Navigant Research Blog

The Rise of the Modular Data Center

— November 30, 2011

The Green Grid has produced a useful guide to what it calls Containerized Modular Data Center Facilities, which recognizes the increasing interest in modular design and how it can help improve energy efficiency in data centers.  I’ve tackled this subject in a previous blog  but chairing the recent Green Data Center conference in London, I had the chance to hear in detail about two very different approaches to modularized design. 

The first example was Verne Global’s new data center campus in Iceland.  In a project we documented in our Green Data Center report (soon to be updated), Verne Global is taking advantage of Iceland’s climate and copious hydroelectric and geothermal energy resources to create a low-emission, energy efficient data center.  The data center facilities are being supplied by Colt, which is providing pre-fabricated data center modules built in its factory in northeast England.  It’s using standardized components and production line manufacturing techniques to deliver energy efficient and adaptable data centers in less than four months from contract signing to onsite commissioning.  The modules are expected to work to a Power Usage Effectiveness (PUE) of around 1.15 in the advantageous Icelandic environment.

While Colt’s modules are able to meet the variable demands of a co-location data center, a more specialized approach to modularization is being pioneered by Taiwan’s Industrial Technology Research Institute (ITRI).  The background to this project is the investment the Taiwanese government is making to prepare the country’s businesses for the impact of cloud computing.  For example, a number of projects are looking at the cloud delivery of government services.  It is also looking at how cloud computing can drive innovation in the Taiwanese IT and services sector, which brings us to the green data center project.   ITRI has been tasked with developing an energy efficient modular data center that can support cloud computing. 

As Paul Sun from ITRI explained, building an energy-efficient data center in subtropical regions presents significant challenges; with a typical humidity level of 70%, Taiwan is a far cry from Icelandic conditions.  To achieve the target PUE of less than 1.3 they had to rethink how a data center is built and how it operates.   The radical idea behind the project is not to think of the data center as a building to house IT equipment, but as the computer itself.  This led to the development of a virtual management layer for the building facilities and an approach that seeks to unify the facilities and IT views of the data center.  ITRI has been able to come up with a data center design that optimizes both infrastructure and server capability.  The servers themselves are stripped down to the essentials including the removal of individual power supplies and fans.  A direct DC power supply was also used to increase power efficiency.  However, high density computing in a subtropical climate requires efficient cooling and this was provided by liquid cooling at the CPU level. 

Much of what ITRI did in this impressive demonstration project will be out of reach for enterprise data centers, but the project shows the way cloud computing brings opportunities for efficient data center design.  It also shares with Colt’s approach a rapid development time – 6 months from planning to operation – and provision of shippable modules than can be quickly installed onsite.

While Colt is developing modules for the mainstream data center market, ITRI is pushing the boundaries to understand how the data center can be optimized for cloud computing and energy efficiency.  However, both projects are part of an important development that will have an increasing influence on the shape of the data center. 


Industrial Control Security – What’s Missing?

— November 30, 2011

Earlier this month I spoke at the European Smart Grid Cyber Security and Privacy conference in Amsterdam.  My theme was, “What are people telling me in my research?” and the focus was industrial control systems.  I suspected that this would be well-received because that’s what people always ask me:  What are people telling you?  And I was right.

The answer, though, was “Many different things.”  I reviewed results from about 30 research interviews where I had asked the question, “What is the #1 worst problem facing Industrial Control System Security?”  My research subjects included utilities, systems integrators, cyber security vendors, industry specialists, and device manufacturers.  From those 30 interviews I received 23 distinct answers, ranging from “Too much Linux!” to, not surprisingly, “There’s no consensus.”

On the positive side, quite a good mix of well-tested and new breed technology has been installed into ICS networks, including ruggedized devices, identity management, role-based access control (RBAC), ICS-aware network security, unified threat management (UTM) systems, data diodes, set-and-forget technologies, application whitelisting, antivirus, lots of encryption, hardened operating systems, security event management, and hardware security modules.  That’s a long list.  In fact, when I ask the question, “What technologies for control system security are missing?” the answer is often: none at all.

