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Research Management for Cloud Computing Carbon Savings

This research aims to understand the impact of cloud computing on energy consumption and identify CO2e savings. It will provide a fact base for future interventions and examine market conditions and service providers' strategies in promoting carbon savings. The study will inform the Carbon Trust on potential interventions and information needed for guidance and decision support for carbon beneficial cloud computing solutions.

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Research Management for Cloud Computing Carbon Savings

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  1. New Research ManagementFor Technical Support ServicesSpecification for Phase 1 (Technology) Evidence Base on Cloud ComputingStakeholder Engagement 23 March 2011Julie Ash

  2. Research aims Carbon Trust are conducting an initial study to identify the opportunities and risks for carbon savings generated by Cloud Computing in overall terms. Understanding the business decision surrounding cloud computing and the benefits promoted by service providers will inform the Carbon Trust on the following; • What interventions might it be useful for the Carbon Trust to consider? • What information is needed to develop guidance and decision support models for carbon beneficial cloud computing solutions? The study will provide a credible fact base that can be used as a source of information for future research and intervention.

  3. Research Questions The questions this research aims to address are as follows; • What impact will cloud computing have on energy consumption in the future? • Why will delivering scalable, on-demand IT capabilities generate CO2e savings? • What levels of CO2e savings can be generated by different cloud computing service and deployment models? • How are CO2e savings from cloud computing influenced by market conditions and service providers growth strategies? • Are CO2e savings actively promoted by service providers and considered by customers as part of the cloud computing business decision?

  4. Carbon emissions from data centre energy use worldwide is projected to grow at around 11% per annum to reach 340 Mt CO2e per annum by 20206 Breakdown of Emissions from Data Centers based on estimated CAGR Western Europe8 2009 34 MtCO2e UK 9 2009 4 MtCO2e Worldwide6 2009 100 MtCO2e *Figures estimated using CAGR where forecasts not provided by source Based on a worldwide CAGR of 11%, UK carbon emissions could increase from 4.4 MtCO2e to 8.1 MtCO2e by 2015 and 13.7 MtCO2e by 2020. In reality UK Total Energy Use dropped by 5.9% in 2009 compared to 2007 levels, due to the recession. An example of how economic conditions can influence demand During the period 2007 to 2020 the CAGR ranges from 3% in Europe to between 4% and 11% worldwide. Variance exists in data centre energy consumption figures, both now and into the future. References (see notes): (6) Report - McKinsey Revolutionzing Data Center Energy Efficiency 2008. (7) http://www.connectingindustry.com/story.asp?sectioncode=665&storycode=192462 (8) Estimates based on DECC Report. 2010 Update. Energy Consumption in the UK: Final Energy Consumption by Fuel 1970-2009 (10) Report – Greenpeace International

  5. Rebound effects The enabling effects of ICT can contribute to reducing “business as usual” emissions, but rebound effects may increase them17 Direct ICT emissions • ICT Enablement Effects • Primary enabling effects are those expected to reduce emissions of “business as usual” such as reductions in: • Energy consumption • Travel or shipments • Materials used • Secondary enabling effects occur over a longer timeframe and include reduced use of and development of infrastructure • Rebound effects offset some of the enabling effects by increasing emissions such as increased use of infrastructure18 Net Enabling Effect with rebound Business as Usual MtCO2e Primary enabling effects Net Enabling Effect without rebound Secondary enabling effects Based on BCG and GeSI ICT Enablement Methodologyx In order to achieve a reduction in emissions from ICT enabling the potential rebound effects need to be considered References (17) GeSI and The Climate Group (2008). SMART 2020: Enabling the low carbon economy in the information age (18) The Boston Consulting Group and GeSI (September 2010). Evaluating the carbon-reducing impacts of ICT – An assessment methodology

