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06 Apr 2010
Comments:1
Two IT industry bodies are pooling resources to prevent UK datacentre operators from losing business because of the Carbon Reduction Commitment (CRC).
The legislation, which came into force on 1 April, requires firms to buy allowances for their annual carbon emissions. Charges are capped at £12 per tonne and the worst offenders will be “named and shamed” in an energy-efficiency league table.
BCS - The Chartered Institute for IT, and Intellect UK are currently looking into whether obtaining a Climate Change Agreement (CCA) would be an “appropriate option” to protect the business interests of datacentre operators.
Further reading
Liam Newcombe, secretary of the BCS Data Centre Specialist Group, said: “The combination of a published league table and increasing financial penalties creates a strong driver to outsource datacentres to a third party.
“It also creates direct pressure to offshore existing or new datacentre capacity, creating a direct risk to value and skills in the UK.”
A CCA would provide datacentre operators with up to an 80 per cent decrease in the tax paid as part of the Climate Change Levy (CCL) scheme in return for meeting certain energy efficiency targets.
Newcombe said, if approved, the agreement would not provide “an exemption from the CRC”, but would provide an “alternative mechanism” to govern the energy efficiency of datacentres.
He added: “Any CCA would constitute a negotiated agreement between datacentre operators and government to manage and improve datacentre efficiencies.”
Michael Ourabah, international business development director at datacentre operator BSO Networks, said CCA approval is more likely to be granted than an outright exemption from the CRC.
He added: “I do not think [an exemption] would be viable because what is to stop every other industry from campaigning to be let off from the CRC instead.”
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Do you agree?
INDUSTRY DEMANDS ? CRC ALTERNATIVE FOR DATA CENTRE OPERATORS
This is a very interesting story, and I can understand the industry's concern at the potential tax bill to be borne by data centre operators and consumers.
Unfortunately I think it is most unlikely that the British Government will allow data centres to be exempt, or pay a partial tax, as they are exactly the users that the tax is meant to incentivise.
On previous occasions, we have reported that the datacentre industry is creating a similar carbon footprint to the aviation industry, and for years this problem has been ignored, unfortunately for the industry the day of reckoning has now arrived.
At Elean Data Campus we foresaw that the unlimited use of electricity could not be allowed to continue, and therefore set out to build a world beating low energy consumption facility.
This was achieved by using combined heat and power, and generating all of our chilled water absolutely carbon free utilising absorption cooling.
Utilising this facility, we have reduced the on site power requirement from 65MW to 34MW, (350,000 sq ft net technical space at 1500 watts per square metre) and we will be CRC exempt.
The industry must now stand up and be counted, and whilst I could support a tapered relief from CRC taxing for say five years, this type of approach must be adopted by our competitors, or they will be taxed out of existence.
At Elean Data Campus, we are not only CRC exempt, but offering our tenants a 30 per cent discount on their current electricity tariff.
We would be happy to discuss any datacentre operator's requirement at any time.
Posted by Alex Arthur, BNB Developments Director | 09 Apr 2010
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