The challenges we face add uncertainty and time to investment and innovation decisions and thus, they threaten not just the completion of Digital Britain’s objectives, but also the UK’s wider economic growth.
The Digital Britain report has created a stimulating range of debates, from the feasibility of complete rural broadband coverage to the need for vastly faster connections than the proposed 2Mb/second. But looming over all discussions are doubts as to whether the UK has the infrastructure to even make the proposals a reality.
Many of the plans will depend upon increasing numbers of data centres to store and manage the wealth of information of the digital future. And these require power to operate. Digital Britain will mean that more information is created and shared as more people have access to high speed internet, and as the consumer and business worlds become increasingly digitised, data centres will increasingly be required to maintain our economy.
A lot has been written about the cost of energy in the UK, but interestingly, the most significant barrier to be faced by organisations running a data centre here is getting access to that power. Provision of power to a data centre is a potentially complex undertaking in two parts.
Challenge number one is the physical connection and installation of cables, switches and transformers to the regional grid. The second challenge is accessing distribution and generation capacity across the grid as a whole.
The South East of England and London region poses a particular challenge that is not replicated in the world’s more accessible data centre markets.
Ironically, while the liberalisation of the UK energy market should be considered an overall policy and political success, it has also exaggerated structural, ownership and incentive distortions driving these issues.
In addition, you must then consider the congestion and age of the networks within the region – they are under a lot of stress, meaning the energy infrastructure reliability comes into question.
On the supply side, environmental concerns are pushing new generation capacity away from coal and nuclear towards natural gas fired power plants. These plants are clearly more environmentally friendly and less expensive and risky to finance but, they push the UK towards dependence on a less secure source of fuel.
None of these factors is fundamentally undermining in its own right, but in coordination they begin to look more problematic. Let’s also be clear that those who are concerned by the cost of power are right to raise this issue, particularly as this is not a concern that will disappear.
The forthcoming Carbon Reduction Commitment (CRC) being introduced by the UK Government will penalise data centres when it comes to energy utilisation. While transport as a sector is exempt from the CRC, despite being a large-scale contributor to the nation’s carbon footprint, data centres are not. It will be necessary to purchase carbon credits for a data centre with electricity consumption through half hourly meters that is greater than 6,000MWh/yr.
The cost of powering essential data centre facilities is clearly not going to be reduced looking forward.
Adding an additional twist to the management issue is the fact that almost all data centres improve their efficiency when operated at higher loads. Thus, as an operator, most people are incentivised to increase their energy utilisation. High electricity prices, uncertainty around connections and supply are therefore the cause for many doubts around Digital Britain.
Some commentators have discussed the irony that Digital Britain could actually be underpinned by data centres which are situated on the continent. This is a direct result of purportedly more favourable operating conditions in countries such as France, Belgium and The Netherlands, where power costs and resource availability are judged to be more inviting.
While this would in its own right be a poor representation of a truly digital Britain, there is a bigger and more pressing perspective to consider. If we are looking to situate the data centres which power our own digital environment abroad, how can we expect major corporations to invest or expand in the UK?
We must be careful, however, not to write off the UK as a ‘data centre desert.’
As host to facilities for a range of industries, from many of the world’s top financial services providers to leaders in the leisure and entertainments sectors, the UK has a definite credibility as a data centre location.
In fact, research commissioned by Digital Realty Trust into the European data centre market has identified the UK as the most desired worldwide location for a new data centre[1].
A similar examination of the North American market showed London to be the most desired location outside of the US[2].
The technical support sector that exists here is exceptionally good, and the broader business climate in and around London is a compelling reason to situate here.
One thing we must remember is that the issues for Digital Britain, and indeed for data centres, aren’t unique to the UK - though certain elements are accentuated here, and need to be addressed. Digital Britain holds the admirable goal of making the UK a world leader in the ‘digital economy’.
Data centres and the power issues discussed above are essential elements in making this vision a reality. We must therefore be resolute in our determination to ensure that the national power infrastructure does not prevent the UK from becoming a hub of growth in the new digital economy.
[1] Research conducted by Campos Research & Analysis, autumn 2008. 47% of respondents would like to locate a data centre in the UK. The next most popular destination was Germany, with 36%.
[2] Research conducted by Campos Research & Analysis, February 2009. 32% of respondents would like to locate a data centre in London. The next most popular non-US destination was Paris, with 22%.
Jim Smith is Chief Technology Officer, Digital Realty Trust.
The views expressed are those of the author.
