Data Centers: How Equinix Shrinks the Carbon in the Cloud

We are online and using the “Cloud” everywhere now. All that data we use is sorted, routed, and stored in data centers. These buildings are the brick-and-mortar to the cloud. If you use the internet, then a data center is likely somewhere nearby. Even with fiber optics, data still travels faster when it has less far to go. You’ll find major data center clusters wherever data use is heavy. Wall Street, Silicon Valley, and Hollywood are all obvious data hogs. So is the federal government and the defense industries so you’ll find many centers in Virginia too.

Data centers consume 100 to 200 times more energy more than similar sized buildings.⁴Power demands for computing and cooling alone are 2x higher than normal office uses.⁵ And that power is required 24 hours a day, 7 days a week because the internet never shuts off.  It is estimated the information technology sector consumes 7% of global electricity.⁶ Using so much global energy puts a spotlight on what types of energy is being used at technology companies and the data centers that house internet services across the globe.

In 2010, the advocacy organization Greenpeace began campaigning for technology companies to use more renewable energy. Their “Clicking Clean” program initially gave many tech firms low scores.⁷Leading brands like Google, Apple, Amazon, and Salesforce began switching to renewables. Equinix, a large data center REIT that has many of those tech firms as clients, determined they wanted to lead this revolution and joined the RE100, an alliance of companies committing to using 100% renewables.

Data centers use more energy than is practical to generate onsite. Installing solar panels on the roof won’t get you enough power. It’d be nice if Equinix (and everyone else) could simply opt to buy only renewable energy from their local utility. But depending on your location, you may not have that option. In the US, there are three primary grid systems – the Eastern Interconnection, the Western Interconnection and the Texas Interconnection. The energy you buy depends on the energy sources fed into these grids from utility electric generation in each region and in each state. For instance, coal-fired plants accounted for 25.4% of electricity generation in Texas, 3.8% in Virginia, and only 0.1% in California. Renewable energy sources made up 35% in California, 16.1% in Texas and 8.5% in Virginia.⁸

To source more renewable energy Equinix had to determine their energy goals and assess the local “energy mix” for all of their centers. Equinix has many multi-tenant data centers. Somewhat uniquely, they invoice each client an energy bill alongside the rent. This allows Equinix to more accurately assess energy needs and aggregate demand. The REIT then determines what the local utility provider can deliver in terms of renewables for each location. When the local utility doesn’t provide pathways to renewable energy sources, Equinix came up with an alternative.

In 2015, Equinix completed Wind Purchase Power Agreements (PPAs) with renewable energy firms NextEra Energy and Invenergy. A PPA is a contract between the buyer and seller of energy for a specific amount of energy at a specific price. By guaranteeing the purchase of 225 Megawatt-hour (MWh), Equinix enabled these providers to complete the build out of their wind farm projects in Oklahoma and Texas.⁹ This contract has contributed in bringing Equinix’s North American portfolio of data centers to use 100% renewable energy.

Interestingly, the energy from the wind power purchase agreement is generated in the middle of the country where the wind is, not where the data centers need it – this a virtual PPA. It’s inefficient to move electricity that far. This is where Renewable Energy Certificates (RECs – see box) come in to play. With the virtual PPA in place, Equinix is allocated RECs for all the energy it purchases from NextEra and Invenergy. The company applies these credits towards its overall energy use at its data centers across the US.

The RECs allow Equinix to signal to the market they are a buyer of green energy. Technically, the actual energy mix delivered to each data center may not be green due to the local grid. But by financing additional wind power to come online via the PPA, and accounting for this energy through RECs, Equinix is contributing to the demand for renewable energy and changing the way the cloud is powered.