Toronto Hydro pays customers to power down

Toronto Hydro-Electric System Ltd. is offering financial incentives to companies that reduce their energy consumption in data centres.

“I’m in the unique position of saying, ‘I will pay you not to use our products. Not too many people get to say that,’” said Stephen Walker, director of IT Infrastructure at Toronto Hydro.

Companies will receive $300 per actual peak kilowatt reduction, up to 50 per cent of the project cost, in a one-year lump sum payment, said Walker. Ongoing savings in electrical bills can reach up to 30 per cent, he added.

The measurement and verification process is simple, according to Walker, and provided at no cost. “There’s no disruption to the organization,” he said.

Funded by the Ontario Power Authority, Toronto Hydro’s Data Centre Incentive Program (DCIP) targets commercial and institutional customers such as school and hospitals.

But any company – large, medium or small – that has a data centre can qualify for the incentive program, Walker pointed out.

“A gentleman just came up to me and said, ‘I only have 10 servers, would you help me?’ Absolutely,” he said.

Companies currently in the middle of their own virtualization and data centre consolidation projects are encouraged to get in with Toronto Hydro as soon as possible, according to Walker.

Walker suggested visiting, filling out the online application form and calling right away.

“Depending on the situation of that company, they may very well qualify. We don’t want them to wait until they finish,” he said.

Toronto Hydro will also “help them and offer some assistance on some of the strategies and engage other key partners,” Walker added.

One of the largest municipal electric distribution utilities in Canada, Toronto Hydro is in the middle of its own three-year virtualization strategy.

Walker presented Toronto Hydro’s efforts to virtualize the servers in its data centres at the VMware Virtualization Forum 2009 in Toronto.

“I’m not just going out there telling people what to do … I’m actually practicing what I’m preaching,” said Walker.

With two data centres in the GTA around 30 to 40 years old, Walker engaged help from VMware Inc.  

“We have over 750 server instances, of which 45 per cent are virtualized,” said Walker. His target is 70 per cent virtualization by Q2 of 2010.

Walker also presented a case study based on a DCIP pilot project between Advanced Micro Devices (AMD) Inc. in Markham, Ont., and Toronto Hydro’s sister company PowerStream Inc.

The overall incentives were well over $200,000, Walker pointed out. They went from 1,100 to 312 servers, from 23 to 12 racks, saw $170,000 in utility bill savings and received a cheque for $75,000, he said.

“We are doing it because it is far cheaper to have people conserve than it is to build new coal-fired generating stations that are not green and don’t encourage energy reduction,” he said.

The average data centre consumes 10 to 100 times more energy per square foot than a typical official building, according to a joint study by the Uptime Institute and McKinsey & Co. released in July 2008.