Energy crisis

Securing a reliable and cost effective power supply for an organisation’s entire IT needs has become a serious challenge for many managers in the past two years.

But in recent months, these managers now face a further problem: how to meet stringent new energy targets set by environmental protocols, or even by their own executives, when IT systems are consuming growing amounts of power.

The answer: with great difficulty. Although many companies are adopting progressive strategies on energy use, their ability to control use of power by IT seems to be limited.

One example is HSBC, the international banking giant. In December 2004, in an effort to counteract the damage that the company is doing to the environment, it became the first bank to commit to becoming ‘carbon neutral’.

HSBC’s approach is three-pronged: to source power only from ‘green’ (renewable energy) suppliers; to offset the remaining emissions in a bid for ‘carbon neutrality’; and to manage and reduce emissions, with a target to cut carbon emissions by 5% by 2007.

The first two prongs are the easiest, since it is effectively a financial decision. HSBC sources all of its power in the UK, Luxembourg and Australia from green suppliers. This means for each kilowatt it takes from the national grid, it will feed a kilowatt back in from green sources. In the second prong HSBC invests in schemes, such as wind turbine projects, that can ‘neutralise’ its carbon emissions (other companies also buy carbon credits to offset their use of carbon).

But the third prong – reducing energy use – is the most difficult. HSBC has introduced a number of measures in an attempt to cut its consumption of energy. “Most of the savings will be achieved by the introduction of new efficient technologies during upgrades to the bank’s 700-strong property portfolio, and improvements to individual maintenance and management programmes,” says Nhan Chiem, manager of corporate communications at HSBC.

But what of the vast amount of energy that is used to fuel the bank’s IT systems? Chiem says that HSBC’s three data centres in the UK account for only 20% of the bank’s overall energy bill. That figure will seem very low to many – but, in any case, it is certain to increase. IT’s use of power is rising in all sectors, and in the heavily regulated and automated banking sector, demand for more storage and processing is growing strongly. As HSBC makes energy savings elsewhere, that percentage can only go up.

Chiem admitted that HSBC is looking at renewable energy technology for data centres – but that is still remote.

Another global company trying to control its carbon output is Swiss Re. In 2003, the reinsurance giant initiated a 10 year programme combining internal emissions reduction measures with an investment in the World Bank Community Development Carbon Fund (CDCF). The CDCF finances projects in the developing world in exchange for carbon trading credits.

At the time of implementation, Swiss Re estimated that the company emitted 47,000 tonnes of CO2 per annum with emissions being split between electricity (48%), combustion of heating fuels (13%) and business travel (43%). But to date, IT’s use of electricity has not been broken out.

Printing manufacturer Ricoh is another company seemingly taking environmental issues seriously. While Ricoh is now recognised as being carbon neutral, it is also unable to calculate separate figures for IT energy use, said a Ricoh spokesperson. Ricoh currently offsets over 730 tonnes of CO2 with forestry projects in Carrifran, Scotland and two Scottish Biomass projects.

However, some environmentalists argue that these carbon neutral schemes are missing the point. “In the long-term it is not a solution. It is ultimately about reducing energy consumption,” says Craig Bennett, head of the Corporate Accountability Campaign at Friends of the Earth.

He is equally wary about offsetting carbon emissions through forestation projects. “It is counter-productive to offset activities by planting trees,” he says. “Plantation is not of ecological value. We don’t know what is being planted, how long it will be there for, or its effect on the local community. These projects will only work as a carbon offset if you can guarantee that they will be there forever, which of course you cannot.”

But Bennett does praise HSBC for its sourcing its energy from green suppliers. “This only serves to highlight that it is perfectly possible. And it extends beyond banks and the FTSE 350. All companies that are using data centres should be doing the same.”

Avatar photo

Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

Related Topics