  6. It is suggested that Cloud computing could reduce worldwide energy consumption of data centres from 201.8 TWh in 2010 to 139.8 TWh by 20201 • Without Cloud Computing data centres would continue to grow reaching 226.4 TWh by 20201 • Electricity consumption is set to rise 76% from 2007-20302 • Global demand at 3,200 MB per day - estimated at 1,175 GW average power to support current levels of activity at current levels of efficiency3 • Energy bills for non-domestic medium-sized • consumers, are projected to be 26% higher in 2020 higher as a result of climate change and energy policies 4 • Server sales expected to grow from $8.4 billion in 2010 = 600,000 units to $12.6 billion in 2014 = 1.3 million units5 • Revenue from cloud services could rise from $56billion in 2009, $68.3billion in 2010 to $150billion in 2013 (includes advertising)6 In certain circumstances resource efficiencies inherent in cloud computing could reduce or mitigate future ICT energy demand References (see Notes) (1) Pike Research 2010. Cloud Computing Energy Efficiency. (2) International Energy Agency . World Energy Outlook 2009 Fact Sheet. (3) Dr Chris Priest, Reader in Sustainability and Computer Systems, (4) DECC. July 2010. Estimated impacts of energy and climate change policies on energy prices and bills (5) International Data Corporate Worldwide 2010. Worldwide Enterprise Service Clouding Computing 2010-2014 Forecast (6) Gartner. Public Cloud Services, Worldwide and Regions industry sectors 2009-2014

  7. Awareness and understanding of Cloud Computing is growing and it has been clearly defined • Cloud computing enables on-demand access to shared IT capabilities delivered over the internet as a service • Definition of Cloud Computing, incorporating NIST and G-Cloud views:13 References (13) Kate Craig-Wood. Posted 24/02/2010. Definition of Cloud Computing, incorporating NIST and G-Cloud views http://www.katescomment.com/definition-of-cloud-computing-nist-g-cloud/

  8. There are five essential characteristics or tests used to establish if a service is within the cloud…

  9. Three distinct service models are offered to meet user requirements for standardised or bespoke ICT Abstractions of cloud computing14 References (14) Abstractions of Cloud Computing - Gerard Briscoe, Postdoctoral Researcher at the London School of Economics and Political Science and Alexandros Marinos, research student at the University of Surrey.

  10. Cloud services are deployed in four different ways and are dependent on the customers security, regulatory needs

  11. Carbon Savings The Essential Characteristics The demand for cloud computing is driven by various business advantages and disadvantages related to the five essential characteristics but is there a sixth characteristic? Carbon savings are promoted as a benefit but are not currently considered to be an essential characteristic

  12. Carbon Savings The carbon savings of cloud computing can be captured through various means Key Drivers of Cloud Computing’s Reduced Environmental Footprint14 Additional carbon savings Carbon management software Measurement of SLA and carbon foot prints Green commercials in contract CRC Penalty avoidance Cloud providers are currently aware of a number of carbon saving opportunities BUT there are additionalopportunities that could lead to even greater carbon savings (14) Accenture (2010). Cloud Computing and Sustainability: The Environmental Benefits of Moving to the Cloud

  13. There are examples of large organisations promoting the carbon saving benefits of cloud computing Microsoft are selling the carbon saving benefits of the cloud References (19) Accenture (2010). Cloud computing and sustainability: The Environmental Benefits of Moving to the Cloud

  14. Technological driven carbon savings are derived from utilisation, shared infrastructure, energy efficient technologies and innovation Resource efficiencies drive energy efficiencies which create carbon efficiencies: Increasing server utilisation offers significant carbon savings16 Increase in number of users per server leads to less servers required Consolidating IT environment into large scale shared infrastructure will reduce overall environmental impact Adoption of cloud computing can stimulate innovation and accelerate deployment of energy efficiency technologies. Impact on carbon savings from replacement of on-premise infrastructure Increasing the utilisation of servers results in minor increases in power and reduces the impact of idle power AND is more energy efficient that setting up a new servers to hold the same data References (16) Accenture (2010). Cloud computing and sustainability: The Environmental Benefits of Moving to the Cloud

