KPMG Captures Heat for Data Center Cooling

In the leafy borough of Montvale, New Jersey, near the New York State border, containers resembling oversized refrigerators stand on skids outside the U.S. administrative headquarters of international accounting and advisory fir­m KPMG. These are the buzzing accoutrements of a simple but powerful system that allows KPMG to squeeze more work out of every dollar spent on energy.

The energy system at KPMG's suburban data center-winner of a U.S. government Energy Star award this month-is an example of combined heat and power (CHP), also known as cogeneration.

(Related: "Tapping into the Electric Power of Heat")

CHP is a "proven, reliable and cost-effective" set of technologies that could be much more widely deployed worldwide to save energy and cut carbon emissions, the International Energy Agency says.  But the IEA has identified numerous barriers that prevent CHP from taking off, from outdated electricity regulations to financing difficulties. (Lenders often want to see a shorter payback period for such investments.) The IEA concluded that strong government policy on energy and climate change may be necessary for CHP to reach its full potential.

But KPMG, certainly no stranger to numbers-crunching, showed that the obstacles can be overcome, even in a nation that has not yet set targets for reducing carbon emissions. And the firm did so by taking one of the business world's growing energy challenges-the power demands of computer data centers-and turning it into a solution.

Chilling Out

An integral part of KPMG's operations for providing tax, audit, and advisory services around the world is a 30,000-square-foot (2,790-square-meter) data center, housing about 2,250 servers. It's small compared to server farms of the Internet giants, where racks hold tens of thousands of servers. But for KPMG, the energy demands are significant; half of all of the energy used at the Montvale facility goes to keeping the server room cool.

Enter the fourteen natural gas-powered micro-turbines (housed in those large fridge-like cabinets) that KPMG installed in 2008. Altogether, they pack 840 kilowatts of electricity capacity. Even keeping two of the micro-turbines offline and in reserve, the capacity (then 720 kw) is enough to provide half the power needs of the data center-5 million kilowatt-hours per year, or the energy consumption of about 450 average U.S. homes.

The exhaust from this miniature power plant reaches a sweltering 600°F (about 315° C), but instead of being vented to the atmosphere, this valuable waste heat is captured and piped from the turbines to the remarkable equipment that extracts its true worth: a pair of absorption chillers.

Absorption chillers are hardly new; they've been in commercial use since the 1920s.  But they are considered pricey, and need a lot of heat to work their magic-turning heat into cooling. Instead of using an electric compressor to turn refrigerant from a gas to liquid to begin an evaporation cycle that removes heat from air, absorption chillers use heat-no moving parts-to drive the operation.

(Related: "Pictures: In Search of Green Air Conditioning")

These chillers provide the air-conditioning that keeps KPMG's servers in a safe temperature range. "In effect, we're getting free cooling," said Dominick Regina, KPMG's associate director of infrastructure operations. As Regina puts it, for every kilowatt-hour of power, KPMG would normally need another kilowatt-hour for cooling.

It turns out that because data centers are much more energy-intensive than typical commercial buildings, and because servers generate so much heat, a CHP system combining on-site electricity generation plus absorption chilling is tailor-made to address the server cooling problem. The U.S. Environmental Protection Agency (EPA) counts at least 16 commercial data centers in the United States using CHP, representing a total capacity of more than 16 megawatts.

KPMG's cogeneration system, one of six projects recognized this year with the EPA's CHP Energy Star award for "outstanding" pollution reduction and energy efficiency, is not perfect. Some energy is still wasted as heat. But it requires 22 percent less fuel than an energy supply system tied to the grid, and prevents some 2,200 tons of carbon dioxide emissions per year, according to EPA.

Think of it this way: Of all the energy put into a traditional fossil-fueled power plant, about two-thirds of it is typically thrown away as heat. Another 9 percent is lost during transmission and distribution. Having a combined heat and power system situated close to the end user drastically reduces this waste. According to the International Energy Agency, the most efficient cogeneration plants today convert 90 percent or more of their fuel inputs into useful energy.

