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03.06.2016

Turn climate change and carbon taxation policy to your advantage

According to market analyst Cushman & Wakefield, Britain is the second-best country for data centres, due to its international Internet bandwidth, data centre resilience and ease of doing business. Data from OECD suggests that the UK is home to 60% of Europe’s standalone data centres, between 250 to 300 sites. If we include co-location sites, there’s a further 217 facilities.

But despite data centres being big business for the UK, their providers are facing mounting pressure.

As well as meeting massive demand from the thousands of customers who are turning to cloud computing every month, they are also under increasing pressure to adhere to strict environmental regulations drafted by the UK Government, energy regulators and climate change campaigners.

The drive towards decarbonisation

Fifteen years ago, there was no general reporting of energy or carbon to government. Today, the landscape is overcrowded and confusing. This complexity stems from conflicting policies, where the same energy source needs to reported multiple times, or the scheme coverage varies, sometimes applying to specific sites, other times applying to whole organisations. And don’t forget that climate change and carbon taxation policies are changing all the time.

It’s a political minefield, a power play between energy producing states and those dependent on energy imports, and involves complying with legislation from the EU and UK, including:

The Energy Act

A significant piece of legislation designed to decarbonise energy generation by supporting investment in low-carbon and clean energy sectors and incentivising investment in renewables.

The Climate Change Act

Setting the framework for the UK to transition to a low-carbon economy. The Act requires that UK emissions of greenhouse gases in 2050 are reduced to at least 80% below 1990 levels.

Renewables Obligation, Feed-in Tariffs and Renewable Heat Incentive

Although originally designed to promote renewable technologies, much of the focus has been on controlling, and in many cases cutting, subsidies.

It seems there is a certain paradox between the UK Government wanting to promote a low-carbon economy, and delivering the support for industry to enable it. However, by the end of the year, it’s hoped there will be greater clarity, and simplification, on the UK’s carbon policy, following:

Fifth Carbon Budget

This must become law before the end of June. The Committee has recommended this budget be set at a 57% reduction in emissions, building on the 36% reduction already achieved by 2014 and the 52% reduction by 2025, already committed to under the existing four carbon budgets.

COP21

Taking place in Paris from the 30 November, countries will come together to agree what they will do nationally to tackle climate change, reach a commitment on how they will increase targets every five years to make them more ambitious, and how to finance initiatives for developing countries.

In terms of UK energy and climate change policy, the message is clear, our government may still be struggling with its narrative about how to reconcile the different elements of its green policy agenda, but the Treasury is firmly in the driving seat, securing our country’s future.

Look at carbon in a different way

So what does this mean for data centre providers? Well, power costs and energy efficiency have always been a top priority for data centre managers and co-location service providers. The price of power can significantly alter the overall lifetime cost of a data centre as it contributes about 30% of a facility’s operating expense.

Research house Anthesis said that data centre power consumption is projected to increase to roughly 140 billion kilowatt-hours annually by 2020, requiring the equivalent annual output of 17 new power plants and emitting nearly 150 million metric tons of carbon pollution annually. As more devices come online, thanks to the ‘Internet of Things’, the stress on data centres will only intensify.

While some data centre operators buy green power because it is required by their customers, or they wish to communicate a commitment to the green agenda, for others, it just makes economic sense.

Under the Climate Change Agreement (CCA), certain energy intensive industries receive a 90% discount on the Climate Change Levy, a tax added to electricity and fuel bills, if they commit to improving the energy efficiency of each site by 30% over a 2011 baseline. The preliminary target is a 15% reduction in PUE (Power Usage Effectiveness) over the initial lifetime of the scheme, which ends in 2020. And data centres are expected to save 1.5p on every kiloWatt hour of power they use, which could save you thousands of pounds each year.

Future-tech: we make it easy to be green

We have been at the forefront of innovative data centre design, implementation and operations for over 30 years. We offer a range of new build and retrofit data centre services to enhance the design and energy efficiency of your facilities. As an ISO14001 accredited organisation, and winner of several ‘green’ awards, including the Certified Energy Efficient Data Centre Award and Uptime Institute Green IT Award, we know how to make cleantech work for your organisation.

Discover how we can turn climate change and carbon taxation policy to your advantage.

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