Sustainable IT | Ted Samson » IBM enters the energy efficient credit game

November 01, 2007 | Comments: (0)

IBM enters the energy efficient credit game

TAGS: IBM

Big Blue today is launching the IBM Efficiency Certificates initiative, a program through which companies can earn certified energy efficiency credits (EECs) for reducing power consumption in the datacenter. Also known as white tags, EECs can serve as proof to investors of a company's energy-saving efforts -- or as a source of income when sold on the burgeoning white-tag market.

As part of the initiative, IBM has partnered with Neuwing Energy, a verifier of energy efficiency projects and marketer of EECs. Neuwing will first determine the initial energy draw from an IBM client's existing datacenter or IT equipment identified for consolidation using industry-accepted energy estimates. IBM will then work with the client to implement energy-saving projects, such as server consolidation through virtualization. After the project is complete, Neuwing will perform a second review of the energy draw and calculate the efficiency improvement in terms of megawatt hours saved. In turn, IBM will issue energy efficiency certificates representing those savings.

It's clear how Neuwing and IBM would respectively benefit from this initiative: The client company pays Neuwing for the assessment and certification. IBM profits by providing consulting services and equipment to the customers to achieve energy savings. But what's the value to a company in amassing EECs?

According to Rich Lechner, IBM's vice president of IT optimization, there are two primary benefits. First, more investors and shareholders are looking to companies to reduce their environmental impact. Saving energy has that very outcome. Thus, certificate bearers can show off their credits as proof of their efforts. As an added bonus, these kinds of credits could appeal to the financial sensibilities of investors, because they represent cost savings.

Second, Lechner says there's a growing market. Connecticut implemented a white tag standard this year; Nevada and Pennsylvania have adopted legislation requiring white tags as part of a mandated state portfolio standard. There are also markets in Europe. White-tag buyers include electric utilities mandated to cap power consumption, as well as organizations unable to meet established greenhouse gas emission goals.

"Since the recent emergence of energy efficiency certificates as a market, we have seen market volume quickly grow into the millions of megawatt-hours and expect the energy efficiency market to surpass the renewable energy certificates market in a couple of years," said Matthew Rosenblum, executive vice president and CFO of Neuwing.

In a way, saved megawatt hours is a rival metric to carbon emissions. Many companies are working to measure their carbon footprints and report improvements from year to year. Moreover, they're purchasing carbon offsets to compensate for their own CO2 emissions. But Lechner argues that measuring megawatt hours is "less fuzzy" than measuring CO2s. That is, it's relatively easy to take a piece of IT equipment and measure at the wall how many watts it consumes. The same can't be said for carbon and other GHGs.

IBM Efficiency Certificates will first be available in the United States and expand to Europe in 2008.

Posted by Ted Samson on November 1, 2007 09:01 PM

RATE THIS ARTICLE: