Sorry for not replying earlier, but I forgot to subscribe to you feed, which I have now done.

In response to your comments:

1) Setting up a CCA would take some time and my view is that organisations would be able to have them in place in time for phase 2 of the CRC which is likely to be the point that they need them.

With a little planning and a good strategy in place IT companies should be able to come out of the first phase of the CRC relatively unscathed from both a financial and reputational perspective. This is because in the first reporting year approximately 10% of the cost of buying allowances is at stake and this is 100% dependent on the “early action” Metric which responsible organisations should be able to achieve. In the second year the financial risk rises to 20% of allowances purchased and the league table will be based on performance against an “early action” metric 40%, a “growth” metric, 15% and an “absolute” metric 45%, meaning that more than half of the weighting is still based on measures that members of the IT industry can perform relatively well in. It is only in the final year of phase one of the scheme when things will start to really bite as the financial risk rises to 30% of allowances purchased and the “absolute” metric has a 60% weighting (although “relative” and “early action” metrics still hold the other 40%. It is phase two where life will get really unpleasant through a combination of the removal on the £12 fixed price for allowances, an increase in the percentage of allowances that are recycled to plus or minus 50%, and a weighting of 75% based on absolute carbon reduction.

2) CCAs are drawn up at sector level and require a relatively modest reduction in annual energy usage. The important fact is that this reduction can be measured against a relative rather than absolute metric, meaning that the hard work done in the IT industry to reduce energy usage would be recognised and not obscured by the rate at which the industry is growing. The effort required by organisations to meet its obligations under a CCA are tiny in comparison to the work needed to comply with the CRC.

3) Many of the tabloid press are themselves signed up to CCAs through the British Printing Industry Federation which has a sector agreement. But members also include the British Egg Products Association and the National Association of Master Bakers which are not pilloried as “big evil polluters”. The CRC on the other hand will have a publically published league table and you can be sure that the tabloid press will have a field day with whoever sits at the bottom of it.

4) CCAs are not mandatory and the thousands of sites in the UK that have signed up to them have done so simply because of the significant financial rewards that are achieved as a result.
A typical site will pay between £3K to £5K per annum to its sector association to administer the scheme, and in return it will get an 80% reduction in the climate change levy it pays through its electricity bill. To put this in perspective, an organisation which just qualified for the CRC by using 6,000 MWh of electricity would receive an annual reduction in its bill of over £20,000 under a CCA.

I would be happy to discuss this further with you and your colleagues if that would be of interest.

Rupert.

Liam Newcombe, Research & Policy Director at Romonet, and Europe’s leading light in the area of data centre cost & energy efficiency, made some of the following points when you emailed me with your proposal:

1) Sectors with CCAs needed to have them in place over a year ago to get out of phase 1 CRC.
2) CCAs require real commitments to be ‘agreed’ which would likely force the data centre industry to actually agree to do something, which seems unlikely considering that so few have managed to even sign up to the to sign a voluntary code (the EU Code of Conduct for Data Centres) which saves them money! (Hint hint, guys – it really is not hard!)
3) A CCA would publically stamp the data centre industry as a “big evil polluter” in the eyes of the tabloid press.
4) The main reason CCAs are exempted from CRC is that they are generally deemed to be more expensive to their operators than CRC will be.

In short, a CCA would likely be just as damaging as the CRC, but in different ways. However, you clearly know a lot about the subject and I do want to give you an opportunity to state your side in a face-to-face meeting at some point (probably with a few others).

I agree with you that the CRC is likely to have a damaging impact on the UK data centre industry. This is primarily because the majority of the measures (75%) are based on absolute metrics which do not allow for growth or outsourcing as you recognise. This means that irrespective of the efforts of data centre operators to reduce their relative emissions they will perform badly in CRC league tables and be penalised through low recycling repayments.

If however the IT industry were to set up an umbrella Climate Change Agreement that data centre operators could sign up to it would exempt them from the need to report emissions under the CRC. A Climate Change Agreement would still require data centre operators to reduce their emissions, but against a relative rather than absolute metric. in return for doing this each operator would recieve an 80% reduction in the climate change levy paid through their energy bills.

