The previous blog titled “How a Digital Partner like Locuz Can Strengthen your ESG Strategy” was an ESG overview and highlighted the importance of a digital partner like Locuz in your ESG journey. This blog will serve as an extension to the previous blog exploring proportionality between cost, energy use and emissions. This proportionality will inform why it is important to measure emissions generated through cloud use for Scope 3 emissions reporting.
Establishing Energy and Emissions Proportionality.
The relationship between energy use and carbon emissions may be complex, but it is clear that reducing non-renewable energy use will reduce environmental impact. Today, data models help estimate emissions generated through our energy use for we lack emissions data. We rely on models that track our energy use since it is a more reliable metric to estimate emissions.
However, what if energy data is not available? Or what if the source of energy is not available, to track carbon emissions through energy production? Corporations are tackling similar data problems across their value chain – the unavailability of relevant data to make accurate estimates. These organizations now rely on partners, and services that can produce carbon emission data using alternative methods.
For example, the cloud industry faces data problems in tracking energy use and carbon emissions. Cloud providers put out very limited information of their data center energy use, and much less tracking their energy and carbon of their customer’s usage. Read on to understand why we’re focused on energy use, emissions, and our outlook on the cloud industry.
Figure 1: Graphical Representation of energy and emissions invisibility of the Cloud Industry.
Do Computers Make Up 18% of your Electricity Bill?
18% of your electricity bill owing to your computer does sound like a lot! A reality for the country of Ireland though, for whom data centres (which are essentially large computers) consumed nearly 1/5th of all electricity. Ireland currently operates 75 data centres with 38 more, yet to come. The Irish Republic, as a result of new data centres, experienced a 400% energy demand rise since 2015.
While low corporate taxes and proximity to Europe made Ireland the ideal data centre destination. Cloud providers today need fewer external incentives to continue their journey powering the meteoric rise in new data centres. High demand for hyperscale data centres has put many nations on track to reflect growth and electricity consumption. Singapore; even reversing its ban on new data centres backed by the need for more capacity.
Data Centre Energy Use Problem
Today, data centres use about 1.3% of all electricity we produce. Advancements in hardware kept energy use from data centres in check, but a looming efficiency ceiling is a threat to increased energy use share.
Historically, new data centres did not increase energy use share as a result of continually improving efficiencies. New data centres would in fact reduce the proportion of energy use, but now, with limiting physical advancements; every new data centre will consume equally or perhaps more with growing demand for larger data centres – leading to a larger share of global energy use to power the cloud.
Figure 2: Graphical representation of historical vs current energy use of new data centers because of limiting hardware efficiencies.
How do conscious corporates track energy use and emissions impact of running on the cloud?
Pricing on the cloud reflects their largest operational costs, and in this case, energy costs to the provider. When purchasing cloud services, customers pay a premium equivalency of energy consumed through the provisioned hardware. Corporates that run on cloud therefore, can reduce their energy use, subsequent emissions, and cost with the right intent and methods of cost management.
An untethered data centre and digital services growth mean that cloud providers are continuing to make large investments in this space owing to profitable revenues. However, those revenues in aggregate include a significant portion of unnecessary spending from customers. On average, over 30% of customer cloud spend is wasted on unutilized resources.
Cloud is a boon to organizations that are willing to embrace it: promising on-the-go scalability, easy implementation, and unmatched agility. The hallmark of pay as you use digital infrastructure. However, despite such dynamic nature of cloud, customers tend to overspend on their cloud infrastructure due to insufficient monitoring, poor optimization strategies, and a lack of awareness among users about cost implications.
Reduce Overspend & Emissions with Locuz
As a business how do you ensure you meet operational objectives without overspending on cloud? In consideration of a wider-ranging perspective, how do you ensure business objectives are met in the themes of ESG to reduce impact of running on cloud?
Introducing GreenOps, the one-stop solution for a Net-Zero aligned reporting, planning, and management of your cloud infrastructure. Based on three inter-dependent themes; GreenOps will allow customers to conduct emissions reporting of their cloud, and using infrastructure data will allow them to identify, and work on inefficiencies across their cloud operations.
GreenOps uses a spend-based emissions estimation methodology aligned with the guidance set by the GHG Protocol - which equates spending on the basis of service, hardware, and utilization to estimate energy consumption. Eventually, location information and regional emission factors are used to calculate carbon emissions. The utilization data gathered for emission reporting informs Locuz of the architecture and inefficiencies of the cloud environment. This actionable data paired with tools, resources, and expertise available at Locuz, can help build and run a lean, and green cloud environment for our customers that align with larger business goals in the themes of ESG and Sustainability.
GreenOps is the embodiment of corporate Net-Zero alignment paired with ESG reporting. It helps track current emissions, aligns with Net-Zero policies and has the tooling to decarbonize your cloud environments. Essentially reducing risk of cost unpredictability an important factor of corporate ESG adoption – risk management.
Get in touch with us to explore how we can provide valuable assistance in effectively managing cloud emissions through the advanced features of GreenOps by Locuz.Nipun Majumdar November 15, 2023