The Circular Economy Supplement by DCD Magazine

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Contents 4. Re-use, refurb, recycle As-a-service models are encouraging hyperscalers, enterprises, and even colos to reuse hardware assets 10. The business of heat Giving it away for free is never a good idea. Only when we get commercial will we succeed at heat reuse 14. Turn your ugly fat into power Several data centers are switching their backup diesel generators from fossil power to recycled fuel

4 10 14

Closing the circle

n the early 1980s, environmentalists outraged by the levels of waste in society fought hard to get everyone to recycle - and won. New Jersey passed a

mandatory recycling law in 1984, curbside collection bins sprouted everywhere. The collection schemes successfully created a huge supply of recycled newspapers, glass bottles and office paper. But the new system didn't work, because it produced something for which there was no market. Manufacturers weren't using recycled materials, and consumers weren't buying recycled products. Recycling only took off when a market developed, the circle closed, and there was demand for the recycled material. That's why we now talk about a "circular economy." in which surplus or recycled material is valued and paid for. It's vitally important that digital infrastructure, like every other sector, reduces its footprint on the planet. But that can only happen if we turn a vague goal of recycling into an actual economy.

But that is changing, as server makers start to hit the limits of Moore's Law. Another big change is that hardware is no longer dedicated. The cloud makes software independent of the hardware it runs on, so hyperscalers are free to run hardware as long as they like, on a scale where the second user market makes sense. That same thinking is reaching into on-premises data centers as hardware providers are offering kit as a service, and then taking responsibility for its disposal. Hardware reuse is becoming much more usual (p4).

A hot market Data centers have been trying to offer their waste heat for years, but few people are ready to take it. As with recycled paper in the 1980s, the answer is that waste heat is not an attractive product. That might be changing. As nations attempt to decarbonize heating electric heat has become more sought after. And operators could be finally getting beyond seeing this as an ESG issue, and getting commercial about it (p10).

Reusing the cloud

A use for fat

The manufacture of IT hardware embodies significant amounts of energy. It's hard to get accurate figures, but some studies suggest that the manufacture of a server can consume more energy than it will use in its lifetime. It used to be said that replacing servers after a short while would result in net savings, because new servers were much more efficient than the ones they were replacing.

There are many more areas of IT where assets can be repurposed and reused, including refrigerants, building materials and more. We'll come to those in future articles. For now, we close with a look at a new circular economy right in the data center's back yard. Backup diesel generators, without any modification, can switch over to fuel made from recycled cooking fat (p14).

Circular Economy Supplement 3

Re-use, refurb, recycle: Circular economy thinking and data center IT assets Covid-19 and supply chain issues are driving up interest in circular thinking for servers and networking gear, but it might be the hyperscalers and hardware-as-a-service OEMs that make it the norm

hile data center owners and operators are increasingly signing contracts to procure renewable energy or connect to district heating schemes, true carbon neutrality can only come once companies address the sustainability of IT hardware assets. According to the Global e-Waste Monitor report, the world generated 53.6 million metric tons (Mt) in 2019, and only 17.4 percent of this was officially documented as properly collected and recycled. Much of this equipment was likely

consumer-grade devices, where environmental groups are demanding that devices be made repairable to prolong their lives. But the role of enterprise IT hardware in data centers should be addressed with equal urgency. According to SuperMicro’s 2021 Data Centers & The Environment study, 28 percent of companies globally reuse/ repurpose IT hardware internally, but there are still 26 percent who don’t fully recycle their IT assets. Research by Service Express suggests hardware failure rates remain less than 0.5 percent, even over a 10-15 year lifespan, suggesting companies that refreshed

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Dan Swinhoe News Editor

hardware after more than the customary three to five years could get a much longer usable lifespan if they were willing to compromise slightly on having the latest and greatest machines. It is true that hardware refresh cycles are getting longer – an average of five-year cycle in 2020, up from three in 2015, partly driven by the fact that chip performance and efficiency are not increasing as fast as they used to. But that’s still a potential e-waste problem whenever a company refreshes its hardware. However, driven by the ownership models of public cloud and as-a-service hardware,

Circular Economy Supplement sustainability choices are increasingly being taken out of customers' hands and onto the agendas of hyperscalers and OEMs. Hyperscalers think circular The move to the cloud means that hyperscale players such as Microsoft are forced to consider the whole lifecycle of their servers. These players are now hardware owners on a massive global scale, and this compels them to derive as much value as possible from their investments. Microsoft, Google, Amazon, Iron Mountain, Vodafone, and Dell are all members of the Circular Electronics Partnership (CEP), which aims to reduce e-waste and increase circular practices amongst electronics companies. While historically hyperscalers have turned to third-parties, increasingly they are turning to in-house solutions to further drive circular practices. In 2020, Microsoft announced Circular Centers, dedicated to reusing and repurposing servers and other hardware in its data centers. Its servers have an average lifespan of around five years, and Microsoft expects the centers to increase the reuse of servers and components by up to 90 percent by 2025. Microsoft – which aims to be carbon negative by 2030 – opened its third European Circular Center in Sweden in November 2021 alongside its new Azure cloud region in the county; the company said the facility will have the ability to support 12,000 servers per month. Its first center was launched in Amsterdam, and although it hasn’t shared all center locations the company said recently it plans to open centers in Boydton, Virginia; Chicago, Illinois; Dublin, Ireland; and Singapore. It noted in a blog that its projected savings could reach approximately $100 million dollars each year. Google is also a major proponent of hardware re-use and refurbish programs. In 2020, 23 percent of the data center hardware components it used in server upgrades were refurbished inventory and 8.2 million components were resold into the secondary market. The refurbishment percentage has stayed around that figure for the last few years, but the number of components resold has increased from 2.1 million in 2016. Oracle – which sells on-premise

