Data center operators can also invest in their own renewable energy systems to reduce their dependence on the utility grid for electricity.
While wind and solar are the most typical forms of renewable energy, San Jose-based eBay is in the process of installing fuel cells as an alternative to the utility grid's power at a data center the auction site operates in Utah.
"Our Utah facility is our most carbon-intensive location, it's something like 94 percent or higher coal-based," says Jeremy Rodriguez, a distinguished engineer in the Global Foundation Services unit of eBay. "Onsite generation is new to us. We're just getting our first fuel cells landed at the location and soon we'll tell the world how they are going to work."
It's too soon to tell precisely how California's new law will affect data center power costs because of many variables, says Grice. It remains to be seen how many plants will exceed the carbon emissions caps and what their costs will be in the cap-and-trade market. But it's something data center operators need to watch closely.
The impact of the law on data centers will also vary based on their location in the state and which utility serves them, the utility's cost structure and how much of its electricity is generated by renewable energy instead of carbon-based fuels, says Akamai's Piell-Moelter.
Finally, data center operators and utilities outside California shouldn't consider themselves off the hook. Instead of waiting for the U.S. Congress to enact climate change legislation nationwide, President Obama announced a directive in a speech on June 25 for the U.S. Environmental Protection Agency to work with states, industry and other stakeholders to regulate carbon emissions, first from new coal-fired power plants, and then from existing plants.
"Now that the Obama administration has directed EPA to put greenhouse gas regulations on all power plants, then all states will face similar costs before too long,'' says California Air Resources Board spokesman Dave Clegern.
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