back to article Stealth Carbon 'efficiency' tax could close UK data centres

Almost half of the UK's data centre operators believe the UK's Carbon Reduction Commitment (CRC) efficiency scheme tax could drive UK data centre investment offshore, with one-third saying it would send UK data centres overseas as well. The findings are from a survey of Britain's largest data centre operators by Datacenter …


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  1. The Indomitable Gall

    The article misses the point.

    Yes, fine, jobs overseas and all that, but even from the environmental angle, this is a Bad Thing.

    Discouraging UK data centres encourages individual server rooms for people who want to keep their data close at hand.

    The mistake here is thinking of data centres in terms of "one site" or "one company". The data centre is an centralisation, often outsourced, to prevent the need for chillers, extractors, air filtration, back up generators, lighting, on-site security etc etc etc in multiple locations. Consolidation and virtualisation reduces the total number of servers. And that's before we've even looked at virtual desktops and the massive carbon savings involved in switching to solid-state dumb terminals.

    Attacking the legislation as sending jobs overseas is all well and good, but surely it's better to undermine the environmental case used to justify it.

    Data centres cut carbon emissions, so should be rewarded, not penalised, for their density.

    1. The Cube

      Oh no, another person who thinks thin clients save energy

      They don't, the additional data centre and comms network energy to support them substantially outweighs the energy consumed by a reasonably configured desktop let alone a decent laptop. If you want to be green buy a decent laptop, run it for 5 years on Microsoft whatever and then when it can't run the bloatware any more reinstall it with Linux.

      1. thecakeis(not)alie

        @The Cube

        You have absolutely no idea what you are talking about. I've recently done a thin client migration. We did look at our average usages. We measured the increase in server consumption post-VDI. We attacked power from every angle. With only 75 desktops moving to VDI, we have reduced our desktop consumption by 70%. That doesn’t mean our thin clients consume 70% less power than the old desktops, (that’s closer to 95% less power in fact.) It means that after factoring in the extra load on the servers, the networking gear and the energy lost by having more systems on UPSes (which bleed some power off as heat) we are still eating 70% less energy.

        The Thin Clients in question have no moving parts. I fully expect them to be around for the next 10 years. The servers are overspecced for the job; we’ll get another 4 our of them, and be able to replace them with something even lower power when the time comes.

        VDI/thin clients absolutely 100% do reduce power consumption when compared to desktops. If you want to go toe-to-toe with laptops…that’s another story. Laptops are specced very close to their power envelopes, so you are going to be looking at only about a 20-30% efficiency when all the figures are in. You’ll still have efficiencies however.

        Though I challenge you to get most modern laptops to give you 3-4 years running MS and then another 5 running Linux. Obviously you don’t work in an enterprise environment. What you speak is sheer madness. The only way you get a modern notebook to give you that kind of life is

        a) Buy a very well crafted (and expensive notebook.)

        b) Religiously (every three months) blow all the dust out of it.

        c) Have replacement fans. (They WILL die on you. You WILL have to replace them.)

        That is an incredibly manpower intensive way to maintain equipment. Manpower is costly. Thus everything your are suggesting makes no sense for business. Beyond that, using a laptop as a primary work unit is simply a no-go for many people. I can’t speak for employees where you work, however here we have a lot of older individuals. They absolutely will not work with anything less than a 22” screen. (They otherwise can’t see it.)

        Do the research. Do the math. Thin clients save power. Gobs and gobs of it. If you won’t believe me, then I honestly recommend you call up Intel. Don’t ask to speak to a marketing droid…ask to speak to their head sysadmin. They have internally dome some huge virtualisation and Thin Client projects. They are perhaps the single most experienced company in the world at that game. Ask and you might well receive: but they will prove it to you. I’ve seen their numbers (in some impressive detail) and they correlate closely with my own.

        Thin Clients Save Power.

  2. Dino Saur
    Thumb Down

    Please try to keep some consistency in your arguments ...

