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Greenpeace’s Misdiagnosis

A couple weeks back, Greenpeace released a report that draws attention to energy consumption patterns and choices in the IT industry. From the executive summary:

A quick glance at the letter grades on our Cloud Energy Report Card (found on page 7 of this report) indicates that many IT brands at the vanguard of this 21st century technological shift are perpetuating our addiction to dirty energy technologies of the last two centuries. We analyzed the data centre investments of 10 top global cloud companies and our findings show a trend across the industry towards extolling the external effects of IT products and services, while failing to take seriously the need to power this widespread aggregation of the world’s information with clean, renewable electricity.

While the report has drawn criticism, it actually does have some kind things to say about the IT sector’s energy efficiency efforts, and rightly so (the Digital Energy Solutions Campaign is a great resource for more on these efforts). But the real thrust of the report is to criticize the industry’s energy choices, while also calling for more “transparency.” On this issue, the report loses some of its value. Again, quoting the report:

For the global data centre operator that has a range of options to choose from, location is the single biggest determinant of whether clean or dirty energy will be used to power their data centre. Global brands should use their buying power to drive utilities and governments toward the development of cleaner generation mixes by voting accordingly within their site selection region.

Ultimately, Greenpeace is calling for the IT industry to locate its data centers in areas that offer access to low-carbon sources and seek power-purchase agreements for more clean energy, or to make use of Renewable Electricity Certificates to purchase green power, or to simply install and run distributed renewable energy onsite.

It’s all fine and good to ask IT companies to do more of this sort of thing, but it really seems like Greenpeace is getting their logic backwards. The fundamental problem is not that too many businesses are buying fossil energy. The problem is that clean energy is too expensive. If I’m a typical business owner, there is virtually no economic reason why I’d want to pay 12 cents per kWh for wind power when I could buy coal or gas power at 6 cents. So Greenpeace could request every industry on the planet, not just IT, to buy more clean power, cross their fingers, and hope for the best.

But relying on private industry to freely act against their economic self-interest and substantially increase their energy costs is not a strategy for success. A better solution would be to focus like a laser on how to make clean energy cheap enough to power the world, and seek policies that actually achieve that without reducing competitiveness and costing people jobs. The real victory over dirty energy will come when private business can buy clean power not because it’s the right thing to do, but because it makes economic sense. I’d urge Greenpeace to think a little deeper along these lines.

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  • BarryRGreene

    The companies mentioned in the Greenpeace report are NOT using a pure cost per kWh in their decisions for placing data centers. That would be the shareholder’s best interest. Data centers are huge long term investments. They look at a range of factors – especially with the balance of cooling and power. They understand the current skew in the cost per kWh with the US subsidies for coal. Check out for one illustration. The Office of the President proposed cutting – given that today we cannot afford the subsidies: “Eliminating 12 tax breaks for oil, gas, and coal companies, closing loopholes to raise nearly $46 billion over the next decade.” .p22. In addition, OMB pointed out that the US government does not collect its fare share of mineral extraction where “taxpayers could earn a better return through more rigorous oversight and policy changes, such as charging appropriate fees and reforming how royalties are set.” .p22Find out the information about all the overt and hidden subsidies is not rocket science. They are lobbied into the Government. They are a benefit for profit. They can be removed, then impacting priced. High Tech companies know this. So you work that into the one of the factors for long term viability into the data center’s site selection.So in one way, Greenpeace got it wrong, looking that the short term factors. In another way, the statement that “clean energy is too expensive” is also wrong. Once needs to start digging into the work these companies are doing with fuel cells, waste heat reuse, and a variety of other factors that get more efficiency of processing/bandwidth per kWh.This chart is a good one to point out the impact of “waste” heat in our energy ecosystem:

  • Matt Hourihan

    Actually, eliminating fossil fuel subsidies does nothing for energy prices – and hence, their removal doesn’t magically make fossil energy more expensive than renewables. Oil is priced on the world market, and taking away subsidies would yield a blip, nothing more. Same story with coal subsidies: it’s a huge industry and the public dollars subsidizing it are relatively small by its standards (though large relative to cleantech subsidies). So, yes, most unsubsidized clean energy is uncompetitive with unsubsidized fossil energy, and this isn’t a particularly controversial statement.