Untapped Potential

The relatively constant power and cooling requirements of data centers make them particularly well suited for combined heat and power. But KPMG's data center is just one application of a technology that has been around for decades longer than computers. Cogeneration can also cut energy needs and costs in applications ranging from multifamily residences to hospitals, office buildings, and manufacturing plants, says Neeharika Naik-Dhungel, program manager for EPA's CHP Partnership. "That's the beauty of it."

Among the 76 projects that EPA has honored since 1999 are power plants and university campus installations, as well as factories, a milk pasteurization and bottle-washing facility, and a prominent office building in downtown San Francisco.

Glance across the Atlantic, and 20 miles outside Reykjavik, Iceland, you'll find engineers working to add more heating capacity to a geothermal-fueled cogeneration plant. Seeking to meet growing demand for electricity and hot water for space heating, plant owner Reykjavik Energy plans to bring the total heat capacity to 400 megawatts, from about 130 megawatts heating and 300 megawatts electricity capacity today.

Globally, cogeneration accounts for about 10 percent of electricity generation capacity. Denmark leads the world, with combined heat and power accounting for more than half of its national power generation, according to 2008 data from the International Energy Agency. Finland follows with nearly 40 percent. Russia, Latvia, and the Netherlands all come in around 30 percent. Then there's a steep drop-off.

(Related: "Four Ways to Look at Global Carbon Footprints")

Being neither here nor there on the spectrum of energy efficiency and generation creates policy hurdles for cogeneration in some countries, including the United States. Naik-Dhungel said in an interview that a CHP system "does not qualify as a 'standard' energy efficiency measure, such as energy-efficient appliances or building codes." She went on, "A CHP system that produces both power and heat, produces fewer greenhouse gas emissions than a comparable separate power and heat system." But power plant and utility policies typically fail to capture these benefits, she said.

For KPMG, incorporating cogeneration into the design for its Montvale data center was a way to "eat our own dog food," according to Regina. After all, KPMG's wide-ranging services include a carbon advisory practice. (When Yvo de Boer stepped down from his post at the United Nations, where he oversaw four years of fraught climate negotiations, he joined KPMG as an adviser in the company's climate change and sustainability group.)

(Related: "Climate Change Talks Hinge on 'Green Growth,' says DeBoer")

Beyond the potential to use its headquarters as a showcase for energy efficiency and emissions reduction measures, the cogeneration system also seemed to KPMG like a smart way to reduce its carbon footprint. While the Montvale facility was being designed, Regina said, "there was a lot of talk of carbon credits and reporting . . . If we're going to report on our carbon, we want to look good." Eying its energy-hungry data center, KPMG became interested in "anything we [could] do to make those numbers look good, less polluting, more efficient."

Of course, these benefits made a greater impression because combined heat and power also makes sense for the company's bottom line. KPMG spent $2.4 million implementing the system upfront, and received nearly $900,000 in credits through New Jersey incentive programs for clean energy. The company expects to recoup the remaining investment by 2013 or 2015 (a five- to-seven-year payback period), depending in part on the size of the gap between grid electricity rates and KPMG's locked-in natural gas rate.

KPMG believes the business case for using cogeneration extends beyond the direct savings on energy costs. The system also helps to boost the resiliency and reliability of the Montvale data center. In the event of a "doomsday scenario," in which coal-fired electricity from the utility and diesel-powered generators both cut out at KPMG's facility, the natural gas turbines could keep critical servers running, Regina said.

Indeed, the EPA, in touting CHP with locally produced energy for data centers, notes that power outages or lapses in power quality can cost as much as $30 million per minute for data center operations during peak periods.

On a daily basis, cogeneration operates behind the scenes in Montvale. The micro-turbine manufacturer monitors system output, temperature, and other performance factors, and can dispatch technicians if necessary. KPMG has specialists on site, Regina said, "keeping a pulse on the environment" of the data center. So for KPMG, the cogeneration system is hardly an inconvenience accepted for its green credentials. Rather, according to Regina, "It's just another piece of infrastructure."

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This story is part of a special series that explores energy issues. For more, visit The Great Energy Challenge.