In April, Digital Realty signed up to the Science Based targets initiative. Science-based targets provide companies with a clearly defined pathway to future-proof growth by specifying how much and how quickly they need to reduce their greenhouse gas emissions (GHG).
The Paris Agreement in 2015 saw 195 of the world’s governments commit to prevent dangerous climate change by limiting global warming to well below 2°C. This signalled an acceleration in the transition to a low carbon economy. Many companies are already demonstrating they have the skills, expertise, and ingenuity to make this a reality but need ambitious emissions reduction targets that ensure the transformational action they take is aligned with current climate science.
Targets adopted by companies to reduce greenhouse gas (GHG) emissions are considered science-base” if they are in line with what the latest climate science says is necessary to meet the goals of the Paris Agreement.
“In terms of the Science Based Target initiative and setting a science-based target there has been a lot of work and discussion internally for quite a while regarding how the business looks and setting a target,” Aaron Binkley, senior director of sustainability programmes at Digital Realty, says. “Going back several years we have committed to secure more renewable energy to power our data centres and that continues.”
A recent example of the drive to renewable energy came in April when Digital Realty signed a new 7.5 year power and renewable energy credit agreement with Citi to supply wind energy for its portfolio of data centres in the Dallas, Texas region. The transaction provides Digital Realty with over 260,000 MW/hrs of renewable energy annually from the 162 MW project.
Based on prevailing science
Binkley explains that what drew Digital Realty to join the initiative was that it was based on prevailing science, not just what is convenient or what is easy to get corporate buy in on. “The consensus view is around what we need to be doing in our little slice of the world to act,” he continues. “The other thing that we liked about it is that it is a comprehensive view of an organisation’s footprint, more than simply renewable electricity or an energy efficiency target. This looks at all our energy sources, our construction activity, our development pipeline, our supply chain and our office and corporate footprint.
“It is really taking a holistic view of what we can do to impact the carbon footprint of our business as we move forward. We are looking at setting in 2030 targets, so we have the best part of a decade to work toward holistic reductions across a range of different avenues across the business. It is a high-level framework and there is some flexibility within that framework to do different things in different areas to achieve the target.
“We think of it as a performance specification that stipulates the outcome and gives you flexibility on how to get there. But what I think is helpful is to think of it as a way for us to then go deep on these different specific actionable areas, whether it is energy procurement, or design and construction of new data centres. We can look at those specifically and put pen to paper and ask, ‘what is the state of the market?’, ‘where can we be doing more?’, and then acting within those specific subject matter areas to make a difference and improve emissions.”
This holistic approach means that a lot of focus is now on embedded carbon rather than simply operational outputs. For data centres, a significant portion of the carbon footprint is in steel and concrete. “That can make a difference when we are looking at the carbon intensity and the embodied carbon of concrete in particular and specifically the cement and concrete,” Binkley continues. “In certain markets we are incorporating fly ash and other admixtures to try to reduce the amount of cement in the mix. And we are looking more broadly at what suppliers are available and what products they are offering, whether there is a way to source a lower carbon concrete, from the same suppliers with a similar performance.”
Does size matter?
When it comes to adding renewable energy sources to a data centre or compute portfolio size can be an important factor. The market was certainly launched by some of the biggest players and some of the deepest pockets in the industry. Although Binkley concedes that, he points to the fact that this was quickly followed by a second, third and fourth tier in terms of scale, scope, and relative resources.
“To the extent that if you have a strong balance sheet and a strong credit rating certainly it still helps you when you are chasing down renewables, especially at larger scale,” he says. “But what we have seen in the past few years has been a really fruitful collaboration across industries, and with different kinds of industry groups, looking at ways they can expand the base of buyers in the market for renewables of all types. You have seen some aggregated deals where four, five or six companies come together and take a small slice of a bigger project. You will also see projects where there might be a major anchor tenant buyer, 50, 60 or 75% of a project. Then the rest of the project is filled in with small slices for smaller buyers that have more discrete needs.
“With our own procurement we have looked at what can we do that is customer specific which tends to be slightly smaller in scale. When we look at our portfolio we have covered 100% of our EMEA portfolio with renewables through retail supply contracts, in the US, we have done a combination of business unit sourcing, and projects that are discrete for individual customers like Facebook, where we are sourcing a solar farm specifically for load that they have with us. There are options to go up and down the stack, although I still think scale favours you in this market, but it is certainly rapidly evolving, and I think the options available are moving every day.”
Partnering for power
When it comes to working with utilities, the landscape is changing. This modification in the relationship is driven by several contributing factors. First there is the drive from the utilities themselves to decarbonise their value chain, particularly when it comes to power generation. Then there is the evolving solutions and products that they are now offering to the market.
“If you go back ten years and wanted renewables from a utility, about the only option was to go to them and they could sell you some racks at some inflated price,” Binkley explains. “It was very much ‘take it or leave it’. And that was not meeting muster for a lot of buyers in the market. Utilities are now offering renewables tied to new wind or solar projects; they are contracting specifically for customers that enrol in the ability to get racks and for that to be priced competitively. That has really been a sea change.
“The other thing that we are seeing with utilities is a little bit more focus on grid modernisation, thinking more holistically. There are all these variable sources of power coming online, there is net metered solar, and by the way we have got these massive data centres that are the new industry in terms of load. What can they do to help ensure the grid is stable and reliable? How can we work in a two-way partnership with utilities and with data centres to maintain grid stability, maintain reliability and keep costs down? We are involved in a lot of dialogue with utilities around how we can be partners with them and mutually benefit from that.”
Looking to the future
Binkley is certain that the future will continue to be about a drive to reduce the carbon footprint lifecycle of data centres. Traditionally the approach has been somewhat focused on just renewable energy, but he believes that the scope is going to expand significantly. “We were talking with a customer recently and they were they were asking us about things such as reforestation credits, water restoration credits, zero net water use and zero deforestation,” he concludes. “These things that are glimmers in the eye of most people if they are even aware of them at all.
“There are folks out there in the industry that are really thinking about that and we are thinking about these things too. We are going to be thinking much more holistically about how we bring solutions to the table for customers that ticks a lot of environmental and sustainability boxes, without sacrificing performance and frankly, ultimately deliver enhanced performance. Because I think we are going to see denser compute, we are going to see customers’ needs increasing over time rather than decreasing. And to be able to do that in a way that decouples energy use and the intensity of data centres from carbon emissions is going to be a critical element of success.”