In short Climate Change Agreements would:

1) Reduce the energy bill of UK data Centre operators by between 5 and 10%.
2) Encourage the building of more efficient data centres rather than penalise it.
3) Prevent an offshoring policy from becoming prevalent within the industry.

Setting up an umbrella agreement would not be straight forward and would take some time, but it is worth considering isn’t it?

Rupert Butt

I agree that power sourcing is a key part of being responsible, and we are somewhat restricted in Britain, however our customers are here and that means that they want their data within these shores.

I had an exploratory conversation yesterday with the man behind the UK’s most ambitious eco-village proposal (Dunsfold Park, where Top Gear is filmed currently). My hope is not only to find a source of renewable power (in the form of a wood-gasification power plant supplied by nearby forestry), but also to recycle the waste heat into the combined heat and power plants so that it can help to heat homes in the eco-village.

In the future I can see data centres becoming part of the heating infrastructure, since what we do from a simple perspective is turn electricity into heat!

Sourcing power locally will become ever-more important for British data centres as the Economist recently pointed out in their extremely worrying feature article How long till the lights go out?, thanks to our posturing politicians we could be facing regular brown-outs by 2013.

My fear is that the energy supply insecurity combined with the incredibly badly thought-out Carbon Reduction Commitment will mean a mass-exodus of data centre infrastructure from old Blighty. Not bad news for you guys, but definitely bad news for British ICT.

I would like to add to Doug’s comments about the importance of the power source in reducing the over-all carbon footprint. According to Ecotricity (http://www.ecotricity.co.uk/about/live-grid-carbon-intensity)the UK Grid is putting out over 400gCO2/kWh. This is about 19x larger then the output of the Grid here (21gCO2/kWh)in British Columbia, Canada which is mostly hydro power. Virtualization, Cloud Computing and Network Advancements now allow the world to choose datacenters in locations that are both efficient and have clean power sources with a gCO2 output of less than 50.

If you combine the impact of a properly designed data center with a PUE of 1.2 (3x more efficient then a traditional data center) with clean power the impact will be a total reduction of carbon to 1/57th.

Note that this reduction has all occurred without anything being done with server and storage efficiency which could further reduce the carbon footprint by 30%.

From Wikipedia

“In economics, the Jevons’ Paradox is an observation made by William Stanley Jevons, that as technological improvements increase the efficiency with which a resource is used, total consumption of that resource may increase, rather than decrease. It is historically called the Jevons’ Paradox as it ran counter to Jevons’ intuition. However, the situation is well understood in modern economics. In addition to reducing the amount needed for a given output, improved efficiency lowers the cost of using a resource – which increases demand. Overall resource use increases or decreases depending on which effect predominates.”

So for data centres to make a positive impact on CO2 emissions they have to achieve it through more than just power efficiencies. A very interesting, and influential, person in the ICT industry over here is Bill St. Arnaud who is one of the lead architects of CANARIE, Canada’s research network. He has a couple of interesting blogs – check out http://green-broadband.blogspot.com/ and http://billstarnaud.blogspot.com/ – one of the points he makes consistently(as have I over the years) is that the source of power for a data center is ultimately more important than the efficiencies inside. A data centre that is fed power from a coal fired generating plant (the vast majority of data centres in North America) is more than 50 times polluting than one fed by hydro-electric generators. Ideally one should build data centres as close to a renewable power supply as possible to gain efficiencies through lower transmission loss.

Also, I am not purely interested in reducing carbon; I also care about the health of the British economy. Off-shoring is a problem in that instance since it will take away jobs and in the UK. This is especially frustrating when the legislation will hurt an area (data centres) that are actually key to reducing our overall carbon emissions.

To your last point: I fear that you over-estimate peoples ability to recognise that the CRC-league tables are a waste of space. There is no way I want to risk the potentially huge brand-value damage in addition to the massive investment risk (at least £1m, and that is my and my brother’s money remember – we are the shareholders!) I would already be taking, just to showcase some cool tech. First and foremost I have to look after my bottom line, my staff and my customers, and for now that means not owning the data centres we use.