In a recent survey published by the DataCenterDynamics Research Group,entitled “The Carbon Reduction Commitment - The Drivers Behind the Scheme and How the Changes Will Affect You,” we can learn more about how data center operations can expect to be impacted by these new, green initiatives.

The online survey highlighted 80 U.K.-based data center operators -- its results will be discussed in-depth during the London Conference on Nov. 9 and 10, at the Lancaster London Hotel, on the topics including, “CRC Update- The Implications of the New Tax,” “The CRC and Energy Efficient Solutions” and a panel discussion on ‘From the Carbon Reduction Commitment to the CCA - Is it out of the Frying Pan into the Fire, or in Fact a Better Deal for U.K. Data Center Operators?” The conference will focus on the implications and the impact of the carbon tax. 

U.K.-based data centers produce 2 percent of the total amount of greenhouse gas emitted in the U.K. each year, while using 6,000MWH of power. Now the data center operators are in line of fire as they need to pay a direct tax on energy consumption at £10 to £15 per tonne of CO2 allowances and 1 tonne of CO2 equating to roughly 500kWh of grid electricity which will raise the price of energy by about 10 percent.

The industry has dubbed the carbon tax as “stealth tax” owing to tax amount expected to be raised by 4,000 of the largest industries and businesses in the industry in 2014 and 2015, by the UK government. The carbon tax is levied on carbon content of fuels emitted by industries, in order to bring about a greener environment by reducing the carbon emission. 

Thirty-three percent of the biggest data center operators felt that the U.K. CRC efficiency scheme will push operations and investment offshore, while 47 percent felt it would push investment overseas. Eighty-three percent of the responders have raised concerns on the rising cost of purchasing of carbon allowances, while 81 percent were concerned about the rising uncertainties surrounding the CRC scheme, which has been turned into a tax.

The DataCenterDynamics Research Group has been tracking this issue since June 2009. The DataCenterDynamics survey responders were among 80 of UK data center operators, with 27 percent working in colocation managed services or hosting; 14 percent working in telecommunications; 16 percent working in finance; and the remaining 20 percent working in the public section. 

 “U.K.-based Romonet provides energy tracking software for data centers,” said Liam Newcombe, CTO of Romonet. “CRC is now an expensive tax as well. A medium-sized colocation (colo) data center can expect to add £500,000 to its annual opex for the purchase of allowances in addition to the compliance costs. There are clear impacts to the data center market. Colo providers are now likely to have to add a direct ‘CRC tax’ to customer power bills as metered power times a multiplier. Those service providers whose contracts do not allow them to pass on such new charges face a more difficult decision, with power cost as the major part of their cost of delivery the 10 percent increase will substantially reduce and possibly eliminate their margins.”

So it’s some green food for thought...