appliances to customers and makes its own for cloud services – has its Clean Cloud initiative. The company takes back Oracle products free of charge. “It is our responsibility to reduce the impact of our hardware at the end of its useful life. When we take back our hardware for Oracle Cloud and on-prem, we sanitize it for data protection, and then reuse and recycle it as appropriate,” says Rich Kroes, vice president, global sustainability, Oracle. “Our goal is to reuse and recycle Oracle hardware at the end of life; 99.6 percent of our electronic waste was reused or recycled in FY21.” AWS doesn’t detail the circular efforts of its internal servers and other data center hardware; in its most recent sustainability report, it merely notes it has joined the Climate Neutral Data Centre Pact, which includes the promise to reuse and repair servers. As a Service makes your thinking circular While hyperscalers who own cloud hardware are keen to eke as much value out of those assets as possible, a similar trend is happening in on-premise systems, because many OEMs are transitioning to hardwareas-a-service models. The likes of Dell, Lenovo, and HPE all have their own hardware-as-a-service (hardwareaaS) offerings, where owners lease hardware from the manufacturers and return it at the end of contract. While leasing isn’t new, many companies are driving the ‘aaS’ model for hardware as a way to drive more recurring revenue and align with more ‘cloud-like’ and opex-based thinking. As a result, OEMs becoming hardware owners as well as manufacturers means re-use and refurbishment become more important as they seek greater returns on their asset investments. All three of the above-mentioned companies operate some form of asset recovery and recycling services. “In our operations, we practice a ‘DesignUse-Return’ model to cover everything from products and packaging, manufacturing and operations to product take-back and value recovery,” explains Ian Jeffs, General Manager at Lenovo Infrastructure Group. “Services such as Lenovo ARS ensures responsible asset recovery and data disposal; technology is reused where possible. Any equipment that

Hyperscalers who own cloud hardware are keen to eke as much value out of those assets as possible. On-premise systems transitioning to hardware-asa-service models are following a similar trend

cannot be repaired or resold in secondary markets is considered for reuse of parts and components. When new products are manufactured, the raw materials from previous equipment are used, bringing the economy to a full circle.” HPE has Technology Renewal Centers (TRC) in Erskine, Scotland, and Andover, Massachusetts, which opened around 1999. The 150,000 square foot Erskine facility was previously a PC production site for Compaq during the 1990s until HP acquired the company in 2002; the renewal center there opened in 2011. Controlled by the company’s Financial Services division, the centers are tasked with maximizing the value of HPE IT assets – whether owned by the company or customer – through re-use, refurbishment, resale, or recycling. It claims its TRCs are the largest IT manufacturer refurbishing facilities in the world – Andover measures some 400,000 sq ft (37,000 sq m) – and deals with some three million units per year; the company re-use or resale levels for enterprise equipment is up around the 90 percent mark. Almost all the rest is recycled. In a story from 2018, HPE’s Erskine facility helped NASA maintain mission-critical applications running on legacy systems, by supplying a 16-year old but good-as-new HP AlphaServer GS1280. While the TRCs were originally set up by HPE for customers as an alternative to external ITAD (IT asset disposal) companies that can offer extra guarantees and warranties on equipment, the company’s move to hardware-aaS means that HPE is now a major customer of its own TRCs. “When you look at our pivot to an as a service company, there's a dynamic there that we now as the OEM own all of these assets,” says Jim O'Grady, VP, global asset management, HPE. “We're looking at how do we get more return on those assets; how do we re-fleet assets; take assets from one service contract that may have expired or migrated to new technology, or customers that are over-provisioned and get it earning a return under a different as a service contract?” “Our distributed assets, they could be at a colo, could be an on-prem customer site; we're looking at the whole thing as one asset base and trying to extract as much value out of that as possible. If you can create a company-wide program to deal with that risk it certainly helps our ability to be more effective with as-a-service.” “We look at returns as great; they are a source for us to do more business. If you're afraid of dealing with assets, you shouldn't be in this business.” Other appliance makers could follow suit.

Circular Economy Supplement 5

Grant Caley, UK & Ireland chief technologist at NetApp, notes his company – which also offers its appliances as an option under a hardware-aaS model – offers customers the option of recycling their end-of-use NetApp equipment. He says much of the equipment that is no longer sold or supported is recycled, but that its Keystone hardware-aaS option ‘does support the circular economy thinking, to a degree’: “If we remove the service we will reuse the hardware with other customers, with appropriate security wiping beforehand.” HPE’s O’Grady agrees that in the future, as-a-service-based hardware providers could entirely focus on the workloads and compute performance requirements to the point where customers have very little say on what hardware they receive, enabling the providers to re-use more hardware. “Clients eventually will probably not be able to dictate what assets are used under an as a service model,” he says. Can colos get circular with clients’ kit? While the move to the cloud means many

enterprises have less in the way of IT assets to worry about – and therefore recycle, refurb, or re-use – it's important that all companies play their part. Which can be harder to drive in smaller companies that don’t have the added scrutiny often put upon Amazon et al by the likes of Greenpeace or ESG-focused investors. According to Uptime’s 2021 Gglobal data center survey, just 25 percent of companies measure e-waste or equipment life cycle metrics, which it said: “underscores the data center sector’s overall immaturity in adopting comprehensive sustainability practices.” While IT asset disposal (ITAD) services do exist, enterprises utilizing those services are often more concerned with regulatory requirements than environmental morals, as poor disposal can be costly. Morgan Stanley was fined more than $60 million – on top of a $60 million class action settlement – for poor disposal practices during a 2016 decommissioning project, which left customer data on recycled hardware. Colocation providers, while housing much of the world’s IT hardware, can find it

