, yet few high-level executives understand the true cost of  building and operating such facilities. Costs are typically spread across the IT, networking, and facilities/corporate real-estate departments, which makes management of  these costs and assessment of  alternatives difficult. This paper presents a simple approach to enable C-suite executives to assess the true total costs of  building, owning, and operating their data center physical facilities.

EPEAT Registry

The EPEAT Registry contains a searchable database of certified data center equipment available for purchase. Visitors can also use the EPEAT benefits calculator to measure and report the environmental benefits gained from purchasing electronic products covered by the EPEAT ecolabel. 

Misaligned Interests (CEO)

CEOs have many interests across their organization; however they are most generally concerned with running it as efficiently and effectively as possible. Though there are many, their top concerns may include financial and operational management, communications, innovation, and managing reputation. In most instances, a CEO will not be familiar with the benefits of improved energy efficiency in their data centers or how it could advance their primary objectives. It’s important for a project champion to understand how to pique the CEO’s interest for a data center energy efficiency project. For example, what concerns do CEOs have that could be addressed by an energy efficiency project? CEO concerns could include improved resiliency, reductions in downtime, lower operating costs, delayed expansion projects, or projecting an image of sustainability and corporate citizenship, to name a few. All these benefits can be points of leverage. It is up to the project champion to connect the dots for a CEO and craft a message that clearly articulates how their interests are advanced by a project. This also means using terms that resonates with CEOs and understanding what metrics are used to gauge success at the executive level (e.g., do not present payback estimates if ROI is used more commonly to assess a project’s potential).

Opportunity Cost of Capital (CEO)

CEOs perpetually balance needs and requests from different business units within an organization. One of their main concerns is prudent fiscal management. CEOs may be bombarded with requests and initiatives from different stakeholders and consistently must prioritize the allocation of resources (spending, staff time, etc.) while making sure an organization achieves its core business objectives. It may require a concerted effort to articulate why data center energy efficiency measures warrant their attention, and build the case for how they can improve an organization’s performance and service offerings when competing for funds, attention, or staff time.

No one person within an organization is tasked with energy efficiency (CEO)

In many organizations, data center energy efficiency improvement is not explicitly in any one person’s job description. Given the complex nature of data center energy efficiency improvements and diverse stakeholder interests, organizational leadership may need to actively identify a point person to take charge if they wish to reap the benefits of data center energy efficiency. While this project leader (or project champion) is most likely to be the Sustainability Manager or Facility Manager, the CEO could task others in the organization with this responsibility.

Save energy in accordance with organizational values (CEO)

Organizations that have green-ness or energy efficiency as an organization value, may have a particular interest in pursuing energy efficiency in data centers. CEOs may have a range of underlying motivators to pursue, promote, and advertise energy efficiency efforts, whether it be demonstrating corporate social responsibility, for marketing purposes, or differentiating themselves from competitors.

Comply with organizational policies and/or codes and standards (CEO)

Identifying energy efficiency projects that follow organizational policies or Federal and state codes and standards may help capture a CEO’s attention and prioritizing the project.

Improve data center reliability & resiliency (CEO)

CEOs are likely aware that data centers can be mission critical to their organization’s operations or service offerings. Downtime is not only expensive, but it also can negatively impact the core mission, products, or service offerings of an organization. At a minimum, it can lead to day-to-day disruptions for employees. For this reason, CEOs may be more receptive to energy efficiency measures when framed in terms of the added reliability and resiliency benefits, they provide.

Total Cost of Ownership (TCO) Model for Data Centers

Data centers are mission-critical components of all large enterprises and frequently cost hundreds of  millions of  dollars to build, yet few high-level executives understand the true cost of  building and operating such facilities. Costs are typically spread across the IT, networking, and facilities/corporate real-estate departments, which makes management of  these costs and assessment of  alternatives difficult. This paper presents a simple approach to enable C-suite executives to assess the true total costs of  building, owning, and operating their data center physical facilities.

A Holistic Approach to Reducing Cost and Resource Consumption

This article from the Uptime Institute, A Holistic Approach to Reducing Cost and Resource Consumption highlights the importance of executive buy-in and commitment when implementing data center energy efficiency.

ISO 50001 Certification

Designed to support organizations in all sectors, ISO 50001 provides a practical way to improve energy use, through the development of an energy management system (EnMS). ISO 50001 provides a framework of requirements for organizations to: Develop a policy for more efficient use of energy,  fix targets and objectives to meet the policy, use data to better understand and make decisions about energy use, measure the results, review how well the policy works, and continually improve energy management.

