Are UK data centres at risk from energy price rises?
Hardly a day goes by recently where there isn’t a story in the news about rising gas and electricity prices. Focus tends to be on residential rates, but business rates are affected too - and with the added complexity of daily standing charges on top of a fixed unit rate, plus VAT at the full rate and the Climate Change Levy (CCL) - it’s no wonder that businesses like data centres, with their potentially high rate of energy consumption, could be most at risk.
We know that the government’s stated reason is to encourage carbon reduction, but we also all know it’s really just tax and will go into the Treasury pot. And the end result will certainly be that some companies who might have located their data centres in the UK will choose another country.
But it isn’t as bad as it sounds, because all data centres aren’t the same, and aren’t in existence for the same reasons. Some data centres need a lot of computation power, and therefore electrical power, but have little need to communicate with the outside world.
An example might be geological computation – lots of number-crunching, little comms, few people - and those may leave. But others are comms-heavy or latency-critical, which puts a whole different perspective on things. Companies like algo-traders, who need super-low latency and hence close physical proximity to the big financial trading platforms - or telephone calling card companies, who need a myriad of diverse connections at low cost, to all sorts of strange parts of the world. These companies need the best and fastest connectivity in Europe, and there’s only one place they can get it - Central London. They won’t leave.
