Benefits of Energy Rebates

In light of Sun's announcement with Pacific Gas and Electric Company (PG&E), Sun asked PG&E for its perspective on customer issues in the data center and the worldwide energy crunch. Mark Bramfitt is the targeted market supervisor for PG&E's high-tech, biotech, and healthcare industries. His responsibilities include developing and delivering PG&E's portfolio of energy, services and offerings to those market segments. Excerpts from the interview follow.

Q: What is PG&E's viewpoint regarding energy usage in the data center?

A: Customers are encountering many issues around managing their data centers given the critical business need to vastly increase their computing capability. Expanding those capabilities within an existing energy footprint is becoming increasingly difficult. In other words, these data centers are reaching their capacity in terms of cooling ability and the amount of power available without making huge investments. Customers are basically saying, "Help us increase our computing capability without building new data centers."

Q: Are there incentives for PG&E to reduce demand for power?

A: PG&E has a regulatory mandate to deliver a certain amount of energy efficiency. This helps improve service quality (i.e. fewer rolling blackouts). There is also an economic development benefit because if the utility can help fund energy-efficient equipment for customers and the customer's energy bill decreases, that customer is more likely to stay within PG&E's service area rather than move some place where the cost of electricity is cheaper.

The best way to manage all of this is to use cost-effective energy efficiency programs rather than develop expensive new sources of energy. If we can provide solutions to data center owners that avoid building new data centers and/or power plants, it's in everyone's best interest.

Q: How critical is the problem?

A: I would be prognosticating to some extent, but clearly we had a problem in California in 2001 with rolling blackouts. We don't want to get into that situation again, and to avoid that, we must deliver energy efficiency services at levels we've never had to do before. We are attempting to deliver three times the level of energy efficiency savings in California over the next three years than we have in previous years. I can't say that if we don't hit those goals we are going to have blackouts, but we don't want to revisit 2001, so these programs are critical.

Q: Do you have any indication as to what the rest of the world is facing? Is it the same everywhere?

A: It is crucial in many other places. We're hearing from our utility compatriots in New York City that they're having issues with data centers and energy in general. Certainly there are other places in the world where it's an issue. Basically, if you don't pay attention to your energy efficiency now, you will get to that problem later. If other areas of the world follow the leads of the utilities and states that are aggressively pursuing efficiency, they'll be better situated to avoid the inevitable.

Q: How does PG&E benefit by offering financial incentives to customers who purchase energy-efficient servers or computing equipment?

A: I know it's counter-intuitive to people who see us trying to sell less of our product. The easiest way to explain it is if I can buy a kilowatt-hour of energy efficiency (in other words, help a customer use one kilowatt-hour less than they otherwise would), that's cheaper than going out in the generation market to buy a kilowatt-hour. I'm joined at the hip with the folks at PG&E who are making long-term power purchase agreements. They're asking me if I can do it cheaper than they can. Our energy efficiency programs, including the incentive programs, do this.

Q: What are you finding from working with customers on energy efficiency?

A: Depending on the company, there are an awful lot of barriers to energy efficiency. Increasingly, we are seeing customers who aren't looking at it only from the financial perspective but who realize that energy efficiency and environmental stewardship are good things for their business.

In past years, we knocked our heads against the wall talking to customers about how to save money. Major corporations with a spare dollar have numerous choices about what to do with that dollar. They can buy another company, grow their company, buy their stock back, etc. Selling an energy efficiency project that saves them money was up against all of those things and often didn't win. Now environmental responsibility joins the picture, and different motivations are coming to play that I think are very positive.

Q: Are you optimistic?

A: I'm hugely optimistic. Our company is in the data center market because we are hoping to achieve a lot of energy savings. We're also helping customers with a problem — we want to be more than just a utility provider, we want to be a business partner.

We've been very successful in helping companies manage their data center's air-conditioning systems, but the gap in our portfolio is the equipment that's in the racks. We're very pleased to be working with the industry — the Suns and AMDs of the world — who are leading the way on equipment efficiency because we need a comprehensive portfolio. I tip my hat to AMD and Sun and some of the key players in the Green Grid, because it shows they are listening to the industry. We're all hearing the same story — customers need more computing power to fit in an existing footprint. If PG&E and Sun can help customers with that, we've got a winning deal on our hands.