Uptime Institute found just 25 percent of companies measure e-waste, underscoring the data center sector’s "overall immaturity in adopting comprehensive sustainability practices” 6

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harder to drive circular economy thinking. They can ensure their facilities use energy from renewable sources, but they don’t own the IT assets within those facilities, and refresh cycles are in the hands of customers. “Most data center providers don’t own the IT equipment they host, so we can only encourage this behavior. Ultimately, it is down to the customer to implement these kinds of initiatives,” says David Watkins, solutions director for Virtus Data Centres. He notes the company has partnered with Technimove, amongst others, to provide recycling services. He also notes that hyperscalers view hardware differently to smaller organizations. “The larger companies often have bespoke IT equipment, rather than buying products ‘off the shelf,’ he says. To this end, these large firms view IT equipment in a more granular way; a sum of component parts rather than a ‘server.’ This makes it is easier to identify opportunities to recycle/reuse.” Holland Barry, SVP and Field CTO at Cyxtera, notes that his company has a number of customers procuring and deploying this type of hardware, with much of the demand being driven by supply chain issues and increased focus on ESG initiatives. “We’ve seen many customers initially select newer hardware for their projects only to reconsider based on timelines for the actual delivery of said hardware,” he says. Internally, colo providers that are becoming service providers are also

Circular Economy Supplement

"Some companies are now demanding re-used & refurbished assets in their contracts, and saying they want to be a user of circular assets, and not a generator" increasingly thinking about circular practices as they too become hardware owners. “Our Metal services up to Generation 2 are maintained so they are available for clients to use. We reprice older generation equipment to encourage clients to move relevant workloads onto these devices,” Michael Winterson, managing director at Equinix Services, tells DCD. “With our Generation 3 servers, we use the latest Open19 design standards where much of the basic hardware is common and reusable, for instance chassis and fans. This allows us to plan for many years of service while being able to change out motherboards and expansion devices. Barry says Cyxtera can deliver its own bare-metal solutions “leveraging refurb/ refreshed hardware with the level of service and quality customers expect.” “We’re deploying hardware from partners active in the circular economy to deliver our own proprietary solutions like our Enterprise Bare Metal offering. Cyxtera also has technology partners that have circular economy infrastructure as part of their platform, and we can include them in the solution, particularly customers looking for refurbished infrastructure based on ESG initiatives or as a response to supply chain challenges.” ITRenew – recently acquired by Iron Mountain – offers re-used and refurbished hardware based on OCP standards. One company using ITRenew hardware is Dutch startup Blockheating, which installs bare metal servers at greenhouses in order to warm crops with excess server heat. Circle B also offers bare metal IT service in Maincube's Amsterdam data center using recycled hyperscale hardware provided by ITRenew. Money talks when ESG doesn't While O’Grady says companies of all stripes can be interested in circular thinking, he notes those that have a chief sustainability officer are the most engaged with the company’s work in this space. The company provides full breakdowns of recovery efforts, outlining how much hardware has been refurbished and recycled, breakdowns of materials, and information including amounts CO2 saved and material which avoided landfill. He notes that some companies are now demanding re-used & refurbished assets in their contracts.

“Reuse now is like the new metric - X percent of my assets went back into the circular economy – customers want to know that. And clients are also saying they want to be a user of circular assets, and not a generator; they’re asking us if I'm going to acquire X amount of infrastructure, I want Y percent of it to be used.” “That's a recent change that we've seen in certain RFPs from our clients; saying their assets can't just be pushed into a circular economy, they want to look at how they acquire them too so that they become active on both ends of that circular economy scale.” At companies where sustainability isn’t a large driver, the business benefits of such circular thinking can be a selling point even if the ESG ones aren’t. Amid Covid-19 and the current supply chain crunches, O’Grady notes there have been a lot of companies looking to extend their current hardware fleet with like-for-like hardware, driving more interest in re-used and refurbed equipment. “When Covid hit, we saw an explosion where customers needed to scale out their existing infrastructure, versus trying to get to the next generation,” he says.” They had an immediate need for people working from home. They needed more workload capability and that really got customers interested in working with us.” “The ongoing chip shortages are likely to continue until the end of 2022, and we’ve seen a greater uptake of refurbished equipment as a result,” adds Craig Campion, director of IT asset disposal services at Stone Group. “And despite common misconceptions, it can operate just as well as brand new kit and typically offers warranties that rival those offered on sales of new devices.” At the same time, customers are also looking to gain more lifetime value from their investments – what O’Grady describes as Return on Assets (ROA). “We see a lot of our clients starting to look at return on assets through extended platform life or receiving assets back into their own environment under a different usage case, so they can get that asset value because it's highly depreciated at that time.” “Migrating everything to the next gen may not make sense from a budget standpoint. Targeting your mission critical infrastructure transformational needs first probably makes sense, And then let's figure out how used