    "The government bureaucrats don't realise that broadband communications mean it's just as feasible to operate your lights-out data centre in Dubai, Brazil, India or Malaysia as it is to operate it in London's Docklands. The stealth CRC tax is effectively a tax on UK data centre jobs as well as on the UK's data centres"

    I thought the whole point of a 'lights out' facility was that they required very few live bodies to maintain them - nobody can work when the lights are out! Your argument might make more sense if you try to quantify the losses in revenue and jobs rather than making wild predictions of disaster.

    Second point, data centre operators could **make their centres more efficient**, thus saving money on power and avoiding the carbon tax. And they would generate much less indirect pollution. As a tax payer, I'm all for reducing the tax burden from cleaning up after other people. Carbon tax might be a dodgy concept, but it's time that people started paying for the mess they cause. Try looking up 'externality' on wikipedia.

    1. Anonymous Coward
      Anonymous Coward

      Externalities should be real

      ...not imagined/manufactured political constructs. If you want improvements in efficiency just say it - everyone can get behind that. Classifying CO2 as the most important pollutant/externality and making people buy indulgences to cleanse them of their carbon sins is, IMO, ridiculous and unnecessarily divisive. The whole idea stinks of someone who has an axe to grind about other people's behaviors, and knows just enough about Economics to be dangerous... but not enough to have a proper perspective of how disasterous "great ideas" like this can be.

      This scheme, if pursued as described, will have severe unintended consequences. The funny part is that the first industry that came to mind after reading this article was the metal recyclers (and their arc furnaces) - how strange would it be if this green legislation shut them down?

      If your goal is to improve efficiency you should try to use an appropriate scale tool to get things moving in the right direction. This is like trying to knock a dent out of your fender with a wrecking ball. Too powerful, too imprecise... and it will do more damage than good.

  3. PirateSlayer

    Pass the costs on...'s what everybody else would do.

    I suggest passing most of it on to huge customers like banks and big business...then we can watch the government squirm as they whinge en masse.

    1. Anonymous Coward
      Paris Hilton

      RE: Pass the costs on

      Yes please do. Meanwhile I'll busy myself with nicking all your customers because the reduction in tax that I pay by off-shoreing my data centre means I can undercut you.

  4. Anton Ivanov

    Nothing wrong with it

    Actually, anything which will decrease the tendency to pile up datacenter facilities in Docklands on top of each other is good for the UK economy in the longer term.

    The cost of operating a datacenter in "cheap leccy land" and datacoms to it is probably still higher than operating it in the Pennines or Scotland for anyone except the likes of Google and Co. In reality most companies will just move to "cooler" and less expensive places in the UK. After all running your datacenter in London is absolutely guaranteed to be more expensive than running it in let's say Kings Lynn just on the basis of cooling costs. London year-round average is 1-2C hotter than the rest of the UK.

  5. Anonymous Coward
    Anonymous Coward

    Shock, horror,

    government does not understand that if it's cheaper elsewhere then that's where the biz is done.

    How long will it take to realise that ?

    Let's has taken about 30 years so far, and they still have not got "it"

    Or maybe they can only see revenue ?

  6. Anonymous Coward

    Surprise, surprise, surprise..

    Neither individuals nor businesses (really their customers) like to pay taxes. So they'll move their operations to minimize them.

    It's been going on for decades, if not longer.

  7. Anonymous Coward
    Anonymous Coward

    e l t i t

    Scary! What an evil gov etc... heard it all before. If data centers were bound to go elsewhere for cheap energy prices and labour, why have they not yet done so? Maybe because India is completely unreliable? I know some big corps that tried and got burnt...

    It's more of an incentive than a stealth tax. The problem is, though, will this crc money be invested into technologies that help reduce our carbon footprint? No, evil gov!

  8. Anonymous Coward

    One-sided article

    A very one sided article so I'll reply in kind: The companies could take advantage of Feed-in Tariffs and bung a few solar panels on their roof. They might even make a profit by exporting their unused electricity with a sufficiently sized array.

