When it comes to energy, Texas is both green guru and oil refiner king. The Lone Star State commands a distinctly diversified energy portfolio - earning the No. 1 spot as top wind power generator since 2006 - and is directing a massive, electricity-saving statewide data center project while still consuming more energy than any other state.
But with once-affordable natural gas prices ballooning and warnings of climate change growing more urgent, Texas' public and private sectors are wielding new ideas. Forward-thinking tech companies are forging government partnerships. And as new information on data center energy consumption becomes available, IT managers have the incentive and wherewithal to yield big energy savings.
While energy savings and environmental stewardship jump-start many green initiatives, Texas has an added reason to embrace the green craze - the state's energy costs have increased considerably in the last five years.
In the past, the Texas power grid - which powers more than three-fourths of the state - has let Texas retain some energy independence from federal regulators and offer natural gas at cheap rates. But market conditions since 2000 forced some power plants to close, decreasing the state's once-abundant energy supply and increasing prices.
"Where managing energy costs was not as high on the radar screen five years ago for many of these public entities, it's a very significant piece of their operating costs now," said Dub Taylor, director of the State Energy Conservation Office (SECO). "So now they're trying to figure out, â??What can we do about this?'"
The biggest opportunity to reduce costs lies not with renegotiating power rates, he said, but with modernizing aging facilities and dampening demand.
Greening Data Centers
The total power used by servers, cooling and corresponding infrastructure represented 1.2 percent of all U.S. electricity consumption in 2005, according to a report released in February by the Lawrence Berkeley National Laboratory (LBNL). That's equal to the power used by Mississippi, according to the report's author Jonathan Koomey, consulting professor at Stanford University, and a staff scientist at the LBNL.
In 2005, the U.S. spent $2.7 billion to power servers and associated infrastructure, while the entire world shelled out more than $7 billion.
The report raises awareness of the problem, Koomey said. "The whole industry needs to understand what the basic picture is, and the only way to do that is to have some sort of objective measure of the total consumption."
From 2000 to 2005, the electricity used by servers in the United States and worldwide doubled, according to the report. This can be largely attributed to the increased number of servers and related escalation of auxiliary electrical equipment.
IT managers can focus on improving IT equipment and/or infrastructure to make data centers more efficient, he said.
"Certainly with the server, you could improve the power supply; you could improve the DC [direct current]-to-DC conversion; you could improve the fans; you could improve the air flow; you could also improve the microprocessor," Koomey said, adding that tests now show server facilities powered with high-voltage DC, instead of both AC (alternating current) and DC, are more energy efficient.
Another problem is server capacity that's being far from maximized. "With most business applications, the servers are running at 5 percent or 10 percent of the IT load," he said. This valuable, but unused, server capital is luring more organizations toward server virtualization, which basically means segmenting a server to allow multiple virtual machines, with different operating systems, to function in the same physical machine, running not just one, but several applications simultaneously.
The data center issue is especially timely in Texas, where the state is consolidating its 30 state data center sites to two.
The Texas Department of Information Resources (DIR) awarded IBM the seven-year
contract in November 2006 to run the data centers. With all costs included, the project is projected to save Texas $159 million over seven years, according to the DIR's Web site.
"It's taking a very disaggregated situation and then optimizing it into a more manageable situation," Taylor said.
A Changing Industry
"Texas is taking a bold leap and is probably leading other states in putting together their consolidating of data centers ... which will mean huge energy savings," said Sue Snyder, vice president of international policy and relations and executive legal counsel for AMD. She pointed to a recent Gartner poll that predicts that in two years, one-half of all data centers worldwide will be short on energy supply.
Consequently companies can't afford to ignore the growing demand for green goods, said Andrew Fox, AMD's senior manager of corporate communications.
"If we ignored the energy efficiency aspect," Fox said, "our customers are going to look elsewhere for the products."
Eighty-three percent of high-tech professionals view energy as their No. 1 concern, Snyder said.
Last year, AMD - the Sunnyvale, Calif.-based chip maker - founded the Green Grid, a nonprofit group of IT companies and professionals, including Dell, HP, IBM, Intel, Sun and VMware. The Green Grid seeks to reduce the overall consumption of power in data centers and computing systems, and works to mold industry standards for green data centers. Such networks are popping up to partner industry heavyweights with governments to produce green policies and best practices.
In May, IBM unveiled "Project Big Green," which will dedicate $1 billion annually to increase energy efficiency in the IT realm. The plan includes IBM products and services to encourage the greening of private and public technology infrastructures, according to IBM. For an average 25,000-square-foot data center, clients will save a projected 42 percent off their electricity bill.
In late 2006, HP announced its own energy management system designed to reduce cooling costs in the data center by 20 percent to 45 percent.
SECO's Taylor said having big companies interested in green issues is indicative of change.
"When you have those types of companies with the types of investment capital and technical expertise they can bring to the equation jumping into the game, I think that's suggesting this is a growth industry," he said.
Federal actors are taking notice of the issue too. The Environmental Protection Agency intends to release an "Energy Star" certification for data centers.
"Having the Energy Star label helps additionally because it allows the government, for example, to specifically say, â??You know what? We're only buying Energy Star servers.' And that drives the market toward higher efficiency," Koomey said, adding that just mandating industry labeling would help guide efficiency. "Right now there's no way for a purchaser of a server to choose a more efficient server."
