Developing a Green Bond Fund strategy to fund university & NREN

infrastructure and networks

October 2016Bill St. Arnaud

Bill.st.arnaud@gmail.com

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Executive Summary• Green Bond Funds are becoming an increasing popular way to pay for new

university infrastructure and research

• Green Bond Funds are loans from financial institutions, funding councils or university endowments that are paid back through energy savings in new building design, use of renewable power, etc

• ICT consumes 20-40% of electrical power at R&E institutions. Low hanging fruit in terms of cost savings through reduction of energy consumption

• NRENs role is to provide network solutions to reduce university ICT energy consumption and CO2 emissions and aggregate multiple projects into a single bond offering

• Research into new Internet and Energy network architectures will also be required

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Green Bond Funds• Fixed-term investments designed to create steady, if unspectacular, returns by lending money

to sustainable energy or infrastructure projects.

• Green bond market is exploding. In 2014 alone, more than $35-billion (U.S.) worth of bonds specifically designated as “green” were sold, up from $11-billion in 2013. The 2015 estimate is $100-billion.– http://www.theglobeandmail.com/globe-investor/green-bond-market-is-exploding-but-limited-to-individual-investors

/article22221476/

• Green bonds provide investors with a way to earn tax-exempt income and gain the satisfaction of knowing the proceeds of their investment will be used in a positive manner.

• Several universities have already issued Green Bond Funds for new buildings and research infrastructure e.g. Indiana, Cincinnati, etc

• Several funding councils and endowments are looking at Green Bond Funds as a vehicle to fund networks and education infrastructure e.g. University Presidents Climate Commitment

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How to Raise Trillions for Green Investments

• NYTimes– http://mobile.nytimes.com/2016/09/20/opinion/how-to-raise-trillions-for-green-invest

ments.html

• China has declared green finance a “strategic imperative.”

• China recently began an initiative to raise private capital through the sale of green bonds. After just six months, these bonds now account for 40 percent of the global market. Recent guidelines issued by the government outline an ambitious road map for creating green lending, environmental stress tests, benchmarks to ensure credibility of green investments, disclosure requirements and innovative public private partnerships.

• NRENs and universities need to start to develop strategic plans on how to use Green Bond or Revolving Door Funds to pay for network and computing infrastructure

• Full implementation Guidebook for universities to implement Green Revolving Fund– http://greenbillion.org/resources/

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Green Bonds for Universities• To issue a Green Bond university must articulate business case for energy savings that will

enable payback of bond

• ICT is low hanging fruit in terms of energy savings and using solar power and provides easiest business case for acquiring Green Bond

• CSA has developed Green IT protocol to allow networks and data centers to qualify for Green Bonds http://shop.csa.ca/en/canada/climate-change/ict-protocol-version-1/invt/27033222012

• Green Bond or Green Revolving Funds can be issued by financial institutions, endowment funds and/or funding councils

• Example: The University Billion Dollar Green Challenge– http://greenbillion.org/the-challenge/

• Complete how to guide book for universities– http://greenbillion.org/resources/

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Complete Implementation Guidebook• Combines the expertise of energy professionals and college

administrators from dozens of institutions to establish best practices for designing and managing green revolving funds (GRFs).

• The resource is a co-publication of the Sustainable Endowments Institute (SEI) and the Association for the Advancement of Sustainability in Higher Education (AASHE), and was developed with the consulting firm ICF International.

• The full version of the guide provides both a broad overview of the green revolving fund model as well as expanded technical guidance on measuring project savings, conducting accounting procedures, and evaluating fund analytics.

• More case studies and solutions to common obstacles provide a higher level of detail for administrators looking to design and implement a GRF. Additionally, the guide still includes sections on the components of a GRF, the process of designing a fund, and information about joining the Billion Dollar Green Challenge.

http://greenbillion.org/resources/

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CSA Green IT Protocol• To qualify for Green Bond or Revolving

Door Funds ICT project must adhere to a GHG reduction protocol

• New equipment or process must demonstrate energy efficiency and/or direct GHG reduction– http://shop.csa.ca/en/canada/climate-

change/ict-protocol-version-1/invt/27033222012

ScopeThis protocol provides guidance for estimating the emission reductions that could result from the provision or sourcing of low or zero carbon information and communication technology (ICT) services. This is an increasingly important topic not only because ICT has growing environmental impacts, but also due the technical complexities which underlie the delivery of ICT as a service, especially in respect of the growing use of cloud computing and the provision of ICT services over the internet. The protocol can be used both for creating verifiable emission reductions for carbon trading, and the quantification and reporting of related low or zero carbon ICT initiatives within corporate sustainability reports.

