Green IT strategies will lay dormant during economic turmoil, but will not go away

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Green IT strategies will lay dormant during economic turmoil, but will not go away

Green IT should be more beneficial during an economic downturn but falling oil prices will make investments in green IT difficult to justify.

Green IT programmes cost money and a major aim during economic slowdown is to cut capital expenditure.

Recession makes mere survival a priority for company boards, and with oil prices falling, it is harder to justify spending money upfront to save energy.

Energy analyst Nigel Hawkins says if oil prices remain low there will eventually be lower-cost electricity. "When you have a high energy price you can justify green generation, but when prices come down certain green projects will not stack up."

According to Tony Baer, senior analyst at Ovum, environmentally-friendly IT will be hard hit by the dual effect of recession and oil price deflation in the shortterm.

"Perhaps no single planning IT objective was a greater casualty of the economic turmoil of 2008 than the cause of green IT," he says."It makes it much more difficult to justify spending money to make a datacentre more energy efficient if energy is low cost."

He says Green IT will take a backseat to cost-cutting and survival in 2009, but it will not go away.

Many businesses have drawn up green IT strategies. They include the introduction of technologies such as server virtualisation to reduce datacentre power use and videoconferencing to cut the amount of air travel required. Both cut costs as well as CO2 emissions.

Nick Claxson, managing director of Comtec Enterprises, which builds energy-efficient datacentres, says there has been a "pause for breath" among businesses in regard to their green IT strategies. "Leading up to Christmas the economic turmoil forced many companies put their plans on hold."

But he says now they have considered it the economic situation they realise they have to cut costs and see green IT as a way of doing this.

Businesses that have mature green IT strategies will benefit as the economy slows. HSBC has been implementing green IT since 2005. The bank set targets to reduce energy, waste, water and CO2 emission in 2005. It has since set targets to reduce the amount of energy it uses in IT by 8% and cut CO2 emissions resulting from IT by 6% by 2011.

At today's utility prices, HSBC's reduction in energy and water consumption has resulted in an average annual saving of more than US$11m across the group.

"There are many benefits to operating environmentally-sustainable IT systems, which are perhaps even more significant in times of a recession," says Matthew Robinson, manager for group corporate Sustainability at HSBC.

Despite banks across the world cutting costs, HSBC is accelerating its green plans. The bank submitted plans for a £300m, 325,000 square metre datacentre which will use environmentally-friendly IT and building methods. Less than 25% of the site will be built on, with the rest being used to improve ecological habitats and enhance wildlife.

The bank is considering using 100% green tariff electricity as well as an aquifer to provide renewable cooling and exporting waste heat to an adjacent public swimming pool.

"We believe you have to view environmentally sustainable initiatives in terms of their long-term value and return," says Robinson. "Having said that, a large number of these initiatives are cost-effective and provide HSBC with a short-term return on investment."

Green IT practices are here to stay, but now might not be the right time for many companies to implement them. Those that have already begun using energy-efficient IT will reap the benefits during recession and provide the perfect argument to those CIOs still trying to get their full plans approved.


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This was first published in January 2009

 

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