Can Cloud Computing Reduce Carbon Emissions?

Studies indicate that cloud computing could play a significant role in reducing the use of energy on a global scale. Research by Pike Research, a clean technology market intelligence firm, claims the adoption of cloud computing could lead to a 38 percent reduction in energy usage in the world’s data centers by 2020. It estimates the growth of cloud computing will decrease energy consumption from the current rate of 201.8 terawatt hours to a 2020 rate of 139.8 TWh, resulting in a 28 percent reduction in greenhouse gas emissions in the next five years.

A study conducted by Accenture for Microsoft referenced in Data Center Efficiency, Renewable Energy  and Carbon Offset Investment Best Practices compared the environmental impacts of providing three of Microsoft’s business applications – Exchange, SharePoint and Dynamic CRM – through  customer data centers and Microsoft cloud data centers. The study found Microsoft cloud-based operations reduced carbon emissions by an average of:

• 90% or more for small operations (per ~100 users)
• 60% to 90% for medium-sized operations (per ~1,000 users)
• 30% to 60% for large operations (per ~10,000 users)

Currently, enterprises have little motivation – other than being good corporate citizens – to use green or clean energy. However, a growing number of government entities, including the State of California, the European Union Emissions Trading Scheme (EU ETS), New Zealand, Australia and others, are proposing heightened regulations of carbon emissions. Such regulations make it likely that the right to emit carbon into the atmosphere will be traded as a commodity in the near future.

At the simplest level, cloud data centers save energy because they achieve very high virtualization ratios, typically on newer, more efficient equipment. If an on-premise customer data center and a target cloud data center were sitting just adjacent to one another, comparing their power consumption and cooling characteristics might be a straightforward exercise. But this situation rarely exists.

Some research institutions (including Trinity College in Dublin, Ireland) have tried to apply simulation techniques to quantify the difference in power consumption at a macro level, but the outcomes have lacked significant meaning.  Though it may be safe to assume that carbon emissions from a cloud data center would be less than that of a typical enterprise data center, quantifying the difference in carbon emissions between the two is a big challenge. Here’s why:

• The fuel mix. Cloud-computing facilities and enterprise data centers consume a huge amount of power. A cloud-computing center consumes significantly more because it runs computing operations for many customers, and the carbon saved for each depends on the fuel mix for the customer’s data center. Power received from a coal-powered generation station certainly has a higher carbon emission than ones powered by oil or natural gas.
• The time of the day. The demand for electricity changes over the course of a day, and electricity suppliers regulate the flow of power to react to the change in demand. Consequently, the carbon emission of an electric supplier varies over time.
• The source of power. Most of cloud-computing facilities and enterprise data centers receive power from power grids. Power comes into a grid from multiple sources which generate electricity from among a combination of oil, coal, nuclear and natural gas-fired power plants. Their generation capacity may also be supplemented by solar and wind energy power sources. As such, it is difficult to determine carbon emissions over a period of time because the sources of power are constantly changing depending on a variety of factors, including demand.

Calculating how cloud computing can reduce carbon emissions remains an onerous task, but enterprises will see the need to do so rise rapidly on their priority lists as new regulations make it a decidedly more urgent matter.

ISG helps enterprises plan for and effectively source their cloud strategies to realize real benefits in service quality, cost containment and environmental impact. Contact me to discuss further.

About the author

Ravi helps clients develop and implement their cloud transformation strategies. He uses his deep commercial and operational background in cloud and utility computing to help clients create practical strategies to increase infrastructure agility and reduce operational costs. Ravi helps organizations better understand their current cloud spending, determine which applications are cloud-ready, compare cloud delivery models—including pricing across various public, private and hybrid clouds—and facilitate the rapid development of an overall cloud transformation roadmap. Recently, Ravi helped a large, diversified media company perform a study to compare the costs and benefits associated with in-house implementation of a major application with alternatives, including two major public cloud providers. He has also assessed and formulated the cloud strategy for a highly regulated financial organization and for major utilities in the U.S and Canada. He holds a Ph.D. in Engineering, an MBA in Finance and an Advanced Business Certification/Diploma in Healthcare Finance and Insurance.