Mike Manos just posted a great entry on his latest visit to London.

CRC – its not just a cycle redundancy check

I have been tracking the energy efficiency work being done in the United Kingdom for quite some time and developments in the Carbon Reduction Commitment (CRC).  My recent trip to London afforded me the opportunity to drive significantly harder into the draft and discuss it with a user community (at the Digital Realty Round table event) who will likely be the first impacted by such legislation. For those of you unfamiliar with the initiative let me give a quick overview of the CRC and how it will work. 

The main purpose of the CRC is a mandatory carbon reduction and energy efficiency scheme aimed at changing energy use behaviors and further incent the adoption of technology and infrastructure.  While not specifically aimed at Data Centers (its aimed at everyone) you can see that by its definition Data Centers will be significantly affected.  It was introduced as part of the Climate Change Act 2008.

How are data centers targets?

In effect it is an auction based carbon emissions trading scheme designed to operate under a Cap and Trade mechanism.  While its base claim says that it will be revenue neutral to the government (except of course for penalties resulting from non-compliance), it provides a very handy vehicle for future taxation and revenue.  This is important, because as data center managers you are now placed in a position where you have primary regulatory reporting responsibilities for your company.  No more hiding under the radar, your roles will now be front and center.      

All organizations including governmental agencies who consume more than 6000 MWh in 2008 are required to participate.  The mechanism is expected to go live in April 2010.  Please keep in mind that this consumption requirement is called out as MWh and not Megawatts.  What’s the difference? Its energy use over time for your whole company.  If you as a data center manager run a 500 kilowatt facility you account for almost 11% of the total energy consumption.  You can bet you will be front and center on that issue. Especially when the proposed introductory price is £12/tCO2 (or $19.48/tCO2).  Its real money.  Again, while not specifically focused on data centers you can see that they will be an active contributor and participant in the process.  For those firms with larger facilities, lets say 5MW of data center space – dont forget to add in your annual average PUE – the data centers will qualify all to themselves.

While many of you may be reading this and feel poorly for your brothers and sisters in Great Britain while sighing in relief that its not you, keep in mind that there are already other mechanisms being put in place.  The EU has the ETS, and the Obama Administration has been very public about a similar cap and trade program here in the United States.  You can bet that the US and other countries will be closely watching the success and performance of the CRC initiative in the UK. They are likely to model their own versions after the CRC (why invent the wheel over again, when you can just localize to your country or region).  SO it might be a good idea to read through it and start preparing how you and your organization will respond and/or collect.

and where Mike helps to illustrate why data centers are targets.

Someone once decried to me that data centers are actually extremely efficient as they have to integrate themselves into the grid, they generally purchase and procure the most energy efficient technologies, and are incented from an operating budget perspective to keep costs low.  Why would the government go after them before they went after the end users who typically do not have the most energy efficient servers or perhaps the OEMs that manufacture them.  The simple answer is that data centers are easy high energy concentration targets.   Politically going after users is a dicey affair and as such DCs will bear the initial brunt.

Ideally what we need is regulation supports transparency, simplicity, fairness, and access, but this is a new idea as the WSJ discusses.

About Time: Regulation Based On Human Nature

• By JASON ZWEIG

Franklin D. Roosevelt sent Wall Street to the torture rack. Barack Obama is sending Wall Street to the psychology lab.

A key component of President Obama's financial-reform package is its proposed Consumer Financial Protection Agency, which would apply findings from the science of human behavior to ensure "transparency, simplicity, fairness, and access" for borrowers, savers and other financial consumers.

That could make it a lot harder for a part-time worker to end up with an exploding mortgage that eats all her take-home pay. It might even mean that regulators will finally pay attention to the visual presentation of financial data -- color, graphics and other factors that exert powerful sway over your decisions.

Heath Hinegardner

The proposal is an outgrowth of "Nudge," the brilliant book published last year by two University of Chicago scholars, economist Richard H. Thaler and law professor Cass R. Sunstein. A longtime friend of President Obama, Prof. Sunstein has been nominated to head the White House's Office of Information and Regulatory Affairs, a job often described as "the regulation czar."

In my view, a behavioral approach is decades overdue. Financial regulations always have been written mainly by lawyers and legislators -- then promptly shot full of holes by promoters who understand how real human beings think and behave.

Unfortunately for the data center I doubt we are going to get people who think like this.

Regulation that recognizes the limits of human rationality is an idea whose time has come. Like any good psychology lab, the proposed new agency will gather reams of data on how real people actually behave and adjust its rules accordingly, in real time. Of course, the financial industry will adjust its own behavior, trying to outsmart the new rules as fast as they are printed. But the war between the regulators and the regulated might finally be based on a realistic view of human nature, not fantasy.