Carbon tax could whack data centers

A carbon tax is inevitable, several speakers and panelists said at the Uptime Institute IT Symposium this week. Data centers that don't plan for it could get whacked with millions of dollars in additional operating costs per year -- and it could happen sooner than most people might think.

"There will be a price for carbon, in spite of the nasty, messy politics in Washington," said Jonathan Koomey, a data center energy efficiency researcher, consulting professor with Stanford University and project scientist at Lawrence Berkeley National Laboratory. It is impossible to meet government mandated carbon reduction targets without one, he says.

The stage is already being set, panelists said during a discussion of regulations and legislation. For example, a greenhouse gas reporting rule is being promoted by the EPA, said Andrew Fanara, who until a few weeks ago headed up the EPA's Energy Star program. "That rule is coming and it will impact, at a minimum, utility companies." A similar rule in the UK has already been extended to track how businesses consume energy, not just how it is generated. In the rest of the EU, that rule sill applies only to utilities and large industries, but the UK could be a harbinger of what's to come. "Will we see things like that pass here in the near future? Probably not," said John Tuccillo, with The Green Grid.

But if you think Federal gridlock in Washington will stop this from happening, you can just fuggedabout it, according to Ray Pfeifer with the Silicon Valley Leadership Group, a lobbying group for the high tech industry in the Swarzenegger state. "We're only a couple of years away from this in California," he says, and California tends to pull the rest of the country along with it. "There will be a cap and trade system and there will be a carbon tax. We won't have to wait for the federal government."

So what does all of this mean for data center operators?

In addition to designing for maximum energy efficiency, IT should factor in the carbon footprint for the source of electricity. For example, electricity tends to be much less expensive in areas of the country where coal-fired power plants are in operation. Carbon taxes could mitigate that because carbon emissions for coal are 10-20 times higher than for other types of generating capacity.

"If you site in an area with a lot of coal there's a big risk in that," Koomey says. The EU, for example, prices carbon dioxide (CO2) emissions at $19 per ton. If the US used that number, a corporation that builds a 130,000 square foot data center in a location serviced by a coal-fired generating plant, would need to add a tax of about $5 million a year to its operating costs, Koomey said.

"In the long run things are going to look very different," Fanara said. "We can't think about energy the way we used to."

Copyright © 2010 IDG Communications, Inc.

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