Unfortunately, some really important things are missing.  In control systems it’s extremely rare to find a cyber security architecture.  For that matter, many control networks are not even mapped accurately, as they may have evolved over several decades.  Other than within defense agencies, I have not encountered any control systems with a true asset-based risk analysis – nor have the research contacts that I’ve asked.  Change management and patch management remain incredibly challenging.  And there is nothing yet like a NOC or SOC for a control network, though that cannot be too far away, since enterprise networks already do them frequently and well.

So if we combine the positives and the negatives, our present situation is about like this art installation of a deconstructed Honda Formula 1 car.  We’ve got great components, but we’re missing the glue.  There’s no way, yet, to make all those great components work together to achieve the desired result.

A recent special report in the Financial Times characterized cyber security as “a war marked by fatalism and denial.”  That’s unfair given the amount of hard work being done by so many talented and committed professionals in control systems cyber security.  But yet – we present the impression of having very little in place.  This month’s hacks against water utilities are yet another stain on our record.  And it is our record we’re talking about here – not some government agency, not some control system vendor.  The public only discerns that cyber security isn’t protecting the infrastructure – they are not interested in the details.  We succeed or fail together.

Until we can (a) glue together these great components into solutions that really are end-to-end, and (b) stop viewing the problems as someone else’s, we should resign ourselves to more gloomy headlines.  And executives continuing to ask what exactly they are getting for their security dollar.


Segmenting the Smart Grid Customer Base

— November 28, 2011

“Know your customer” is one of the basic tenets of marketing.  But how well do U.S.  utility managers know their customers and what they think about energy and smart grid technology? A new study from the SmartGrid Consumer Collaborative (SGCC) offers insights into customer attitudes regarding energy use, and lays out a “segmentation” scheme that is worth considering.

U.S. consumers fall into five main groups, according to the SGCC survey, which was conducted by Market Research International:

  • Traditionals (11%) are not sure the smart grid is needed and want things to stay the way they are
  • Easy Street (20%) consumers have the highest income of any segment and are reluctant to change their personal behaviors
  • DIY & Save (16%) consumers are frugal and have a do-it-yourself lifestyle; their main concern is providing for their families, and not global environmental issues
  • Concerned Greens (31%) are most protective of the environment and supportive of smart grid initiatives; they’re highly likely to participate in energy management programs
  • Young America (23%) consumers don’t know much about smart grid but are interested in learning about its potential for environmental benefits and cost savings

The purpose of developing this breakdown is to help utility managers and regulators see a new way forward with smart grid rollouts and to give them an “actionable” framework with regard to consumer engagement, says Patty Durand, executive director of SGCC.  Utility managers have to think differently about customers, she adds.  They need to understand what people think, need and want from the smart grid – a level of consumer understanding that has been missing so far.

A Consumer-Centric Smart Grid

Durand’s goal is to see the smart grid become very consumer-centric.  “We are on the front end of a major transformation and people need to be engaged” in ways they have not been in the past, she says.  This segmentation is a step in that direction, giving utility managers some engagement and marketing tools they haven’t had before.

Durand says SGCC will continue taking the pulse of consumers and she is thinking of turning the segmentation research into a seminar next year aimed at fueling more action from utility officials.

 Takeaway: This type of segmentation is a welcome starting point for the utility industry.  But why wasn’t this kind of study done years ago? Is it any wonder so many people know so little about smart grids? The segmentation itself is fine, too, as far as it goes.  But savvy managers will use it as a launching point for deeper understandings about their own customers.  Utility customers can be very diverse.  A “traditional” in one region might look and act very differently in another; and reluctant “easy streeters” could be convinced otherwise with a distinct message that is better tailored to their unique set of beliefs.

(For more on new forms of consumer engagement, check out our report Social Media in the Utility Industry, which offers best practices and strategies for utility managers seeking ways to harness Twitter, Facebook, and YouTube.)


Advanced Biofuels Industry Digs In For the Long Haul

— November 28, 2011

Facing an uncertain future with biofuels policy under scrutiny, the advanced biofuels industry convened for a three day conference in San Francisco earlier this month.  Jointly organized by Green Power Conferences and Biofuels Digest, the Advanced Biofuels Markets conference is one of the few industry events bringing together industry leaders from all shades of advanced biofuel interests – algae, cellulosic biofuels, advanced biodiesel, aviation biofuels, and others – as well as key public-sector stakeholders. 