equipment can extend the life of existing platforms or reuse those platforms in another workload scenario.” HPE said it has given more than $400 million back to customers through its asset lifecycle initiatives over the last five years. But the hyperscalers are also seeing the benefits of keeping hardware going for as long as possible. AWS recently said more efficient software meant it could add a year to the expected lifespan of severs and network equipment to five and six years respectively. "We're prospectively updating the useful life of our servers and networking equipment, beginning in January," CFO Brian Olsavsky told investors on Amazon.com's earnings call for Q4 2021 and FY 2021. The company said the move could save it a billion dollars per year. Google made a similar decision; in its earnings call for Q4 2021 the company said it made a decision to keep its cloud data center hardware running for an extra year and booked $2.6 billion of depreciation savings as a result. In the future, such circular approaches could become even more important. Steven Carlini, vice president of innovation and data centers at Schneider Electric, notes that although smaller than traditional data centers, the scale and volume at which edge infrastructure will be deployed means that reducing the environmental impact will be essential. “Building a sustainable Edge data center at scale requires that greater attention be paid when selecting components – second life servers, for example – during the design and deployment stages,” he says. A survey by Stone suggested of the 32 percent of organizations that said they only buy new equipment, 39 percent said this was because they were concerned that refurbished models would be inferior to new models; 34 percent said they were reluctant to purchase refurbished IT as they don’t believe it will have a long useful life; and 36 percent were concerned about adequate guarantees. He says all of these worries are unfounded. “Reputable sellers of refurbished equipment ensure models are sold in a likenew condition; many devices are former lease equipment retired after only a couple of years’ use, equipment returned because a buyer changed their mind or found cosmetic damage/fault. Once wiped, reconditioned, and repaired if necessary, these machines can provide power, functionality, and reliability that equals new,” says Campion. “Not only is buying refurbished an ecofriendlier route, but it’s also likely to cost substantially less than new, allowing you to stretch your IT budget further and possibly even deploy higher-spec equipment than your budget would afford if buying all new”

Circular Economy Supplement 7

Sustainability Metrics Offer a Level Playing Field for Data Centers Football relies on agreed rules for scoring goals and touchdowns. Data centers need to agree ways to compare their progress to sustainability, says Steve Carlini

am one of those people who live

Each team knows the rules before the

comprehensive metrics are nonexistent.

and breathe innovation, and,

game starts and this level playing field

Sure, usable metrics are out there but

in my spare time, I sometimes

is accomplished through standardized

not every company uses the same ones

(okay, very often) watch American

scoring that is a form or metric. Metrics

and, if they do, they may not use them

football, so this is my favorite time

are exactly what is needed when it comes

in the same way. It’s quite common to

of year. During a recent game, I

to reporting on sustainability in data

see companies present metrics that are

centers.

favorable. “We have reduced greenhouse

listened to the announcer talk of a level playing field and it got me thinking about

The data center industry lacks a

data center sustainability. In football, the

level playing field right now because

gas emission 20% over the last three years” could be a claim. This may be great or

scoring tells the winning team from the losing team – six points for a touchdown and three points for a field goal, for example. Teams cannot garner an unfair advantage by declaring they want ten points for a touchdown.

The data center industry lacks a level playing field right now because comprehensive metrics are nonexistent

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Schneider Electric | Advertorial

Everyone loves a winner but without standardized metrics, how can we tell if these claims are touchdowns or fumbles? centers need to grow at an exponential

Introducing a Guide to Environmental

rate, potentially posing a serious

Sustainability Metrics for Data Centers

environmental risk from energy use,

At Schneider Electric, we are happy to

greenhouse gas emissions, waste of

introduce our latest White Paper – WP

obsolete equipment in landfills, and let’s

#67 Guide to Environmental Sustainability

not forget water use. The other team

Metrics for Data Centers, which I believe

might say data center operators have

will lead the charge for more sustainable

been engaged in sustainability efforts for

data centers. Data center service providers

years and are the most advanced industry

and companies that operate data centers

in reducing fossil fuel based energy

can benefit by using this guide on their

consumption, minimizing greenhouse gas

data center sustainability journey. We

emissions and water usage, and highest

have worked across the data center

use of circular materials.

industry and associations and have come

But, as I have stated, without a level playing field it’s impossible for companies to report in a universally understandable

up with 5 categories and 23 suggested metrics. Companies are at different levels of

way and therefore impossible to compare

sustainability tracking, so we also offer

and keep score between companies.

the three level system of Beginning,

Everyone loves a winner but without a set

Advanced, and Leading. Beginning

of appropriate, standardized metrics that

companies will report on Energy Use,

all data center companies use, how are

Greenhouse Gas Emissions, and Water

we supposed to know if these claims are

Utilization. The 11 metrics are a mix of

touchdowns or fumbles?

measured values like GHG emissions in

horrible based on the starting point or the

mtCO2e and ratios like Carbon usage

actual greenhouse gas emissions because

Standardized reporting benefits

effectiveness (CUE) in mtCO2e/kWh.

they still may be emitting an enormous

companies and investors

Advanced metrics bring in the Waste

amount of greenhouse gasses.

A comprehensive sustainability

category and the Leading metrics include

report including categories and the

a category for Land and Biodiversity.

Another challenge could be that selective reporting results in gaps. Many

corresponding metrics that would be

data center companies today choose

associated with those categories would

categories and metrics in WP #67 Guide

We go into great detail on all of the

to leave out water usage, for example.

benefit the company itself – it could

to Environmental Sustainability Metrics

Why the gap? Mainly because a set of

see how it is performing in relation to

for Data Centers. If you are interested

appropriate, standardized metrics that all

its peers. Standardized metrics and a

in innovation, sustainability, and data

data center companies use doesn’t exist.

standardized reporting format would

centers, I encourage you to read it, when

There are currently no organizations

also benefit customers of data center

you’re not watching football that is.

or standards bodies recommending

operators as they would be able to

comprehensive sustainability

compare service providers on, as they

reporting including categories and the

say in football, a level playing field. And

corresponding metrics that would be

it would benefit investors who would be

associated with those categories.

able to perform appropriate analysis on sustainability criteria similar to how they

Touchdown or fumble?

evaluate companies using standardized

Opposing teams may have differing

financial criteria. I like to use the example

opinions. One team would say

of a financial balance sheet or income

comprehensive reporting is needed

statement: every business reports using

because digital transformation is

the same format for categories and line

accelerating at such a fast pace that data

items.

