Towards an Optimal Investment Budget for Green Data Centers

The growing demand for data storage and computational power has increased the global deployment of data centers. Today, data centers are the backbone of modern companies, but also main consumers of energy and among the major producers of greenhouse gas emissions. Therefore, the development and implementation of sustainable and energy efficient Green Data Centers (GDC) has gained relevance from a scientific and practical point of view. Even though technological progress has revealed opportunities for improvements in energy efficiency, little effort has been made regarding the business case of GDC. In this paper, we analyze the coherence of economic and environmental objectives of GDC investments by conceptualizing a decision model using traditional financial metrics and by applying the model on exemplary data. We analyze both costs and realized energy savings associated with the GDC investment. Besides, we examine the influence of volatile energy prices on the investment decision. By integrating risk and return into one decision calculus, we determine the optimal GDC investment budget which reconciles long-term economic and environmental objectives. Our theoretical findings are supported by an application example of a GDC investment project. We hereby demonstrate the structural under-investment when disregarding volatile energy prices in decision-making.