A method and system for coordinating energy management in a virtualized data center including a plurality of physical servers and a plurality of virtual machines (VMs), includes analyzing status information about the virtualized data center; determining server utilization target settings for server consolidation from the analyzed status information; and executing the server consolidation according to the determined server utilization target settings. Server consolidation can be executed by determining an effective size of each of the VMs and placing the VMs on the servers in a selective manner using an independent workload VM placement process, a correlation-aware VM placement process, or a migration-cost and correlation-aware VM placement process.