Coming off several years of steady industry growth but facing a difficult 2012, Advanced Biofuels Markets 2011 was tinged with exigency.  With deficit reduction at the forefront of policy objectives for Congress, a reexamination of cornerstone policies supporting biofuels growth is expected.  At risk of being scrapped altogether, the checkerboard foundation of biofuels policy initiatives spanning EPA, USDA, the Department of Energy (DOE), the Department of Defense, Treasury and others – including RFS2, Title IX programs under  the Farm Bill, DOE loan guarantees, VEETC, etc. – may be placed on the chopping block one by one (or in the most dramatic scenario, slashed all at once). 

What does this mean for an industry on the cusp of commercialization, but still a few nickels to several dollars shy of price parity with a gallon of petroleum fuel?  For the most part, it adds a great deal of uncertainty, making an already difficult financing story even more risky for would-be investors.  In the more extreme case, the sentiment among conference panelists was that the industry is now fighting for its future existence in the U.S.

The Lost Years

With an unresolved deficit crisis casting an ominous shadow over 2012, the coming year is shaping up to be challenging for advanced biofuel companies still navigating the funding “valley of death” and facing a particularly daunting scale-up challenge.  Just as many advanced ethanol projects are beginning to break ground, a number of incentive and loan programs are likely to be nixed.  Energy provisions in the 2012 Farm Bill are of primary concern.  Programs, including USDA loan guarantees for biorefinery projects, Biomass Crop Assistance Program (BCAP), and Rural Energy for America Program (REAP), are all critical lifelines for an industry still looking to establish a foothold.

Addressing the so far undelivered promise of cellulosic biofuels – biofuels derived from the lignocellulose portion of plant matter – Alan Shaw, CEO of Codexis, explained that the technology is “late to its own party.”  After lobbying for nearly a decade for R&D funding, inclusion in biofuels mandates, and subsidy parity with conventional biofuels, the cellulosic biofuels industry has received a great deal of support over the last couple of years.  While not necessarily on equal footing with conventional (corn-based) ethanol, cellulosic biofuels were given a commercialization runway to 16 billion gallon by 2022 under the EPA’s RFS2 mandate.  But only a few million gallons of cellulosic biofuels have been produced and the first facilities are still under construction, forcing policymakers to question the viability of the technology in the near-term. 

The failure of cellulosic biofuels to capitalize on its opportunity thus far has led to increased attention to technologies such as pyrolysis and thermo-catalytic or advanced sugar fermentation.  As a result, cellulosic biofuels – once the priority advanced conversion pathway for the DOE – are now finding it difficult to raise capital to support widespread scale-up.  Many panelists at the conference concurred that it’s time to deliver or risk losing priority status among advanced biofuel conversion pathways.     

In our Biofuels Markets and Technologies report, we forecast growth rates in the U.S. biofuels industry to lag behind other regions.

“Don’t Mess with the RFS”

Of particular concern among industry stakeholders at the conference is the battle to hold the line on the EPA’s RFS2 biofuels mandate, which aims to boost biofuel production in the United States through 2022.  Although RFS2 has proved to be a complex rule to implement, it is one of the few mandates worldwide that carves out specific volume requirements for various biofuel conversion pathways.

While some in the advanced biofuels industry are calling for opening up the mandate to more advanced pathways (such as algae-based biofuels, waste-derived fuels, etc.), most warn that doing so would mean opening up the standard entirely, which could jeopardize its continued existence.  In any case, within the broader battle for favorable treatment of advanced biofuels in Washington, RFS2 is seen as the last line of defense for an industry still struggling to gain a foothold.   

Key Takeaways

To turn the corner on advanced biofuels commercialization, conference panelists urged producers to remain flexible with respect to feedstock and end-product.  With policy up in the air, the ability to shift production to advanced chemicals, aviation biofuels, and ground transportation fuel depending on market forces and prevailing policy sentiment will make projects a far more attractive bet for skittish investors.  Partnering, especially with oil majors, multinational chemical and consumer product companies, and other end-market players, is increasingly seen as the way forward in a challenging financing environment. 


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