CCA opportunities for Data Centre Operators
Wednesday 19th October 2016
Driven by the emergence of cloud services, the UK has become a pioneering example of data centre industry success. 60% of the European data centre market is based in the UK, closely rivalling China. This has increased the sector’s energy demand and as a result CCA legislation was updated in July 2014 to include colocation data centres as a beneficiary. This was driven in order to stay competitive on an international level and keep this important industry in the UK. The move is positively supported by techUK, the British tech industry body, after having lobbied for many years to have data centres included.
The legislation will reduce data centres’ overall energy costs as well as reducing their carbon emissions, creating a win-win situation for all. As a result, the sector will now be more open for both UK and offshore investors.
It is the first time the legislation has been applied to an industry that does not manufacture physical objects. As it stands, eligibility for this opportunity includes only shared colocation data centres (‘colos’) that house third party computing assets such as servers, but techUK are looking to extend the legislation to also include enterprise data centres.
By participating in the scheme, members benefit by receiving a discount on their carbon taxes (CCL and CRC). In exchange, they must strive to meet an imposed energy efficiency target. The sector specific target to reach is a 15% reduction in power usage effectiveness (PUE) by 2020. By meeting the energy efficiency targets the scheme will result in a reduction of the centres’ PUE, which will also result in energy cost savings. If the data centre can demonstrate that more than 70% of the primary energy used across the site as a whole is used in the eligible process, then 100% of the site can claim the CCL discount.
This legislation is seen as a positive move by techUK because as the energy efficiency targets are sector specific, they focus on the precise area whereby the most significant benefit can be received. CCAs do not focus on net reductions, instead reporting based on an efficiency measure, which can accommodate site growth.
E2 is fully committed to helping this new industry fully benefit from the updated CCA legislation. We provide clients with fully managed CCA services, ensuring ongoing CCA compliance and maximum scheme benefit. A turn-key management strategy typically covers:
- Detailed site survey & assessment of scheme eligibility
- Initial application & ongoing eligibility reviews
- Regular target performance reporting & sector association liaison
- Installation of aM&T solutions (where required)
- Energy reduction strategies to avoid/minimise buy-out fees
- Updates on regulations, scheme changes and continual benefit assessment
- Evidence pack maintenance & audit assistance