Steve Carlini, Schneider Electric Steve Carlini is the Vice President of Innovation and Data Center at Schneider Electric

The Edge in Action Supplement 9

Heat reuse: It’s time it meant business If you give your heat away for free, no one wants it. Put a price on it, and customers will form a line

ata center operators like to talk about heat reuse, but they probably talk about it more often than they actually do it. There are reasons for that, but sll that could be about to change. Let’s start with the basics. How much energy comes out of the data center as heat, how much is wasted, and what can you do with it? The big picture The short answer to the first question is is “all of it”. Energy is not consumed, but changes from one form to another. After performing other tasks, what is left is heat. So a 100MW data center will produce, more or less, 100MW of heat. Data center efficiency measures that reduce power usage effectiveness (PUE) are aimed at driving more of that energy through the servers, so less is used for cooling, which means more computation is done per Watt. Once the energy is heat, any that is not wanted elsewhere is released and, effectively, wasted. Data center efficiency, measured by PUE is reaching its practical limits, says Max Schulze head of the Sustainable Digital Infrastructure Alliance (SDIA): “Data centers did a good job over time reducing this number, It's about 1.2 to 1.4 in the modern data center, and I don't think we'll get more efficient than that. So the only way to reach the next level of efficiency is to use the heat.” But who wants data center waste heat? Historically most data centers have found

that no one else wants their waste heat. Its temperature is too low for them to see any value in it. “What we want is digital services, but we also get low grade heat,” says Professor Jon Summers, research leader in data centers at RISE in Sweden. “It’s not sufficiently hot to do anything with, except a bit of space heating. Therein lies the problem.” There are exceptions, one of which is Stockholm Data Parks, a 30MW campus near the center of Stockholm where data centers connect to a district heating system, which pays them for their hot air. But only a small minority of facilities are in cities where there is a district heating system in place which can can take their heat, and where the climate is cold enough that local homes and businesses need a lot of warming up. “You can’t go to Africa and say to them ’you should do heat reuse’. It makes no sense,” says Schulze. But the majority of data centers are in the wealthy countries in the Northern hemispheres, he says: “Most of the western world is in the northern hemisphere. So yes, we do need the heat. It is very valuable to us as a society.” Despite this, heat reuse is often “greenwash”, where a company pays lip service to an idea, to look better, without any practical results. For instance, there are data centers in Schulze’s native Amsterdam, which are “heat recovery ready” but, he asks: “What does it mean? There is a pipe sticking out of the datacenter. Come on!” That data center has made no real effort to get its heat used, he says.

Amsterdam banned new data center projects for two years in 2019, partly due to energy waste. Dutch data center operators had offered their heat but the responsibility for collecting lay elsewhere. 14 DCD Supplement • datacenterdynamics.com

Peter Judge Global Editor

It actually is hard to do But, there are reasons why heat reuse is hard to do. Take the case of AQ Compute, a Norwegian outfit backed by Aquila Capital, which could not be more keen on energy reuse. It’s partnering with efficient IT firm Cloud&Heat (of whom more later), and building in Oslo. And yet, it’s proving tricky to negotiate the Oslo data center onto the local district heating system, admits AQ Compute CEO Petter M. Tømmeraas, a heat reuse enthusiast who formerly worked at Norway’s Green Mountain, as well as Basefarm. “In Norway, heat reuse is a passion,” he says. “I’m also chair of the Norwegian Data Center industry Group, and we have working groups looking into it across the entire industry.” So Tømmeraas checked out heat reuse at the planned Oslo facility: “Over a certain size, it’s a requirement in Norway to do a report on heat reuse. You have to at least have a look at it,” he says. “But I didn’t need to be forced to do this. I would really like to do it everywhere.” The trouble is the costs are high, and it can make a data center uncompetitive, he said, “because other people will not do it”. Despite the presence of a district heating system, Tømmeraas has yet to decide whether the economics work in favor of hooking up. “The first part of the data center will be cooled by indirect air to air systems, and that makes heat reuse more tricky than in water-based systems.” It may turn out to be too difficult, he says, because: “We have air, and air is not a good source for heat.” Transferring the heat to water, could lose efficiency.” Encouraged by governments Norway may be the only place to set formal requirements for heat reuse by data centers. But the measure, introduced in 2021, is only a demand that all data centers must examine the possibility and produce a report. Many facilities might find it isn’t

Circular Economy Supplement

economically worthwhile, as was the case with AQ Compute. Norway’s government wants data centers as a growing business sector. They are required to be green in order to be accepted by citizens, and pass muster with the country’s enviropnmental plans. That seems to be a pattern elsewhere. In urban areas data centers are a good source of tax revenue, but they need land, and power. Even if they select renewable energy, they can push renewable energy targets out of reach. In Denmark, an influx of hyperscale data centers are all opting for green energy, leading to government predictions that there will be no renewable power left to meet its targets. Among the responses, the country has altered rules on the heat reuse, to encourage data centers to take part. Amsterdam banned new data center projects for two years in 2019, a moratorium which seems to have hinged partly on heat reuse. Dutch data center operators had offered their heat but, as the SDIA’s Schulze describes, the responsibility for collecting lay elsewhere. "We are going to set requirements in the area of making available residual heat free of charge for the heating of homes,” said

