Australia’s Carbon Tax and Data Centers

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Australia has approved plans to implement penalties for the nation’s largest carbon emitters. This “carbon tax” will affect the top 500 polluters, and commence on July 1, 2012. Since data centers are typically among the largest users of electricity, the data center sector is examining the likely impact on its business. Here’s a roundup of early commentary and analysis:

  • Techworld – NextDC chief executive, Bevan Slattery, has predicted that it may be incurring costs of 2.7 cents per kilowatt at its Melbourne facility once the Gillard Government’s carbon tax comes into effect. Speaking to Computerworld Australia, Slattery said the company’s calculations show that the carbon tax will create further incentives for NextDC and fellow data center providers to pursue energy efficiency measures.
  • Smart Company AU – In a sector by sector analysis of the impact of the carbon tax, Smart Company predicts that “the tax is likely a benefit for some data centre operators. During the past few years there has been a move towards more sustainable data centres. … Businesses may start shifting to more efficient centres or simply store data in house.”
  • Gartner – Several sources cited a report from Gartner, which says Australia’s high carbon intensive energy generation is far from conducive to the development of a long-term green IT services sector. Around 92 percent of Australia’s energy is sourced from fossil fuels. New Zealand is comparatively green, classed as a low-emission intensity country. The development of IT storage and services in New Zealand, leveraging the vast and established renewable energy sources such as geothermal, wind, tidal and hydro power, could provide the basis for a substantial content-based economic model.
  • DatacenterDynamics – “Data center providers in Australia can be put into two groups – providers with legacy facilities with monolithic designs with poor energy standards and movers and shakers coming into the market with far more progressive designs,” said IDC Australia associate director Matthew Oostveen. “There is some excitement amongst new players in the marketplace because they realise than energy efficiency is becoming a hot topic again.” These data center operators believe they can benefit by attracting businesses with a greener solution. Energy efficiency is also proving a win for some vendors inhouse, Oostveen says.

About the Author

Rich Miller is the founder and editor-in-chief of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.

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  1. Wayne Lee

    Australian-based data center operators have 12 months before they see the new electricity bills. For those with legacy facilities, now is the last chance to upgrade their facilities, or they'll become uncompetitive in the market place and will eventually collapse. Energy efficient technology is one thing, but like everything else, they'll need to conduct financial modelling - focusing on operation cost. Capital expenditure (upgrading cost) in data center operation should be treated as sunk cost, given that data center operation is a costing function of your business, not revenue generation stream. Don't be afraid to make that investment, because next 12 months could be your last chance to do so. IBM Data Center Services Portfolio Manager - Wayne Lee.