    The floor is yours ...

    1. The Cube

      Solar panels? Seriously?

      And what part of the data centre do you suggest they power with those in the UK? The backup lighting and the extractor fan in the bog?

      These facilities have power densities of kW / sq m, solar panels would be the worst sort of greenwash (exept BP putting solar panel on petrol stations) and the chances of having any energy left over to sell back on a feed in tariff are zero.

      1. Anonymous Coward

        District CHP

        Or we could build Data Centres in urban areas and use the heat output to provide a district Combined Heat and Power system.

        1. Daniel 4

          The title is required, and must contain letters and/or digits.

          It's a great idea, but it's not really feasible the way you described it (probably why you got the downvote). However, anyone who has actually researched CHP systems should see the missing piece here - CCHP (Combined Cooling, Heating and Power). Power can be generated locally onsite using a combustion engine with a high-temperature exhaust (usually gas turbine). Ammonia based chillers can use the waste heat to provide cooling (ammonia chillers used to be the standard for large buildings, and can still be found in some new installations today - usually running on waste heat). The third stage is reduced to "warm," which is still hot enough to run a boiler. On the scale used in a modern datacenters, such an installation would have a very high power efficiency - electric generation efficiency is high, there is far less distribution loss generating locally than there is over the grid, and a very large fraction of your cooling is "free" (installation and maintenance costs remain). As a bonus, a lot of heat in sufficient concentration to use as a district Heating provider is generated.

          Now, this is not my specialty, and I can't help but think that people who know a lot more about this than I have already considered it, and there must be some serious obstacles or it would be more prevalent. However, I believe that the base notion is sound. Perhaps this is something we'll be seeing in the future.


  9. -tim

    Follow the money!

    We are moving things out of Victoria Australia because power costs are just too high thanks in part to crazy carbon scams. That means our next hires will not be Aussies.

    I still get the odd feeling that CO2 is all about switching currency to the carbon standard and someone forgot that it does grow on trees.

  10. Steven Jones

    Emission exports

    "The government bureaucrats don't realise that broadband communications mean it's just as feasible to operate your lights-out data centre in Dubai, Brazil, India or Malaysia as it is to operate it in London's Docklands."

    Some truth on that, but no amount of broadband will do anything about the speed of light. The latency to some of those locations will be in the 100-200ms region for a round-trip. That makes it unsuitable for quite a lot of IT uses, especially as complexity increases. For some applications, like real-time trading, every millisecond counts.

    There are also issue about security of data, and European data protection standards will prohibit, or at least make very difficult, the export of some types of data to these locations.

    However, the biggest issue with any carbon tax is that is can simply export the CO2 emissions to a different country (as has happened with the CO2 emissions associated with manufacturing industry). A tonne of CO2 is a tonne of CO2, whether it is emitted in China or Cheltenham. Of course if the activity is exported to a country with low-emission electricity generation (effectively that's cheap hydro or geo-thermal), then that will save emissions, but that will only happen if the pricing mechanism across the world is common.

    In other words, a CO2 tax in Europe alone would have only limited effects as any industries which are inescapably CO2 intensive will migrate to cheaper climes where this is possible.

    Of course we could build some more nuclear power stations, although for some bizarre reason, these were not properly recognised as low-carbon generation systems.

  11. RonaldJDuncan

    Carbon costs £ 12 per ton, this is a very small additional cost

    We have now carbon footprinted over 3.6 million items, and we run 2 datacentres.

    The carbon cost on our datacentres is very small, and is not going to affect us going carbon neutral as a business.

    Findel Education used us to carbon footprint their catalogues and over 80% of the items had a carbon offset cost of less than 0.1p

    Job losses in Datacentres is not an issue around CRC.

    What is an issue is that most of the carbon in our country comes from unmeasured sources like goods and services and not from Electricity and travel, and we need to start looking at the carbon cost of the copier paper and the laptops and not just large energy bills.

