Carbon law 'threatens new data industry'

SCOTLAND'S fledgling data centre industry could be under threat from environmental protection laws due to be introduced in April.

Brian Murray, principal consultant at IT services firm Morse, claimed that more than one company has already chosen not to build its data centres in Scotland due to the UK government's flagship carbon reduction commitment energy efficiency scheme (CRC).

Data centres store huge numbers of computer files but require power-hungry cooling systems to lower the temperature of their servers.

The centres have been heralded as a potential growth industry for Scotland, which IT experts say combines the right mixture of cool climate and easy access to electricity in order to run the necessary facilities.

Under the CRC scheme, public and private sector bodies will buy allowances equal to their annual carbon dioxide emissions. Organisations will then decide whether to buy extra allowance or reduce their energy consumption so that they do not have to spend as much on buying future permits.

Banks, local authorities, supermarkets and water companies are all expected to fall within the scheme.

But Murray said that the system was already deterring companies from building data centres in Scotland, adding that countries such as Ireland, Holland and Switzerland stood to benefit.

Murray said: "The UK government is clearly trying to use financial incentives to encourage businesses to reduce carbon emissions. In principle, there is nothing wrong with this. However, an important factor seems to have been neglected and that's the fact that businesses will do almost anything to keep their expenses as low as possible."

He said around 6,500 public and private organisations would be covered by CRC, which is designed to tackle emissions not covered by other schemes, such as climate change agreements and the EU's emissions trading scheme.

He also criticised the scheme for not making allowances for companies that may generate their electricity from renewable sources.

But the UK government's Department of Energy and Climate Change (DECC) hit back, stating that the scheme had never been intended to influence energy choice but to improve efficiency.

A DECC spokeswoman said: "The CRC scheme is intended to be a energy efficiency scheme. Government has developed other policies aimed at incentivising renewables which the CRC scheme is intended to sit alongside."

The department also dismissed the suggestion that the scheme would drive data centres abroad, claiming the savings from improved efficiency would be attractive compared to the cost of going overseas.

"Energy costs in CRC sectors are typically only 1 per cent of total costs, and CRC is estimated to add only 10 per cent to these even for organisations at the bottom of the league table. Government does not therefore believe that CRC will be a sufficiently large consideration to drive such a trend, even for poor performers."