US calls for tax breaks on green datacentres reach UK

New report could increase pressure on the government

The US Environmental Protection Agency has published a major report recommending that a range of new standards, tax breaks and energy supplier incentives are required in order to improve the energy efficiency of datacentres. The report, which has been submitted to Congress, has prompted calls on this side of the Atlantic for the UK government to embrace a similar package of measures.

The study on server and datacentre energy efficiency concluded that if current trends continue US datacentre energy consumption will nearly double by 2011 to over 100bn kWh, costing $7.4bn in electricity bills and requiring the building of 10 additional power plants.

The EPA, which runs the popular Energy Star labelling scheme for energy efficient equipment, predicts energy use can be cut by a quarter by deploying current datacentre technologies and techniques with even greater savings possible based on the development of advanced technologies.

However, it warns that these savings will only be achieved if a number of " market barriers" - such as "higher first cost, lack of knowledge, institutional failures, and perverse incentives" - which make it difficult for IT managers to justify investments in energy efficient systems are removed.

In order to achieve this the report recommends that financial incentives for energy saving measures are introduced in the form of tax breaks and utility rebates; standard energy metrics for measuring server and datacentre performance are introduced; public sector promotes best practice in terms of procurement and development; and government increases investment in energy efficient systems.

Experts welcomed the report and urged both the US and European governments to act upon the recommendations.

David Boswell, chief operating officer at UK managed services specialist Netcetera, said that with energy costs rising and datacentres in increasingly facing up to power shortages there was an urgent need for wider adoption of energy efficient technologies. "The EPA is suggesting that the US government should challenge private enterprise to do more to cut power usage [and] the UK government should do the same," he said.

Alex Kwiatkowski at analyst firm Datamonitor argued that it was a " no-brainer" that the UK government should develop a package of measures similar to those recommended by the EPA. "There needs to be a catalyst to drive adoption," he said.
"Whether that should be through tax breaks or legislation is an issue for the government, but it needs something to help make energy efficiency a board room issue.

"There is a financial cost up front for firms developing green datacentres so the government needs to give firms a lot of time to make the transition or offer some form of financial concessions."

Martin Niemer, product marketing manager for Europe at virtualisation software giant VMware, said that higher energy prices meant that European firms were already more committed to investing in energy efficient datacentres than their US counterparts, but insisted that more government incentives were still needed to drive adoption.

"Those businesses investing in greener datacentres don’t usually do it because of concerns over the environment but because they are facing increased costs or problems getting energy supply for their datacentres, " he said. "If every datacentre is to become more energy efficient then the government needs to offer incentives to those not immediately facing these issues."

Separately, the Green Grid consortium today confirmed that it plans to deliver a raft research on IT energy efficiency by the end of the year, including a full inventory of existing energy efficiency metrics, a series of studies on datacentre best practices, and a technology roadmap for the development of efficient systems.