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Role of NRENs• NRENs provide network solutions to reduce energy and GHG

consumption on campus, e.g.– Connectivity to cloud and HPC providers that use renewable energy– Virtualization and remote management of campus firewalls, WiFi, routers etc– Design and consultation of building campus networks that use renewable

energy

• NRENs can combine many small energy efficient ICT projects at different campuses and aggregate into a single bond issue– Similar to a mortgage backed security (without the negative aspects)

• NRENs manage conformance of project to Green Standards (e.g. CSA) and negotiate Green Bond with underwriters

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Biggest Challenge• Most university IT departments do not pay for electrical

consumption– Usually facilities department pays for electricity and does not

breakout electrical consumption of ICT

• NREN and CIO must negotiate with facilities department to make payments on green bond fund related to the reduction in energy consumption from more efficient ICT equipment and network infrastructure

• Well quantified measurements and documentation essential

R&E biggest consumer of electricity in most jurisdictions

Australian Computer Society Studyhttp://www.acs.org.au/attachments/ICFACSV4100412.pdf

Per employee Per sector

The ICT energy consumption inhigher-ed

• Campus computing 20-40% electrical energy consumption on most campuses– Studies in USA, UK and The Netherlands– http://goo.gl/k9Kib

• Closet clusters represent up to 15% of electrical consumption– http://isis.sauder.ubc.ca/research/clean-technology-and-energy/green

-it/

• Campus data center alone represents 8-20% of electrical consumption– http://www.iisd.org/publications/pub.aspx?pno=1341

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Possible Business Models • There are a range of outcomes and solutions to reduce energy consumption

– Decision factors include degree of risk, tolerance to risk, etc

• The simplest is to decouple from the grid and deploy local independent sources of electricity (e.g. micro grids) that are not dependent on fossil fuel deliveries and are loosely coupled to electrical grid such as solar panels and windmills– Many companies will pay for capital cost in return for guaranteed purchase of power– Power from local renewable power sources can be sold to grid under Feed In Tariff

(FIT) programs– UCSD saves $850K per month because they deployed their own micro grid

• http://mobile.bloomberg.com/news/2013-10-17/ebay-to-ellison-embrace-microgrids-in-threat-to-utilities.html

• Next step is to develop an energy routing architecture and policy– Local independent renewable power will unlikely be sufficient for most institutions so

power will need to be routed in a priority basis– Using SDN-P to integrate micro grids with data networks on campus and NRENs

http://goo.gl/SFaW6p

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Why de-couple from the Grid?1. It saves money

– Cost of solar power cheaper than grid power– Deutsche Bank predicts solar will be cheaper

than electricity from grid in 80% of the world by 2017

– http://cleantechnica.com/2015/01/14/deutsche-bank-predicts-solar-grid-parity-80-global-market-2017/

2. It provides for greater resiliency of

electricity supply

3. It reduces GHG emissions

4. May be forced to use solar power if governments get serious about global GHG treaty

3 hours of sunshine hitting the plant equals our total annual energy consumption

Research Challenge – University Building and services powered with renewable energy only

• How do you provide mission critical services when energy source is unreliable?– Ebbing wind or setting sun

• Back up diesel are not an option because they are not zero carbon and power outages can last for days or weeks

• Need new energy delivery architectures and business models to ensure reliable service delivery– R&E networks and clouds can play a critical role – Not so much in energy efficiency, but building smart solutions that

adapt to availability of renewable power

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Some real world solutions and examples

MIT to build data center independent of the electrical grid

• The data center will be managed and funded by the four main partners in the facility: the Massachusetts Institute of Technology, Cisco Systems, the University of Massachusetts and EMC.

• It will be a high-performance computing environment that will help expand the research and development capabilities of the companies and schools in Holyoke MA– http://www.greenercomputing.com/news/2009/06/11

/cisco-emc-team-mit-launch-100m-green-data-center

• Huge energy cost savings in being disconnected from electrical grid

• Computers connected to universities in Boston by dedicated high speed optical fiber

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Solar powered student cell phone and computer charging stations

Street-charge.com

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eVehicle energy storage and micro grids for university

UCSD 2nd life battery program

University Delaware use of eVehicles for power

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Research Initiatives- Self Reliant Internet

• Building an Internet architecture powered solely with renewable power

• Virtually all routing and forwarding done at edge using local solar panels– E.g. aBitCool

• RPON – reverse passive optical networks, distributed FIBs

http://www.slideshare.net/apnic/abitcool-a-vast-array-of-smallscale-service-providers-with-gigabit-access-by-tony-hain-apnic-38-apops-3

Internet Powered at the Edge

Passive OpticalSplitterTDM or WDM

return

Aggregator (AOL or RBOC))