The ISO 50001 Ready Navigator provides an actionable framework through which stakeholders can plan, build, and implement their data center energy efficiency improvements. 

Opportunity cost of capital (CFO)

CFOs are constantly having to prioritize which investments are most aligned with an organization’s strategic objectives. For this reason, they may need to be presented with information that differentiates why upgrades in data center energy efficiency could “beat out” competing requests. Additionally, CFOs may be inclined to focus on lowest upfront capital costs when investing in improvements. Project champions must clearly communicate the comparably favorable life-cycle costs for more energy efficient data center equipment.

Misaligned interests (CFOs)

CFOs generally have cost containment objectives and may tend to prioritize lowest first cost, particularly for shorter term reporting periods. For example, if a proposed ECM requires a large capital investment with a payback of five years, and their performance is judged on reductions in capital expenditures year over year, then there may be a perverse incentive to prioritize short term wins over long term gains. Project champions should emphasize the vast cost savings potential associated with data centers given their energy intensity. Additionally, increasing project visibility across other executive-level stakeholders could facilitate a common understanding of its benefits and help engender support and a willingness to proceed.

Lack of awareness of current energy usage & opportunities (CFOs)

CFOs may be unaware of the potential operating savings and other benefits that accompany energy efficiency projects. The Uptime Institute’s 2016 Data Center Industry Survey reported that Finance was the number one business function consistently absent from major IT infrastructure decisions. In particular, they may be unaware that data centers consume drastically more energy than other office spaces, (depending on how that information is reported to them), or the “low hanging fruit” that can significantly reduce operating costs.

Reduce operating costs (CFO)

Given CFOs are tasked with financial management, reducing operating costs (and ultimately their organization’s OpEx) is an incentive in its own right. Given their background and understanding in finance, CEOs may be receptive to energy efficiency opportunities that reduce operating costs, particularly when the payback is low and/or more certain (e.g. well-proven ECMs).

Leverage utility & other incentives (CFO)

Incentives provided by utilities and other entities (e.g. at State or Federal level), or alternative financing opportunities (e.g. ESPCs) can be leveraged to win CFO approval of an energy efficiency project. Incentives that partially (or entirely) sponsor a data center energy efficiency project offset the capital investment required for a project.

Free up data center capacity (CFO)

Expanding and building new data centers is very costly. While an organization’s CFO may not have data center capacity as a top of mind concern, an effective increase of capacity can delay or eliminate the need to build or expand. This benefit could be leveraged to attain CFO approval.

Database of State Incentives for Renewables & Efficiency (DSIRE)

The Database of State Incentives for Renewables & Efficiency (DSIRE) houses information on the financial incentives available for efficient data center equipment. The DSIRE database can be searched or filtered to access the relevant information. To see the list of programs with a data center offering, click the Programs tab from the main header then Apply Filter. Filter by Technology>Energy Efficiency>Other>Data Center Equipment. 

Total Cost of Ownership (TCO) Model for Data Centers

Data centers are mission-critical components of all large enterprises and frequently cost hundreds of  millions of  dollars to build, yet few high-level executives understand the true cost of  building and operating such facilities. Costs are typically spread across the IT, networking, and facilities/corporate real-estate departments, which makes management of  these costs and assessment of  alternatives difficult. This paper presents a simple approach to enable C-suite executives to assess the true total costs of  building, owning, and operating their data center physical facilities.

Why your CFO needs to meet your IT department

Article on the benefits of involving CFOs in IT decisions.

Discovering hidden costs in your data center - a CFO perspective

IBM report on what efforts forward-thinking CFOs are doing to properly account for energy costs and more efficiently manage their data centers. CFOs can have significant impact on energy management behavior within their organizations, particularly with respect to data centers. 

Opportunities for ESPCs in Data Centers

This webinar, held by the CoE in May 2020, reviewed how energy savings performance contracts (or ESPCs) could be leveraged as a financing mechanism to reduce the barriers for energy efficiency in data centters. This webinar covers successful data center ESPC examples, helps data center owners and operators understand why data center efficiency improvements are well-suited for inclusion in ESPCs, reviews relevant resources for ESPCs, and more.

Misaligned interests (Sustainability Manager)

While efficiency improvements in data centers are highly relevant to a Sustainability Manager’s goals, there may be factors other than energy savings potential (e.g. competing office priorities or reporting requirements) that influence which projects are undertaken. Sustainability Managers may be interested in opportunities that are less time or capital intensive, are more highly visible within an organization, are simpler to meter and report, and/or that engage employees more.