Amsterdam’s Alderman for sustainability, Marieke van Doorninck. But operators said they were already doing that. "In 2017, we said we would give [waste heat] for free, as a way to start discussion," said Judith De Lange of the Dutch Datacenter Association. Amsterdam data centers are built with heat reuse in mind, but it is offered on a "collect at the door" basis. Someone else has to pay to build the infrastructure to make use of the heat. In 2021, the moratorium lifted, with a promise that the issue will be discussed further. Frankfurt also clamped down on data centers somewhat, with a magistrate asking them to do something with their heat. The magistrate acknowledged the difficulty, that a temperature level of 30°C to 40°C is too low for most district heating networks. In Scandinavia heat pumps are used, to boost the temperature of waste heat, but that's not economical in Frankfurt, "due to the high energy prices in Germany." Ireland currently faces a backlash against data centers, with utility Eirgrid due to restrict them in the Dublin area. Already, AWS has joined a district heating scheme there, offering heat to homes and offices in South Dublin.

With regulations pending, Europe’s data center operators lined up to promise carbon neutrality in the Climate Neutral Data Center Pact in 2020. It includes heat reuse in its promises, but only as a topic of discussion. “Data center operators will explore possibilities to interconnect with district heating systems and other users of heat to determine if opportunities to feed captured heat from new data centers into nearby systems are practical, environmentally sound and cost effective,” says the Pact’s site. Suddenly, electric heat is good It may seem an uphill struggle, but that could change, as national grids change in the fight against climate change. There’s a big drive to decarbonize, replacing fossil fuel where possible, with electricity from renewable sources. Along with transport, heating is a major area which needs decarbonization. In countries like the UK, more than 80 percent of homes are heated with gas. It’s been cheaper that way.. “Now, heat is a very valuable commodity, especially when made from electricity,” says Schulze. Cities that want to reduce their carbon emissions should be doing their best to redirect that heat to homes and businesses,

Circular Economy Supplement 15

"It’s not a problem of liquid cooling or whatever. It’s an economics problem. Just put a price on it and sell it to somebody who knows how to do it.”

where it can displace fossil fuels. But what about the economics that Tømmeraas found so difficult? “Data centers should be able to make money off it, that's no problem at all,” says Schulze. He says they are approaching it wrong. “I think that the data center sector has made one critical mistake,” he says. “They didn't put a price on the heat. They keep giving the heat away for free, which destroys the business of it. They should put a price tag on it.”

Data centers can’t build the whole heat recovery system, because a lot of it is in the district heat plants it plugs into. And energy companies will only invest to use that heat if they know it is a reliable source. If it is priced and valued, Schulze says, “an energy company can say, the heat we're getting from this data center is cheaper than what we are getting any anywhere else, so let's use the heat from the data center. But free? I can't put that in a spreadsheet.” The lack of price is more than cosmetic: “Right now, data center heat is free. But it

16 DCD Supplement • datacenterdynamics.com

comes with no guarantee of delivery. So it's the worst kind of product. You can use it whenever you want. But don't ask me if it works!” In the early stages, because of the infrastructure required, waste heat might have to be subsidized, in the same way as wind farms have been. says Schulze. “if I put a price tag on data center heat, then organizations like [SDIA] can lobby to put a subsidy on it, to make it the cheapest heat available in (say) the City of London. And then everybody will get the heat. you don't have to worry about building pipes and district heating systems, because it's economically the best thing to do.” Schulze sounds mildly irritated at the data center sector’s progress: “Everybody in the energy and data center is now an energy expert, right? But the fact is they don't know anything about it. It's not their business.” Summers agrees: “In my view, the only way we are going to solve the issue of heat reuse, is if energy providers get involved.” Apart from anything else, energy firms which deal in heat will know the difference between different types of heat distribution. District heating systems have been evolving, says Summers, and while third generation systems require input heat at high temperatures, fourth-generation systems are more forgiving: “A fourth generation district heating could be fed directly from data centers, if they use liquid cooling,” he says. Like many people, Summers makes a link between heat reuse and liquid cooling: “It’s the biggest driver for liquid cooling. I don’t really see any other benefits, because you can usually cool with air if you have a high enough air flow velocity,” he says, “...though sometimes that can make it hard to open the data center door!” Attack the economics Schulze says: “It’s not a technology problem, about liquid cooling or whatever. It’s an economics problem. Just put a price on it and sell it to somebody else who knows how to do it.” “There's one fabulous example,” he says: “If you take a satellite map, and go to Slough, it has the highest density of data centers in one spot worldwide. At the same time as the City of London is trying to get out of

Circular Economy Supplement gas for heating, you have a GigaWatt of heat generation capacity in Slough.” Each individual data center might have trouble justifying heat recovery, he says, but it’s a different story if they all say “we’ll sell heat at €30 per MWh,” he says “That’s at 40°C; if you want a higher temperature, it gets more expensive, because we're gonna have to buy a heat pump.” For his part, Summers thinks data centers shouldn’t be buying heat pumps - they are one more item which should be left to experts: “In all the projects I’ve seen that are successful, the energy provider is looking after the heat pump not the data center.” One example Summers cites is Facebook’s facility in Odense, Denmark: “The energy provider is putting in heat pumps, which makes sense,” In many cases he suspects a heat pump might not pass a full lifecycle jstification in terms of materials and plant. There could be a large amount of brand value perception in the calculation . Schulze says the energy suppliers could work out the return on collecting the heat: “If we can get heat from over there, then a pipe costs us X. And over the pipe, we can transfer this much heat. And that saves us this much gas and at the current gas price, well, hallelujah, we're saving a lot of money. Let's build the pipe!” AQ Compute’s Tømmeraas also thinks operators - and governments - should be involved, to level the playing field: “If you want to develop heat reuse everywhere, it should be on equal terms.“. Big pipes required But isn’t the temperature too low to be useful? Not if you invest, says Schulze: “When you transfer the heat through DIN600 insulated pipes, it does not get lost on the way. The energy sector solved that 20 years ago.” “Those really large heat pipes have to be a utility project,” says Summers. “It doesn’t make sense to ask data center to do this.” Of course, for utilities to invest like that, the heat will have to be reliable, says Schulze: “If it's profitable to build the pipeline, they will build the pipeline. But you have to guarantee that there will be heat for the next 15 years.” That’s not the way data centers think, as new generations of technology might change what heat is emitted, he admits: “But my point is, you can price all that in, right? If

