The Australian data centre sector can do more to reduce its carbon footprint while containing and even reducing energy expenditure thanks to technological advancements and improvements to energy procurement.
A new report entitled ‘Data Centres A guide to sustainable procurement’ found the data centre sector is well-positioned to benefit from technology that makes Power Purchase Agreements (PPAs) available to smaller businesses using under 10MW of power annually, as well as simplifying legal and financial processes around direct energy procurement.
The Australian data centre sector is responsible for more than four per cent of national energy consumption - second only to the resources sector.
It is also highly contested, with more than 50,000 data centres registered in Australia. Energy currently accounts for one in every five dollars of operational spending by the average data centre - the greatest single operational cost for most energy centres.
Even for those data centres whose usage exceeds the 10MW threshold for traditional PPA procurement, traditional models of energy sales have presented barriers to sustainable energy buying for data centres. These include:
Concerns around continuity of supply
Complexity of negotiations and contracting for blended solutions (procuring power from more than one project)
The long timeline for traditional PPAs
Intensive, complex and costly legal processes for procurement
Financial and back-office challenges
The introduction of technology will simplify procurement, standardise legal processes and allow more flexible and transparent energy purchasing options.
It will also provide Australian data centre sector the opportunity to directly purchase sustainable energy while lowering barriers around both size and complexity.
Report author, WePower’s Harley Tempest, said there are three options for data centre customers.
They are direct PPAs, direct PPAs with firming arrangements (also known as ‘sleeved’ PPAs) and retail PPAs where a retailer offers energy linked directly to a specific project, guaranteeing supply.
“For a sector as energy-intensive as the data centre business is, having the option to engage in reliable, transparent and flexible green energy procurement is a game-changer,” Tempest said.
“WePower uses blockchain technology to trace energy from its source all the way through the purchase process right to the end buyer.
“This opens up options for the Australian data centre sector to buy power secure in the knowledge of where it came from, how it was made and how much it will cost.”