Lack of awareness of energy usage, costs, and opportunities (Sustainability Manager)

Sustainability managers may not be aware of the potential that lies within their organization’s data center. This could be a ramification of lack of visibility and proximity, or perhaps a history or preference within the organization to tap other opportunities as part of a sustainability plan. They are likely unaware that data centers can consume up to 50 times more energy per square foot than typical office space, and in some cases are responsible for up to 40 percent of an organization’s footprint. The Uptime Institute’s 2016 Data Center Industry Survey reported that Sustainability was one of the top three business functions consistently absent from major IT infrastructure decisions.v Understanding how a Sustainability Manager prioritizes and funds projects, as well as how their success is gauged, is critical. Project champions (assuming they’re not the Sustainability Manager), should seek to leverage the vast potential of data center energy efficiency measures and pursue projects that may have additional sustainability benefits such as reduced waste, increased recycling, water consumption savings, etc.

No one person within an organization is tasked with energy efficiency (Sustainability Manager)

In many organizations, data center energy efficiency improvement are not explicitly in any one person’s job description. Despite this, a Sustainability Manager is one of the most likely stakeholders to either undertake these projects independently or be assigned to it by organizational leadership.

Save energy in accordance with organizational values (Sustainability Manager)

Sustainability managers are, among other things, typically tasked with reducing an organization’s environmental footprint. This manifests through different business units and areas within an organization, data centers included. Data centers consume ten to 100 times more energy per square foot than a typically office building and can represent up to 40 percent of an organization’s carbon footprint. Since data centers may represent the single biggest energy consuming component of an organization, including data centers as part of an energy efficiency portfolio can easily align with a Sustainability Manager’s goal.

Comply with organizational policies and/or codes and standards (Sustainability Manager)

Sustainability Managers may have helped craft (and/or are tasked with enforcing) an organization’s energy or sustainability policies. A Sustainability Manager’s job may also entail overseeing the implementation and enforcement of codes and standards from outside entities, whether this be the Data Center Optimization Initiative (DCOI) for Federal Agencies or voluntary standards, such as ISO 50001.

Leverage utility & other incentives (Sustainability Manager)

Due to the fact that sustainability managers may be balancing spending priorities, participation in utility and other incentive programs may make data center energy efficiency measures more attractive for a Sustainability Manager to undertake. Aside from reducing costs, an innovative partnership with a local utility, for example, could be a more highly visible and marketable opportunity

ISO 50001 FAQs

FAQs on the practical implementation and benefits associated with ISO 50001 certification. 

Misaligned interests (Procurement & Contracting Personnel)

Misaligned Interests: Procurement and contracting personnel likely have their own set of criteria for purchasing IT and other data center equipment, and have an incentive to follow internally set procedures and policies. They may place greater weight on product performance or other specifications, or lowest first cost, without consideration of energy efficiency or lifetime operating costs. Ensuring that procurement includes energy efficiency as a criteria when making purchasing decisions, and that assessments of cost effectiveness considers payback or TCO is important for making purchasing decisions that advance energy efficiency.

Comply with codes and standards and/or organizational policies (Procurement & Contracting Personnel)

Given that IT Managers are often involved in (or tasked with) data center equipment purchase decisions, they may be driven to pursue energy efficient projects that incorporate purchasing equipment that ensures compliance with relevant codes and standards (e.g. ENERGY STAR).

Total Cost of Ownership (TCO) Model for Data Centers

Data centers are mission-critical components of all large enterprises and frequently cost hundreds of  millions of  dollars to build, yet few high-level executives understand the true cost of  building and operating such facilities. Costs are typically spread across the IT, networking, and facilities/corporate real-estate departments, which makes management of  these costs and assessment of  alternatives difficult. This paper presents a simple approach to enable C-suite executives to assess the true total costs of  building, owning, and operating their data center physical facilities.

Contracting for Efficiency: A Best Practices Guide for Energy-Efficient Product Procurement

Contracting for Efficiency: A Best Practices Guide for Energy-Efficient Product Procurement, provides guidance to agencies with regard to federal sustainable acquisition requirements related to energy and water consumption.

Green Procurement Compilation Tool

This green procurement compilation tool helps federal agencies identify green data center equipment and products, as well as which legal requirements and guidance apply with respect to procurement. 

Case Study: Sandia National Laboratories' Holistic Data Center Design Integrates Energy and Water Efficiency, Flexibility and Resilience

This NREL case study highlights Sandia National Laboratories and their holistic data center approach, which provides resilient energy- and water-efficient cooling for high-performance computing systems. Sandia’s optimized data center design and operation first ensure that computing needs are met. Sandia’s data center achieves this by focusing on
a system of heat rejection to ensure that the data center is running both efficiently and effectively.