Jim Smith, CTO of Digital Realty Trust, examines the data centre challenges that surround the Digital Britain report, and explains how they add uncertainty and time to investment and innovation decisions. 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 stimulating debates, from the feasibility of complete rural broadband coverage to the need for vastly faster connections than the proposed 2Mb/second. Many of the plans will depend upon increasing numbers of data centres to store and manage the wealth of information of the digital future. What’s more, as the consumer and business worlds become increasingly digitised, data centres will increasingly be required to maintain our economy. But looming over all discussions are doubts as to whether the UK has the power infrastructure to make the proposals a reality.

Much has been written about the cost of energy in the UK, but interestingly, the most significant barrier to running a data centre here is access to that power. 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 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, the congestion and age of the networks within the region mean they are under a lot of stress. The energy infrastructure’s 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 are more environmentally friendly and less expensive and risky to finance, but 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.

The cost of power 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. 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.

While some commentators discussed the purported cost and resource benefits of locating data centres on the Continent, we must be careful not to write off the UK as a ‘data centre desert.’ As host to facilities for a range of industries, from the world’s top financial services providers to leaders in the leisure and entertainments sectors, the UK has true credibility as a data centre location. Research commissioned by Digital Realty Trust into the European data centre market identified the UK as the most desired worldwide location for a new data centre, and in the North American market, London was the most desired location outside of the US. The UK’s technical support sector and the business climate in and around London are compelling reasons to situate here. 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.