Feeds

Stealth Carbon 'efficiency' tax could close UK data centres

Idiot bureaucrats design scheme to export data centres and jobs offshore

The smart choice: opportunity from uncertainty

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 Dynamics as part of a marketing initiative for its conference, Datacenter Dynamics London 2010.

Other findings were that 83 per cent of the respondents said they are concerned about the rising cost of purchasing carbon allowances and 81 per cent were concerned about the rising uncertainties surrounding the CRC scheme.

The scheme, according to the Department of Energy and Climate Change "has been designed to raise awareness in large organisations, especially at senior level, and encourage changes in behaviour and infrastructure."

We doubt it has been designed to export UK data centres and jobs offshore – but that might be its unintended consequence.

The government discarded a plan to rebate carbon credit fees paid by companies which were the best performers in reducing energy use and cutting which were the best performers in reducing energy use and cutting carbon emissions. Instead, in October's Comprehensive Spending Review, the Government announced that it would retain these fees paid for carbon credits which must be purchased from April 2011 by companies using 6,000MWH of power, turning the scheme into a stealth tax.

It means data centre operators and other big powers face rising power costs and costs for purchasing carbon credits, a double bite into their revenues.

It is ironic that cheap electricity, which galvanised the later stages of the industrial revolution and was helped by the creation of the national grid, the inspiration for utility-driven IT services in the cloud, should now be so expensive that it is driving UK-based data centre operations overseas to locations with lower power costs and no or lower carbon-emission reduction taxation.

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, and could well reduce the government's overall tax income.

The Datacenter Dynamics London conference on 9 and 10 November at the Lancaster London Hotel, W2, is running a number of sessions examining the implications and the impact of the carbon tax. ®

The smart choice: opportunity from uncertainty

More from The Register

next story
10Gbps over crumbling COPPER: Boffins cram bits down telco wire
XG-FAST tech could finesse fiber connections
Prepare for LAYOFFS: Microsoft CEO's coma-inducing memo, with subtitles
Six-pager sent to entire human race, cc Redmond staff
FCC commissioner: We don't need no steeenkin' net neutrality rules
Just as deadline approaches for public comment on internet fast lanes
THE GERMANS ARE CLOUDING: New AWS cloud region spotted
eu-central-1.amazonaws.com, aka, your new Amazon Frankfurt bitbarn
Airbus to send 1,200 TFlops of HPC goodness down the runway
HP scores deal to provide plane-maker with new fleet of data-crunching 'PODs'
Tegile boots Dell array out of chemical biz. Dell responds: Tegile, who?
Upstart says it's up, up and away ... but not on the giants' radar – yet
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximizing your infrastructure through virtualization
Virtualization continues to be one of the most effective ways to consolidate, reduce cost, and make data centers more efficient.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.