it's difficult to guarantee that 15 years of heat will be available from the data center, then make the assumption that you're going to build a gas boiler in 10 years if you have to, and put that into the price tag. It’s just about economics.” The value of heat is always going to be small compared with the value from the computing generated by the same electricity, but even that small value will become significant, says Schulze: “I think that the overall margins of colocation are becoming more and more under pressure, especially because their customers are becoming larger and larger and have more and more power. The sector is developing into a commodity. If the revenue from heat makes a five percent difference in your margins, then in real estate that’s a lot of money.” Summers thinks the solution will be when we have energy providers who are also heat providers, as is often the case with Nordic utilities such as Vattenfall or Fortum, and they become a more integral part of data centers, handling backup and heat removal. “If a utility provides power as a service, the contract could also deal with availability and backup, and then can start to deal with heat recovery,” he says. Full contracts could work A full power-as-a-service contract would let the utility manage the UPS, as well as the power supply, paying the data center for occasional use of its stored battery energy to balance the grid. It could also let the grid siphon off heat, to offer to its energy customers as a way of using less electricity. “That could improve aspects of sustainability. But there’s a lot of confidencebuilding needed,” said Summers. “A lot of operators are happier to have full control over everything themselves.” Some data centers may be reusing their heat, but failing to help the environment. For instance, Facebook’s Lulea facility in Sweden is remote from large population centers that could make use of its 40MW heat output. Despite this, much of its heat is reused, within the building itself. “In winter, Facebook reuses 95 percent of its heat,” says Summers. “Hot air from the data center is mixed with incoming air to get a target temperature.” And the reason it needs this heat? It’s because the building is not designed to be

The value of heat is small compared with the value from the computing generated by the same electricity, but that small value will become significant as colocation margins are squeezed

well insulated. The data center is still losing heat to the environment, it’s just through the roof instead of through a cooling system. “Nobody insulates data centers, because they’ve got to manage a lot of heat,” says Summers. What else can you do with heat? Another approach to heat reuse is to leave aside the difficult question of delivering it warmth to hard-to-please domestic customers through a heating system, and go for industrial or agricultural customers with more predictable demands. These could include agricultural greenhouses, or sewage firms which use heat to dry and process sludge. Other uses for waste heat include drying wood pellets or warming water for fish farms. When AQ Compute found the district heating system tricky to justify, it has been looking elsewhere: “We are looking into other means like farming,” says Tømmeraas. In some cases, the data center can move in with the heat customer, and be located at a sewage farm or a liquid natural gas (LNG) terminal, where its heat helps built to regasify the fuel. German efficient computing company Cloud&Heat was ahead of its time. In 2014, it offered data center hardware packaged into boiler-like units to be installed in apartment blocks, which could use their heat. Since then it’s evolved to make shipping containersized, liquid-cooled HPC systems, where heat reuse is a standard option. It still offers domestic and office heating, for instance in a Frankfurt skyscraper that once housed the European Central Bank. But it’s also placing its HPC units, on sites including two 20ft units at a combined heat and power (CHP) plant run by Swedish energy firm Vattenfall, where the 500kW heat from their computational output can be readily put to use. “As the installation size is increased, it will strengthen the case for micro data centers and liquid cooling,” says Jens Struckmeier, Cloud&Heat founder and CTO. “Heat reuse is not always possible or easy to do in hot climates,” he says, but it can be offered to other customers. One Cloud&Heat project is partnering with a sea water desalination plant driven by excess heat from the servers. “It’s a very special application, because of the correlation,” says Struckmeier. In hot climates some data centers use water to cool them, he says “and these are places where drinking water is a precious resource.” Liquid cooling systems don’t consume water, he says, and partnering with desalination means they create potable water, rather than consume it: “It’s water and carbon positive.”

Circular Economy Supplement 17

Turn your ugly fat into data center power Data center diesels don’t have to run on fossil fuels. There’s a recycled product on offer

mong the possible ways to power a data center, it is unlikely that you will have considered used cooking oil. However, waste fat is a surprising source of renewable fuel, which could find its way into your data center’s backup power. Fuel made from recycled fats is already in use at data centers in London and Riga, where operators are using “renewable diesel” for the backup generators. In Latvia, data center operator DEAC is buying renewable diesel direct from its manufacturer Neste, in neighboring Finland.