    The issue of exporting jobs to countries with cheaper power is an issue, and it would be better to measure the carbon content of all goods and services including imported goods and services to get a more balanced picture.

    However, the carbon tax on electricity is very very small compared with the tax on petrol.

    1. Hugo Rune

      Carbon costs £12 per ton?

      A big bag of charcoal costs that in B&Q.

      "most carbon in our country comes from ... goods and services"

      Can I have mine in diamonds please.

      Good points but it's Carbon dioxide

  12. Anonymous Coward
    Anonymous Coward

    PUE matters the most

    you get your PUE down, doesn't matter where you go.

    FWIW, the big datacentre players are moving to free air cooling, where scotland and ireland and the northeast of england can all do well -that cold air coming of the north sea is good for cooling, and if you can have a decent wind farm array offshore, you are close to the power.

  13. Tigra 07
    Thumb Down

    UKIP it is then

    Not more carbon taxes!

    They do realise it's the UK and not America?

    We must be the most taxed people in the world by now right?

    1. Anonymous Coward

      Re: UKIP it is then

      "Not more carbon taxes! They do realise it's the UK and not America?"

      Yep, the UK doesn't do carbon, right?

      "We must be the most taxed people in the world by now right?"

      No wonder you're tempted to vote for the UK Idiot Party. Hint: try looking at other countries where people are actually taxed higher in numerous ways. Bonus hint: one of them is supplying Britain with lots of natural gas.

      1. Tigra 07
        Thumb Down

        RE: AC

        "Yep, the UK doesn't do carbon, right?"

        I was pointing out we pay more for green taxes than Americans despite polluting much less

        And as for currently supporting UKIP, they would allow us to get rid of the Human Rights Charter, Lisbon Treaty and leave us richer by leaving Europe.

        So who's the stupid party here?

        The one that commits us to a European army and massive bills to a corrupt European parliament - Labour

        The one that cuts bills for the rich at the expense of the poor - Conservatives

        Or the one that wants us to have no nuclear deterrent at the same time as letting in everyone who wants to live in this country - Lib Dem

        You may want to do some reading AC

        1. Anonymous Coward

          RE: AC

          "And as for currently supporting UKIP, they would allow us to get rid of the Human Rights Charter, Lisbon Treaty and leave us richer by leaving Europe."

          Leave us richer how, exactly? This is the National Front's trade policy from the 1970s: trade with former "white" colonies like Canada, Australia and New Zealand; ignore the volume of trade that takes place now between Britain and the rest of the EU. Good luck with that!

          I don't like various aspects of the Lisbon Treaty, but get rid of the Human Rights Act? (I presume you mean the act which brings the ECHR into force in Britain.) And replace it with what?

          "So who's the stupid party here?"

          Well, let's see...

          "The one that commits us to a European army and massive bills to a corrupt European parliament - Labour"

          Hold on! Reading a recent BBC "Have Your Say" column, I thought Dave Cameron had just committed the UK to a European army. What next? Pull out of NATO? Pull up the drawbridge?

          "The one that cuts bills for the rich at the expense of the poor - Conservatives"

          Not arguing with this one.

          "Or the one that wants us to have no nuclear deterrent at the same time as letting in everyone who wants to live in this country - Lib Dem"

          Daily Mail stuff, indeed.

          "You may want to do some reading AC"

          Actually, you might want to read up about what the UKIP MEPs get up to. Singing the Dad's Army theme song in EP meetings may whip up a few giggles down in the UKIP's cider country heartland, but given that the EU is becoming the primary legislative force in Britain (if it isn't already), voting such buffoons into positions where they could actually have some influence isn't so much like swimming against the tide as it is swimming with it while joking that you're defecating in the sea and then complaining that your beach has a sewage problem.

          Maybe UKIP will become more than one-dimensional policy refuge for intolerant Tories in future, but informed voters shouldn't hold their breath.

  14. Yet Another Anonymous coward Silver badge

    Job losses

    So we are looking at 10,000s of job losses in London as these major data centres in the capital shut down?

