DOE to Invest $47M in Data Center Efficiency Projects

Now here’s a truly smart way to spend some of the stimulus: This morning Secretary of Energy Steven Chu announced that the Department of Energy will spend $47 million of its stimulus funds on 14 projects that will make information and communication technology more efficient, with a strong emphasis on data center efficiency. The servers in data centers currently account for about 1.5 percent of U.S. electricity use and that figure will only rise in the coming years.

Surprisingly some of the biggest recipients of the DOE funds are data center-focused startups like the stealthy SeaMicro — which received $9.3 million and is backed by Khosla Ventures, Draper Fisher Jurvetson and Crosslink Capital — and PowerAssure, a 3-year-old firm that makes data center efficient software and received $5 million from the DOE.

The older web and Internet infrastructure firms took a big chunk of the funds, too. Yahoo (s YHOO) received $9.9 million for a data center cooling project, Hewlett-Packard (s HP) won $7.4 million for a power supply chain project, the IBM T.J. Watson Research Center brought in $2.3 million for an equipment and software project, telecom gear company Alcatel-Lucent (s ALU) got $1.8 million for a cooling project and Alcatel-Lucent’s Bell Labs won $300,000 for an equipment and software project. A couple universities — Columbia University and the California Institute of Technology — also won funds.

Chu explained in a conference call this morning that the DOE funds were split into three groups: 1). reducing the energy of core systems like servers, 2). reducing the power loss at the connection point to data centers, and 3). finding more efficient ways to cool servers and data centers. More energy efficient data centers could save 400 trillion BTU’s of energy per year (equivalent to the amount of energy used by 2 million homes each year), significantly reducing operating costs for companies and create new jobs, said Chu on the call this morning.

The energy used to cool data centers sucks up 40-60 percent of the total energy consumption of data centers, so we’re glad to see Chu giving a nod specifically to cooling. Grantees of DOE funds for cooling projects included: IBM T.J. Watson Research Center ($2.3 million), Federspiel Controls, Inc. ($584,000), Yahoo ($9.9 million), Alcatel-Lucent ($1.8 million) and Edison Materials Technology Center ($2.8 million). Here’s the full list.

While $47 million really isn’t all that much funding (in comparison the smart grid got $4 billion of stimulus funds) the announcement will be important to bring attention to geeky, and sometimes overlooked, data center efficiency technology. In particular companies like SeaMicro, with truly innovative technology, could end up being be game-changers (more on that firm later today).

Image courtesy of s_w_ellis’ photostream Flickr Creative Commons.