The price of carbon and your data center by Doug Mohney

Views and Opinions on Green IT (Jun 18 2009) Monitoring , Cap and Trade , Carbon Tax , Emissions , Hydro , Nuclear

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   Recent market trading in Europe and U.S. estimates put the price of carbon at around $20 a ton today. By 2010, the non-profit Investor Responsibility Research Center thinks that the world will see pricing of $28.24 per ton, says Forbes.  Regardless of the mechanism – a flat carbon emitter tax, cap-and-trade policies, or carbon offset buys – data center operators have to start factoring in the cost of carbon into their operation.

   First, let’s be honest: It is hard to predict the future with great certainty, doubly so when we move from lies, damned lies, and statistics into the realm of computer modeling built on assumptions that may or may not have to do anything with the real world.  However, having said that, barring a sudden set of breakthroughs in energy generation and/or conservation, your electric bill has a good chance of having a carbon tax built into it down the road. And if it does, that carbon tax is likely to move up year-over-year.

   How do you assess and reduce your potential future carbon tax risk? First, find out where your electricity comes from.  Is it coal-fired (Big risk of future expense), nuclear or hydroelectric (no risk)? Most utilities are quite open about how they generate and buy their electricity, with some under state government mandates to buy/generate more renewable (i.e. no-carbon) power by some future deadline.

   If you currently have “risk free” power, can you be sure that you’ll be able to hang on to it in the future? Carbon-free power is unlikely to be an abundant resource over the next decade. Eco-minded and forward-looking companies are signing contracts to lock into carbon-free power – good for both buyers and suppliers, not so good for you if you have to buy carbon-taxed electricity. In an extreme bet on clean energy, Pacific Gas & Electric may get 200 megawatts of power from solar-powered satellites as early as 2016 if state regulators approve and the rocket scientists of Solaren can deliver.

   For any number of reasons, you may not be able to make long-term commitments to green power.  This puts you squarely in plan B – reducing the total energy consumption of your data center. This will take time and some number crunching to work through cost/benefit tradeoffs for lowering total power consumption, using more efficient cooling methods,

   Another short-term choice may be to do nothing and simply pass along the cost of carbon to customers.  It may be something the market will bear, but ultimately customers will look for more affordable -- and presumably carbon-tax-free – alternatives. 

   
   

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