FOCUS UK CRC
Issue 12, Oct/Nov
EFFICIENCY SCHEME? Is there a carbon time bomb in your data center?
it data center operator, analyst, vendor or industry spokesperson, will bring up the CRC Energy Efficiency Scheme.
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If you are reading this, and you are outside of the UK, CRC – Carbon Reduction Commitment – could still be a common term but the specifics of the UK’s CRC Energy Efficiency Scheme will be less well known. Even within the UK, however, there remains a knowledge gap, and more alarmingly, in the UK data center industry, there remains debate on the potential impact.
What is well known is that with the drying up of oil wells in the North Sea, the UK could become quite dependent on outside input for its energy needs. Only recently the energy industry predicted prices here could rise by 20% by 2020. This is why the push for reductions under its Energy Efficiency Scheme is taken so seriously, and why it has become one of the headaches of the UK data center industry.
We covered CRC in FOCUS 4 (June 2009) to a great extent, and not a lot has changed since then. For the industry today, according to most of the respondents, this is the main problem. Doubt still exists as to how this scheme will impact large users of energy – especially the data center industry – and what costs will be passed on to either the operators themselves, or their clients, if they are operating colocation or hosted data centers.
As it stands today, organizations in the UK with power consumption costing in excess of £500,000 (about 6MW of power) per annum must comply with the CRC Energy Efficiency Scheme requirements.
According to Mark King, director of data center technology provider 2bm, this is expected to change in the future. “There is little doubt that in the coming years the threshold will inevitably continue to fall with increasing numbers of UK businesses affected. It is the implications
While energy price increases may be manageable for companies where energy is a small proportion of total costs, others that are energy intensive that compete internationally could have their competitiveness threatened.
MURRAY BIRT SENIOR POLICY ADVISOR FOR ENERGY, CBI
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www.datacenterdynamics.com
he UK data center industry knows it is resilient, but the potential impact of one recurring issue continues to be hotly debated. Ask what is on the mind of members of the UK data center industry, and almost every respondent, be
ARE YOU PREPARED FOR THE CRC ENERGY
of non-compliance to the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme that is seriously focussing senior management attention,” King says.
The UK Government, however, has been criticised for leaving businesses out in the dark in regards to reform. The Confederation of British Industry (CBI), which lobbies on behalf of UK business, has called on the government to deliver its reforms by the end of this year and a group of data center specialists, in a statement in August, united to warn of the risks of hazy legislation. Both parties said they were concerned data center business could be lost to other shores if a clear picture on data center pricing and taxes could not be presented.
Senior policy advisor for energy at the CBI Murray Birt says while the UK Government has been working hard to try to simplify its energy policy, and develop green investment banks, little has been done on the ground level on relaying plans to businesses, and talking to businesses about CRC needs.
The second phase of CRC is planned for 2013 – unfortunately, this could mean the industry could know little about how its future will be shaped until, in today’s terms, far in the future. Financial markets get nervous when things are unclear, data center investors are not different. It is time for the government to redouble its efforts to ensure that the data center industry, an increasingly important part of the UK economy, is not adversely affected by its plans to be energy efficient.
UK CRC PANEL DEBATE AT DCD LONDON:
What happened to the UK regulations time bomb?
From CRC to the Climate Change Agreement, is the industry in the UK moving out of the frying pan in the fi re? Or is the CCA in fact a better deal for UK data centre operators? As the world ponders climate change, our panel of experts will discuss what the next 12 months has in store for the industry.
DatacenterDynamics opened the discussion 18 months ago, when a potential ticking time bomb was placed under all sizeable UK data centers in the form of the CRC Energy Effi ciency Scheme. By April 2011, UK companies will be buying carbon credits for the next 12 months based on their estimated power use, and the fi rst rankings will be released. Is the industry adopting a new position on regulation? The debate continues.
PANELISTS INCLUDE: Harkeeret Singh, Global Head of Energy & Sustainable Technology, Content, Technology & Operations at Thomson Reuters and Liam Newcombe, consultant of Data Center Group, BCS Chartered Institute for IT.
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