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The Race For The Most Efficient Server Is Turning Tech Companies Into Power Companies

Uploading your music to the cloud isn’t as simple as you might think. As more data is stored online, the cloud takes more and more energy to maintain, forcing companies to get into the business of getting power as cheaply as possible.

1. The Cloud of Smog.

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The companies of the cloud–the so-called “information
factories” of Google, Facebook, Amazon, and Apple, among others–have
collectively achieved a scale of which old-school factories could only dream. The cloud is, however, quite dirty. It takes a lot of carbon to run all the servers that power it. And since more carbon means more money, these companies are doing everything possible to make their operations as efficient as possible.

Just as Henry Ford met
economies of scale with a level of vertical integration never seen before or
since–amassing railroads, mines, and even rubber plantations to supply his
factories–the cloud companies are coping with their billowing carbon
footprints with their own version of integration. They’re making advancements in data center design,
hardware, and even remaking the electrical grid itself.

Storing 1.2 zettabytes of information (that’s more than a
trillion gigabytes) requires the construction increasingly massive data
centers whose voracious appetite for power consumes 3 percent of U.S.
electricity, while personal devices comprise 15 percent of home electricity
use–a figure projected to triple by 2030, equivalent to the demand of the
American and Japanese home markets combined.

Much of this electricity comes from coal, the cheapest and dirtiest source
available. For example, Apple’s eagerly-awaited cloud music service will
most likely be housed at its new data center in Maiden, North Carolina,
which is expected to draw on an astounding 100 megawatts supplied by Duke
Energy, which generates 61 percent of its output from coal.

2: Make Servers More Efficient.

In 2010, shortly after Facebook announced plans in
2010 to build its first data center in Prineville, Oregon, Greenpeace singled out the social network
for shaming because the utility in Prineville uses coal power. Last month on the eve of
Earth Day, the advocacy organization expanded its
critique to the entire cloud
, arguing in a new report that “many IT
brands at the vanguard of this 21st century technological shift are
perpetuating our addiction to dirty energy technologies of the last two
centuries.”

But two weeks earlier, Facebook had taken the unusual step of publishing the
blueprints for its custom-built, super-efficient Prineville datacenter under
an open source license, labeling it the “Open Compute Project.” They were
the result of nearly two years of work and “tens of millions of
dollars
” to wring still-greater efficiency from its operations by integrating the design of its servers and its data centers.

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“You can make an average-joe server somewhat more efficient, but to build
the most efficient architecture, you have to take the two together,”
explains Tom Furlong, Facebook’s director of site operations.

Google–the fourth largest server manufacturer in the world, according to CIO Ben Fried–has reached a similar conclusion. It just published some
of the specs
for its integrated systems, “as we have hit the point where the
datacenter itself–the facility–is hitting the point of diminished
returns,” says Bill Weihl, Google’s clean energy czar.

3. Jevons Paradox.

But what if a new generation of hyper-efficient
datacenters only makes the problem worse, driving down the cost of operating
them, thus inspiring Facebook and Google to add new services (Google Music,
anyone?) which in turn causes more datacenters to propagate across the landscape?

This is Jevons Paradox, named for a 19th-century British economist who was
also obsessed with coal. In The Question of Coal, Jevons concluded “It
is wholly a confusion of ideas to suppose that the economical use of fuel is
equivalent to a diminished consumption. The very contrary is the truth.” The more efficient something is, the more we use of it, canceling out any savings from efficiency.

In other words, while online music services have obliterated much of the
need to manufacture, store, and truck CDs to stores (which have a carbon
footprint of their own), does it make much difference if digital storage
lockers from Amazon, Google and Apple cause millions of listeners to stash
their record collections in the cloud, requiring those hard drives to spin
in perpetuity? Does it matter how many trees are saved from being pulped if
coal-fired power plants are required to keep those Kindles charged?

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Even Google, the biggest of them all, has decided: no. “Our view
of the Jevons Paradox is this,” says Wiehl. “It’s incumbent on us to be as
efficient as we can. We’re much more efficient than we were a few years ago.
But from a climate point of view, we’re not going to use efficiency to get
to zero [emissions].”

4. The Google Electric Co.

Despite what it wants you to think, Google is no paragon of virtue. The Greenpeace report card gave it an “F” for transparency for willfully
obfuscating the true number of its datacenters, officially listing seven
when estimates range as high as 20 or 30. But it has moved aggressively in the
last month to procure clean energy straight from the source, the only path
(for now) to a zero-carbon footprint. In the span of a week last month,
Google invested $168 million in
BrightSource Energy’s forthcoming utility-scale solar thermal plant capable
of 392 MW. That was followed by an approximately $100
million investment in the Shepherd’s Flat Wind Farm near Arlington,
Ore., which upon completion in 2012 will be the world’s largest, producing
845 MW of electricity–enough to power 235,000 homes.

That’s on top of last year’s $38.8 million investment in
NextEra Energy Resources’ 169 MW wind projects in North Dakota, followed by
a 20-year fixed contract to purchase another 100
MW of wind power (which it reupped in April with a deal to buy yet another
100 MW from a NextEra wind farm in Oklahoma). Google’s interest in clean
energy dates back to 2008, when its philanthropic arm Google.org unveiled
RE<C,” i.e. renewable energy
cheaper than coal, an initiative to fund clean energy projects. The
following year, it formed Google Energy to buy and sell electricity at
wholesale rates. This, combined with Google’s dabbling in on-site generation
and its interest in the smart grid, suggests Google is beginning to
vertically integrate its electricity sources just as Henry Ford once locked
up his raw materials. In the process, will it create the template for the
smart, distributed 21st Century power company?

“We have an interest as a company in scalability,” says Google’s Bill Wiehl.
“We feel that we have a lot of money, and can invest some of it to do good
and make money ourselves.” Beyond that, he is quick to pour cold water on
the notion of Google being a utility or even “particularly vertically
integrated.” While he concedes that the “smart grid maybe does change that a
little bit,” he stresses that Google only has an interest in supplying smart
meters to consumers, not in operating the grid itself.

Chandrakant Patel, who is director of HP Labs’ Sustainable Ecosystems
Research Group at HP Labs,
suggests the idea of Google and other cloud companies leading the way when
it comes to renewable energy isn’t as far-fetched as it seems. The
combination of the hyper-efficient datacenter and a private micro-grid
composed of renewables will, in time, grow so large and so cheap compared to
fossil fuels that IT companies will begin to offer municipal services–the
“network-as-the-next-utility” vision HP, IBM and Cisco have been so hot
about.

The injection of Google’s money into the clean tech sector has had a more
immediate effect, however. Its backing no doubt helped convince BrightSource
Energy to file this month for a $250 million IPO, prompting one VC to speculate
that a “Google effect” could add a sheen to the entire sector. “I think it’s
going to be a hot one,” said Claremont Creek Ventures managing director Nat
Goldhaber told a reporter. “If it’s very successful, I think perhaps we
might get a little bit of a gold rush.”

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Note: Based on a corrected tweet by Google CIO Ben Fried, this story was updated to reflect that Google is the fourth largest server manufacturer in the world and not the third.

Read more from Fast Company’s series The Butterfly Effect: The Bin Laden Raid Could Transform Asia’s 21st Century Arms Race.

About the author

He is the author, with John D. Kasarda, of Aerotropolis: The Way We’ll Live Next, which examines how and where we choose to live in an interconnected world.

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