Google

NeighborhoodColo Node

OXC

Customer Controlled or Owned Fiber

Active laser & optional CWDM at customer premises

Only the contractedSP provides return signal

Yahoo

Service provider can be several km away

Active laser and CWDM at customer premises. Customer controls routing of lambdas

Neighbourhood Colo

OXC

Service Provider A

Service Provider B

Edge router with distributed FIB

GreenStar NetworkWorld’s First Cloud/Internet Powered solely by renewable energy independent of the

electrical grid

Cloud Manager

Host Resource

Cloud Manager

Network Manager

VM

Mantychore2

Host Resource

Canadian GSN Domain

European GSN Domain

Dynamically ConfigureIP Tunnel

• Shudown VM• Copy Image • Update VM Context

• Start VM

Export VM

VMVM

Internet

Notify EU Cloud Manager

Cloud Proxy Host Cloud Proxy

Lightpath

Optical switch Optical switch

Shared storage

Shared storage

Host

INTECUGhent

Virtualisation Applied to Networks

VR2A DB C

ii) Path of Traffic after Virtual Router Migration

Host AHost B

VR3VR1 VR4

Virtual Router MigrationSleeping Router

VR2A DB C

i) Path of Traffic before Virtual Router Migration

Host AHost B

VR3VR1 VR4

Physical Router Platform

Virtual Router (VR) Instance

Optical Transport Switch

Optical Lightpath (A D)

Host

Physical Link

Y. Wang, E. Keller, B. Biskeborn, J. van der Merwe, and J. Rexford, “Virtual routers on the move: live router migration as a networkmanagement primitive” in Proc. ACM SIGCOMM, 2008

A key constraint is to maintain the logical IP topology

Use a combination of virtual router migration, infrastructure sleeping together with traffic grooming in the optical layer

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Research Initiatives-Energy Internet• With SDN-P it is assumed that many energy consuming devices power have their own local power

source e.g:– WiFi spot with its own solar panel– Backup battery power on computer– Electric vehicle with its own battery bank– https://www.researchgate.net/publication/267037505_Software_Defined_Networks_for_Electrical_Power_

Distribution_over_Data_Channels_%28SDN-P%29

• Many possible virtual and real power circuits. – PoE, USB, Traditional 110/220, 48V Dc,Pulse power over Cat 5– Power routing across devices following path of virtual power circuit

• Ideal for existing intelligent networked devices like computers, switches, routers, servers, Wifi hot spots , electric vehicle charging stations, etc– Most of these devices have their own on board storage and so techniques such as round-robin power

distribution are possible

• Network engineers & researchers have to start thinking how to deploy networks that are powered solely by solar power–

http://www.theglobeandmail.com/report-on-business/rob-commentary/rob-insight/an-earth-day-look-at-the-sunny-state-of-solar/article18101176/#dashboard/follows/ …

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The benefits of challenges of SDN-P for NRENs and data centers

• The Benefits:– Providing dynamic workload redistribution– Providing dynamic reallocation of resources to optimize the use of power and

finding the least costly power– Providing resource-consumption planning, allowing for bulk purchases of power

and demand planning– Automating responses to environmental changes or other trigger events– Adjusting to changing power needs based on application demands

• Key takeaways from this report include:– Because of software-defined power’s ROI and reliability benefits, it can pay for

itself in a short time.– Innovative companies are leveraging software-defined power to increase

reliability and reduce costs.

The benefits and challenges of software-defined power SDN-P http://dlvr.it/5TGrR5

The role of eVehicle in Future Network Architectures

• With dynamic mobile charging, the eVehicle can be charged as it is travelling along the highway using power from roadside solar panels and/or windmills– Technology already in use for public bus transportation

in various cities

• eVehicle can then be used to deliver this energy as a backup or primary power source to the network, rather than consuming electricity at destination

• eVehicle becomes competitor to electrical grid for delivery of renewable power to homes, business & networks

• Ideal application for autonomous eVehicles

– http://www.slideshare.net/bstarn/dynamic-charging-latest-developments-17234454

Cyber-infrastructure in a Carbon Constrained World

http://net.educause.edu/ir/library/pdf/ERM0960.pdf

Let’s Keep The Conversation Going

E-mail

Blogshttp://green-broadband.blogspot.com

Twitterhttp://twitter.com/BillStArnaud

Bill.St.Arnaud@gmail.com

Bill St. Arnaud is a R&E Network and Green IT consultant who works with clients on a variety of subjects such as green data centers and networks. He also works with clients to develop practical solutions to reduce GHG emissions from ICT (See http://green-broadband.blogspot.com/) .