It's almost impossible for smaller operations to demand a more energy-efficient server fleet, Koomey said, but they can focus on the infrastructure side. Chillers, humidity and airflow are areas commonly ripe for improvement. And because infrastructure costs equal - and sometimes surpass - IT costs, infrastructure concerns are bound to become more significant, he said.
"A lot of the cost of these facilities is now the infrastructure," Koomey said. "Typically half or less of building a data center is the actual IT equipment, it's mostly the infrastructure. It's the building; it's the cooling system and the power - all that stuff. It adds up to a lot of money."
In Texas, this is especially true. Many urban buildings run air conditioning 10 months of the year, according to Taylor.
Closing the Gap
"What we've heard from a lot of cities and counties is the
facilities; people have had plans on the drawing board for years that they'd liked to implement to improve the energy efficiency of their facilities, but they couldn't really get traction at the decision-maker level," Taylor said.
When the Texas Legislature passed SB 5, the Texas Emissions Reduction Act, in 2001, it required Texas' 41 largest county governments to reduce electricity consumption by 5 percent between 2002 and 2007.
"That requirement was on the entity. So the mayor and county judge had to comply," Taylor said. "The first call they made was to their facilities managers saying, â??What can we do about this?' And they said, â??Hey, we've already got a plan.'"
And as building inefficiencies become more evident - especially as IT managers pursue hardware and software projects that double facility and infrastructure costs - the public and private sectors will be forced to scrutinize the energy factor, Koomey said. "The IT folks are buying equipment. But for every dollar they're spending on IT, they're committing the entire company to spending another dollar or two on infrastructure, so that's a recipe for, certainly, budget chaos."
But budget disarray can be used to catalyze action.
"[There's a] disconnect between the folks in the data centers who are actually buying the equipment and the people who are paying the electric bills - the facilities people," AMD's Fox said. "You are seeing that gap narrow, as it becomes a bigger issue and a bigger drain on the bottom line."
One thing's for certain, it'll take collaboration from all sectors to reap the most rewards.
"Really," Snyder said, "this is an issue that's going to take partnership among all of us to resolve."
Fortunately for public entities, Texas has the country's largest state-run building conservation program right in its backyard.
The Texas Loans to Save Taxes and Resources (LoanSTAR) program, initiated by SECO in 1988, went from demonstration project to full-fledged program in 1995. Since then, the program has grown, the loan period has lengthened and SECO has given more control to the agencies involved.
"The state wants to help Texas schools and local governments save valuable taxpayer dollars by using energy efficiently and reducing utility costs," said R.J. DeSilva, spokesperson for the Texas Comptroller. "Projects funded through LoanSTAR have a significant environmental impact."
LoanSTAR uses its one-time $100 million capitalization from oil overcharge funds to offer loans to public entities - like higher-education institutions, school districts, county hospitals and local governments. The agencies are offered up to $5 million over 10 years to pursue energy-efficient building projects, and the loan fund is then refueled as agencies pay back borrowed loans.
The idea is that everyone gets ahead (the energy savings pay for, and sometimes exceed, the original costs of the building retrofits); old facilities get facelifts; and the state on the whole saves some serious money and power. Since its inception, LoanSTAR has saved Texas an estimated $199 million and prevented the release of 2.1 million tons of carbon dioxide into the atmosphere, according to the SECO Web site. As of April 2006, 187 loans had been distributed to 17 state agencies, 46 colleges or universities, 36 local governments, 78 school districts and 10 county hospitals.
"As taxpayer-supported entities, they're therefore sensitive about managing their bottom-line costs," said SECO's Taylor. "And if they can manage the energy piece of their overall operating cost pie in a cost-effective way and as a co-benefit address some of their facility comfort needs, then that's really a win-win."
The loans finance projects like: improving heat ventilation and air conditioning systems; replacing traditional tiled lighting with fluorescent lights; and instituting water conservation measures, among others.
What retrofits reap the most financial payback depends on the timeline. For less cost and quick payback, a lighting retrofit fits
the bill, but for more upfront cost and best payback over a long period (10-15 years), heating ventilation and/or air conditioning projects work well. Typically SECO recommends a combination of projects so the payback period averages seven to eight years.
SECO offers tailored, technical assistance for local governments that fall under SB 5. If qualified, the agency chooses the vendor and SECO scrutinizes the design and build phases. After the project's completion, SECO does not monitor energy savings, but agencies can choose to track them for internal validation purposes.
Because the initial project estimates are often conservative, most agencies end up saving more than they planned, Taylor said.
"Normally what you see is once this equipment gets installed, then there's an additional opportunity for the public entity to optimize it even more," he said.
In the past three years, the popularity of LoanSTAR has increased - right now there's a six- to nine-month waiting period.
"We're essentially oversubscribed. There's more demand than there are funds," Taylor said. He chalks up the hike in appeal to higher energy costs, among other things.
Although there is potential, he said, for grants to inject more money into the loan stream, there are also alternatives. Instead of utilizing LoanSTAR, he said, public entities can launch design-build projects through taxes or municipal bonds.
What's important, Taylor said, is that agencies use the loans to address many needs so they can make a big impact with one go-round.
"Historically when they have some extra money, they make sort of piecemeal investments to their facilities, and that has not really worked very well," he said. "The better approach is to really step back and ask: â??What are the needs here?'"