    Or are we looking at places that employ 6 people to watch a bunch on monitors in lights-out facilities that are only built therebecause they got some local tax break to 'invest' in the region.

  15. Britt Johnston

    can't we tax data at source?

    Luckily, context-sensitive monitoring of the internet is being developed by your government, which could be paid for by taxing naughty foreign data suppliers who dodge paying British taxes.

  16. Cheapster

    They could send them to India

    But of course the government will want to read all the data. I'm not sure I'm keen on that, which banks have outsourced over there?

  17. Neil Lewis

    "cheap electricity, which galvanised the later stages of the industrial revolution", plenty of zinc-plated stuff about then?

  18. Jeff 11

    Move offshore? Sure!

    Because of course it's much easier to ditch your customers and move hundreds of millions of pounds of static properties, equipment and infrastructure elsewhere for a marginal reduction in tax.

    You might get players like Google, who own the entirey of a datacentre and its contents, moving elsewhere. But for the vast majority of outfits who own kit in leased rack space, it's usually technically or legally impossible to move their data flow offshore. If this affects the datacentre industry in the UK, I doubt that you'll see more than a renegotiation of contracts (e.g. more emphasis placed on billing for energy use than data) to suit the new market climate.

  19. Anonymous Coward

    CO2 is not a pollutant...

    ...yet these bonehead politicians have been drinking too much IPCC/Hockey Team Koolaid and have managed to convince themselves that CO2 is a pollutant, thus we get stupid things like CRC / cap and trade etc

    The stupidity of some members of mankind is simply amazing.

    The watermelons will not be happy until we're all living back in caves and throwing spears again, to 'save the planet'.

    /rant off

  20. Anonymous Coward

    For those scratching their heads...

    ...and asking "How the hell did we end up here?", this might prove informative:

  21. Jim Black 1
    Thumb Down


    "The power to tax is the power to destroy". I don't remember who said that but it has been around a long time.

    I wonder why no one is questioning the fundamental fallacy of the manmade global warming fraud - the world has been through cycles of warmth and glaciation many times and will do so again regardless of what mankind does. The "Tax Carbon" bunch are using short term data to convince people to give them money so that they can further build their scam.

    Before the ad hominem group starts saying "Denier", I believe that the world is on a course to get warmer for a bunch of years, followed by another glaciation. After all, the people who study geology can tell you that there were once glaciers over much of the northern and southern latitudes and that the last ice age ended about 12,000 years ago, give or take a few thousand. So what caused the most recent Ice Age to end? Malankovich Cycles, anyone?

    Better we should start figuring out how to prosper in the warmer climate to come because it is coming, regardless of how much carbon dioxide mankind releases. The transfer of wealth to the AGW crowd is quite similar to throwing paper money on an open fire - useless.

  22. Anonymous Coward

    CO2 fun

  23. Anonymous Coward
    Anonymous Coward

    we will still have goggle owned Fibre and data centers though so that's Ok then.

    "Almost half of the UK's data centre operators believe the UK's Carbon Reduction Commitment (CRC) efficiency scheme tax could drive UK data centre investment offshore, with one-third saying it would send UK data centres overseas as well."

    its not a problem for UK PLC as we will still have goggle owned fibre and data centers though so that's OK then.

    perhaps the cons can sell off all these spare UK data centers into private multi nationals hands cheap, and have them put houses on the empty plot's , after all we dont have any more schools and shop plots to sell off anymore for housing like they did the last time around.

  24. ubu62

    More in depth article here

    If you want a good in depth view, go here

    I've also been checking the DECC and Environment Agency sites and there is still no update on whether the league table will be remaining, if the payment dates will be staying as before etc.

    Evidently, the HMRC executed a smash and grab and the other civil servants are to busy worrying about redundancy to react.

  25. Anonymous Coward

    carbon credits?

    I think not. carbon credits are just a tax dressed up all pretty for the greenies so that eventually we'll all be back in caves. Just say NO.

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