  15. Carbon emission savings could be significantly influenced by market growth strategies Cloud Computing is here • Penetration pricing strategy sets price low to encourage early adopters • As cloud computing moves through technology adoption lifecycle pricing strategies will be altered • Increases in price will create less fluctuation in demand • A change in market conditions will affect supply and demand leading to greater energy savings in the future15 The cloud computing market is still developing. Providers encourage early adopters through pricing strategies and product positioning. Utilising carbon/energy saving arguments earlier in the markets development could lead to additional carbon savings. References (15) Accenture (2010). Cloud computing and sustainability: The Environmental Benefits of Moving to the Cloud

  16. Technological change increases the efficiency with which a resource is used tends to increase (not decrease) the rate of consumption of that resource 20 Jevons Paradox: • Improved energy efficiency which lowers the relative cost of using a resource increases demand and potentially counteracts any savings from the increased efficiency Jevons Paradox in the context of Cloud Computing: • The ‘simplicity of the cloud offer’ may lead to increased ICT consumption by consumer and increased energy use. • Enhanced technology solutions (e.g. media richness) increase demand for complex processing needs (e.g. faster processors) and coupled with changing consumer behaviour increases energy. Without a carbon feedback mechanism the combination of market growth strategies and cloud computing characteristics could increase consumer demand to a level that offsets any potential carbon savings References (20) Alcott, B. 2005. Jevons’ Paradox. Ecological Economics 54 (2005) 9– 21. Retrieved from http://www.blakealcott.org/pdf/sdarticle.pdf

  17. Realisation of the CO2e savings potential of cloud computing depends on how it is provided and utilised

  18. Stakeholder questions – Provider specific About your company • Does your company provide Cloud Services? • What is the your company’s Cloud Computing vision? • Do you agree / disagree with the essential characteristics of cloud computing mentioned in Slide 8? • If disagree, what are the essential characteristics of Cloud Computing for your company? • Do you have a feel for what percentage of UK/world data centres are focused on the delivery cloud computing services in 2010? • Do you have a feel for how this percentage is expected to change by 2020? • Does your Company consider the green aspects of Cloud Computing? If so what does it consider these to be? • Are you currently undertaking any research into the carbon/green benefits of Cloud Computing?

  19. Stakeholder Questions - Carbon Seeking evidence to support carbon saving 9. Does your company have a view on the level of CO2e savings that could be captured by the cloud: • are CO2e savings derived from different types of cloud computing? • What is the CO2e savings potential of SaaS, PaaS and/or IaaS from a technology implementation perspective • What is the CO2e savings potential of SaaS, PaaS and/or Iaas from a market penetration perspective • What is the CO2e savings potential for different deployment models e.g. Public, Private, Hybrid and Community cloud? • What generates the most CO2e savings from cloud computing? Engaging with customers 10. Does your company present the green aspects of the cloud computing in its marketing material? • Are carbon savings included in the promotion of cloud computing? • How dominant are carbon savings as a cloud marketing tool or business consideration? • What position does carbon savings have in promotional literature? • Are customers considering carbon savings when evaluating cloud computing? • What are the customers requirements for carbon savings in cloud computing? • What influence does the Carbon Reduction Commitment have on cloud computing services? • What contractual conditions apply to energy and/or carbon savings?

  20. Stakeholder questions - Market 11. What business benefits of cloud computing do you promote for the following user groups; • Small user groups (<250 users) • Medium user groups (<1000 users) • Large user groups (>1,000 users) 12. Where on the technology adoption lifecycle (see diagram) would you place your cloud computing offering and more generally cloud computing solutions available in the market place? 13. What business decisions, in your opinion, are considered by the customer when comparing cloud computing to on-premise infrastructure? 14. How will cloud computing affect ICT ownership for the future? 15. What will influence demand for cloud computing in the future? 16. What is the pricing strategy currently adopted by your organisation for cloud computing? 17. What guidance or business decision tools are available to support the cloud computing customer?

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