I Don't Get It

I had some time blocked off this morning to finish off a post I’ve been working on about energy measurement, when IBM got me so confused with their announcement on Friday that I had to put my other project aside (there’s also a video here if you’re interested).

The announcement starts off simple enough: a) there are lots of opportunities to save energy and money in datacenters, b) customers want to validate that they’re actually saving energy. This makes sense. We’re seeing the same opportunities in our datacenters and in our customer’s datacenters, and we all want to make sure the savings are real.

The next step is where it gets confusing. Most of the people I know are having good luck reading monitoring their equipment, reading their electric meters and looking at their power bills to verify that they are in fact saving energy. But for some reason, IBM says that’s not enough. What you really need is an “IBM Efficiency Credit Certificate”, which are based on the relatively obscure concept of Energy Efficiency Certificates, which are the lesser known cousin of Renewable Energy Certificates, or RECs. And to do these, IBM has partnered with a (tiny?) company called Neuwing Energy, LLC.

Basically it appears that when you finish a project you pay Neuwing some money, which they turn around and pay to one of their verifiers (see their website), who then verify your efficiency gains. In exchange you get a certificate saying what you saved. In theory there is a market that you could sell or auction these certs off at, but after a couple of hours on the web I’ve been able to find out almost nothing. The presentation on Neuwing’s site says that the power companies in three states are required to deal in these, but there’s no evidence of a functioning market. Note that EECs are neither required nor sufficient to trade on the Chicago Climate Exchange, which is as close to a real efficiency market as we have in this country today. Nor are these required to report to EPA Climate Leaders or the Carbon Disclosure Project.

So I get the theoretical concept of EECs, though I’m unclear on the practical issues of their value and how you sell them. If you don’t plan to monetize them, it seems like a waste of time and money - there’s a lot easier ways to understand your energy savings than paying Neuwing. But that leaves me with some questions for IBM:

Does IBM endorse EECs as a full-blown public climate policy? Are they lobbying in Washington and in state houses across the country for a system based on EECs, as opposed to carbon cap-and-trade, carbon taxes or other market-based policies? Whether they wanted to or not, their announcement has brought this obscure cert to the forefront, and they’re telling their customers that they should be paying for these things. Is this what they really want to happen?

These things are so obscure that there’s lots of opportunity for misunderstanding, confusion and claims of greenwashing (just ask Whole Foods about their REC program). Is IBM really so convinced that EEC’s are good environmental policy and good for their customers that they are staking their green credibility on it?

Finally, these questions aren’t all rhetorical. I’d appreciate some real data on EECs, and if IBM or someone else with a datacenter has actually acquired some and sold them, I’d be interested in how it works and how much they were worth relative to the energy savings. Maybe this is the future and IBM’s just out ahead of everyone else. Or maybe it isn’t.