In Harlow, UK, Kao Data is buying Neste’s hydrogenated vegetable oil through UK distributor Crown Oil to replace 45,000 liters of diesel initially and ramp up to more than 750,000 liters when the campus is fully developed. Lower emissions Vegetable oils make just as much CO2 emissions as fossil oils but, because the carbon has been captured by plants, they are considered to have fewer emissions than fossil diesel. As they often have 10 percent fossil fuel blended in, they are reckoned to have 90 percent fewer emissions than their

14 DCD Supplement • datacenterdynamics.com

Peter Judge Global Editor

fossil equivalent. The use of biofuels is as old as the diesel engine: Rudolf Diesel designed his engine for petroleum, but ran his first tests in 1893 using peanut oil. Because they are a simple replacement for fossil fuels, operators don’t need to replace diesel generators, a move that would use significant resources (not to mention money). However, some biodiesel is created from plants grown especially for the purpose using agricultural land which could feed people. Some biodiesel is made from palm oil, is often grown in land cleared from

Circular Economy Supplement rainforests. Using waste oil avoids the “food v fuel” criticism, and turns the biodiesel market into a circular economy. Backup Diesel generators are a small part of data center power, normally running for less than 24 hours per year during tests or small outages. However, if a facility wants to claim to be running on 100 percent green energy, then they should be considered. Replacing the diesels with fuel cells is an option, or else using gas generators, which can be switched to methane or green hydrogen. However, if the site has diesels, changing them is expensive. “In 2021, DEAC already switched to 100 percent renewable electricity from wind farms for managing the day-to-day data storage," said DEAC CEO Andris Gailitis. With renewable fuels in its diesels, he says DEAC can “mark the switch to 100 percent renewable energy sources." Neste is the world’s largest producer of renewable diesel and sustainable aviation fuel refined from waste and residues, with a revenue of nearly €12 billion ($13.4bn; for comparison, the total revenue of the oil industry in 2021 was $2.1 trillion). It has refineries in Finland, Rotterdam, and Singapore, and is planning to expand, as more feedstock becomes available. DEAC is Neste’s first direct partner in data centers, says Heidi Peltonen, who leads on sustainable partnerships in marketing and services at the company. "We are pleased that global data centers, the backbone of the digital world, are looking for solutions for a more sustainable future,” she said to DCD. “We’ve been focusing on road transportation and logistics emissions,” said Peltonen, “ but we now have off-road diesel.” That’s not a huge step, as the difference between on-road and off-road fuels is mostly in the tax regimes countries apply to the different applications. “We color the product for off-road use, but it’s very similar.” Data center operators are focused on reducing emissions, she says, because their customers are demanding it, and increasing the focus on their backup systems might inspire them to more sustainable operations. “There’s not a huge volume there, but it’s really important for that sector to make

actions,” she said. With other options such as fuel cells appearing, operators might not be aware of the change they can make without a massive hardware investment. “We need all the different solutions,” she said, “and what makes diesels so great is they are here right now.” There’s a long way to go before renewable fuels can fully displace the fossil equivalent, she accepts, but she thinks “it is happening already”. In transportation, Neste is running a partner scheme that combines charging stations for EVs with renewable dieselpowered vehicles. “Electric vehicles can cover as much as they can but even if newly registered cars are all electric or hybrid, there are still a lot of diesel vehicles, which need to turn into low emission, renewable diesels.” In the aviation market, Air Baltic is piloting the use of up to 20 percent renewable diesel: “It’s a big part of the energy palette in the future.” Palm off “During the first half of 2021, 92 percent of our feedstock was waste and residue,” she told us. That leaves eight percent from biofuel grown for the purpose, including palm oil, but she said: “We have promised to give up using palm oil in 2025,” The renewable fuel industry is actively looking at new feedstocks, which could in future include sewage sludge. This would have multiple benefits as extracting fats from sewage could avoid the formation of “fatbergs” that can completely block sewer systems. “We are collecting ten different kinds of raw materials round the world,” says Peltonen. “Here, the key is innovation to use different kinds of materials, and global sourcing, to try to find collection processes which are as elastic and flexible as possible. There is a lot of new waste to gather.” “There are potential new raw materials, coming from research and development, with some really strong future innovation platforms,” she said. Meanwhile, existing feedstocks have capacity to grow: “where there is potential to scale up, we are expanding our products.” Neste’s own processes obviously need energy, but the company plans to make its refineries carbon neutral production by 2035,

"We convert your raw material to renewable fuels and other products that help reduce reliance on fossil oil and greenhouse gas emissions in various areas of life"

Is there enough though? There’s a big question: can there be enough waste oil? On the face of it, there’s a lot less waste oil going around than the amount of fuel required. The US uses an estimated 160 million tons of fossil fuel for transportation and heating according to the Energy Information Administration, US Department of Energy. At the same time, the country products about 11 million tons of vegetable oil for all uses and 5.3 million tons of animal fat. In the US trials have made fuel from otherwise unusable chicken fat. Vernon Eidman, a professor of economics at the University of Minnesota who specializes in the biofuels industry, reckons that has potential. The United States produces more than a billion gallons of biodiesel, and could make half of it from animal fat, Eidman predicts. Currently, the waste fat is rendered down for soap and pet food, while biodiesels use highquality soybean oil. Give us your fat How does this market grow? As with all circular economy initiatives, there needs to be an active ecosystem, in which potential customers buy the recycled product, and those with waste material are rewarded for recycling it instead of throwing it away. Neste is trying to build that ecosystem, actively seeking firms that can supply it with feedstock, including used cooking oil, waste animal fat, and other renewable raw materials. “We are continuously searching for new suppliers of renewable raw materials to grow sustainably with us,” says the company’s site. “We convert your raw material to renewable fuels and other products that help reduce reliance on fossil oil and greenhouse gas emissions in various areas of life.” The company does not collect these raw materials, but if you have enough waste oil, and can get it to Neste’s facilities, then your ugly fat really could turn into data center power.

Circular Economy Supplement 15

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