Plugging the Internet into clean power

They are the factories of the Internet economy. US data centers and servers now consume more electricity each year than the entire state of Colorado. In five years, they could require nearly twice as much juice.

And while these data centers don't have smokestacks, many are spewing out greenhouse gases through the electricity they burn. Sensing high-voltage perils to both their public image and bottom line, Google announced Tuesday it will plow $100 million into the research and development of alternative energies.

The move is part of a broader high-tech industry scramble to secure reliable sources of electricity and to use it more efficiently. While worries about global warming factor in the equation, some analysts say major companies are also concerned that electricity could become a limiting factor on their growth.

"What Google has been doing over the past couple of years reflects a concern in the larger IT industry. 2007 is probably going to be looked back on as one of the greener years in data center history," says Charles King, principal analyst at Pund-IT, Inc. in Hayward, Calif.

By 2010, up to half of all data centers will be located in places where supplying the needed power will be a problem, says Mr. King. "There's a recognition that availability of electricity does have its limits."

But the demand for data centers – and by extension more electricity to power them – is only going up. It's driven by everything from the popularity of online video to new financial record-keeping requirements for businesses.

Top Internet companies including Google, Microsoft, and Yahoo are beating paths to the Pacific Northwest to build data centers along the Columbia River to tap into the area's abundant hydro and wind power. Search engine Ask.com just opened a new data center in Moses Lake, Wash. The carbon-free, renewable, and cheap hydropower advances both environmental and cost-cutting goals, says spokesman Patrick Crisp. Another bonus: The colder climate reduces energy needed to cool the servers.

Google has also tapped cheap energy in the Midwest and the South – from coal. That appears to have irked the company's founders. "We feel hypocritical as a company, so we want to make the investments so that alternatives are available down the road," said Google cofounder Sergei Brin at a press conference in Mountain View, Calif., Tuesday. The founders outlined their vision to hire 20 to 30 clean energy whizzes and invest in solar-thermal, wind, and geothermal technologies. The goal is simple: Make renewable energy as cheap as coal.

Most analysts saw the move as a mix of public relations and an earnest long-term strategy – though some doubt companies like Google truly face an energy crunch.

"I don't believe in a widespread data center power crisis or other inflated statements," says analyst Chris Mines of Forrester, a market-research company in Cambridge, Mass., via email. "That is a specific problem that some companies face in particular geographies like London and other old center cities." [Editor's note: The original version misidentified Mr. Mines.]

Regardless of electricity supply, Google and other tech giants have serious fiscal reasons to go green. There's a huge expense for companies when computing and storage demands max out individual existing data centers. "The energy density of the servers is so high that the cooling capacity and the power capacity of existing data centers are running [out]," says Rich Brown, a research scientist at the Lawrence Berkeley National Laboratory in Berkeley, Calif. To forestall having to spend major capital on new data centers, companies are aggressively pursuing energy-efficiency measures. These efforts include upgrading equipment, redesigning air-flows, and reprogramming machines to handle more computations at the same time.

This summer dozens of technology giants including Google, Intel, Dell, IBM, and Microsoft launched the Climate Savers Computing Initiative that commits members to energy-efficiency targets.

But there are still lots of inefficiencies to squeeze out, says Mr. Brown. His team analyzed data center energy use for a congressional report given by the Environmental Protection Agency this summer. "We were really shocked when we dug into this and found out how inefficiently those centers were being operated," Brown says. He estimates small changes could cut energy use at these centers by 20 percent.

However, streamlining can only go so far in offsetting rapid data-center growth. Not only is Google growing extremely fast, it has also pledged to become carbon neutral – a goal forcing them to buy either renewable energy or expensive carbon offsets.

"Google is finding out that making renewables a bigger part of their energy portfolio is really expensive right now," says Brown. Hence the drive for price parity with dirt-cheap coal.

Google's investment is not overwhelming in dollar terms for the clean energy sector, note experts. Last year, $100 billion was invested globally in clean energy, according to Ron Pernick, author of "The Clean Tech Revolution." But Google's announcement is significant for its ability to mainstream the idea that wind and solar can cost as little as coal.

"They've set the bar high and they've given a clear objective, and I think that's what's important about their announcement today," says Mr. Pernick.