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Colocation providers find unexpected repercussions from government incentives

From the 1st of July, colocation data centre providers with an electricity supply of at least 200kW have been able to take advantage of the Climate Change Agreement (CCA) that has been negotiated on their behalf by TechUK. CCAs allow companies to obtain tax reductions or exclusions from carbon taxes if they reach energy efficiency targets, and so reduce the impact of the Climate Change Levy (CCL) or Carbon Reduction Commitment (CRC).

According to TechUK, providers who pay the CCL and CRC will benefit by 1.35p per kWh of electricity, or about £24,000 a year for a (modest) 200kW data centre, and £120,000 a year for a 1MW data centre. Such a saving is not to be sniffed at.

How do colocation data centre providers become eligible for this saving?

So what do colocation providers need to do to benefit from this scheme? They essentially need to plan for and demonstrate a 15% improvement in PUE (Power Usage Effectiveness) by 2020. This inevitably requires participating sites to collect auditable PUE data, although they are also required to regulate temperature and humidity within their facilities.

This is music to the ears of the DCIM vendors, Concertim included – the government is incentivising the industry (albeit a small part of the industry) to build better energy and environmental monitoring into their day-to-day operations!

But the reality for the colocation operators might be a little more complex than they might have originally thought…

Colocation providers operate data centres, but don’t have any control of the IT equipment that is housed in them. They cool the data centre, but have little say in how much waste heat each of their customers will produce (other than by regulating the electricity that is available). Since many colocation providers partition space and power using open cages, neighbouring cages could potentially generate more or less heat depending on how dense and/or efficient the IT infrastructure that is housed within each cage is.

So colocation providers who sign up to the CCA will inevitably spend time and money improving the effectiveness of the cooling systems within their data centre, which is ultimately good for them, good for the environment and good for the industry.

However, if some or all of their customers decide to optimise their IT infrastructure (also good for environment and the industry) and the colocation provider doesn’t respond to this, or cannot respond to it based upon its inability to target cooling for customers who need it more than others, then the PUE of the data centre may actually increase.

In fact, a little bit of simple maths says that if the relative saving that customers make to the total IT load outstrips the relative saving to the cooling (and other) loads, then the PUE will increase. The data centre as a whole will make much more effective use of power than it did before, CO2 emissions will be lower, but ironically the colocation provider will lose the benefit of the CCA…an unexpected repercussion of a simplistic incentive.

Proactive, holistic monitoring

Of course, our friends at TechUK who lobbied for the CCA are not stupid – they expect the CCA to be revised in 2016, by which time they hope to have more sophisticated metrics and standards available. The colocation providers are also aware that they will need to be more proactive in managing their cooling infrastructure than they have ever been.

So all in all, even better news for DCIM vendors such as Concertim: the industry will not only need to have high level energy and environmental monitoring, but will also need  to monitor fine-grain information and potentially control data centre facilities to adapt to changing IT loads.

At the very least, it seems that more incentives will be in place to ensure that metrics that take into account both IT efficiency and cooling efficiency can be generated by data centre providers – something we’ll explore more in the next blog.

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