Dirty energy keeps data centre builders at bay

 

Why aren't cloud providers setting up shop in Australia?

Australia’s ‘dirty’ energy sources and carbon tax debate could be deterring international cloud service providers from establishing on-shore data centres, according to Gartner analysts.

Gartner research vice president Marcus Blosch believes multinational IT service providers are concerned that electricity costs could become prohibitively high should a carbon tax be introduced.

Australia was found to be among “high-emission intensity countries” that uses fossil fuels to generate the majority of its electricity, according to a report Gartner published earlier this year.

Ninety-two percent of Australia’s energy was sourced from fossil fuels, Blosch found, reporting that this was “far from conducive to the development of a long-term green IT services sector”.

“What you see among data centre vendors is the recognition that 50 percent of costs is from power consumption,” Blosch told iTnews this week.

“In Australia, if carbon starts costing $20 a tonne, what some companies are asking is - does it make sense to keep data centre operations on-shore?”

As soon as next week, the Federal Government could announce a carbon price that would be used to tax the burning of fossil fuels from July next year.

Blosch speculated that uncertainty around carbon pricing in the past few years, as well as the relative scarcity of renewable energy sources in Australia, might have curbed local data centre investments.

Microsoft served Australian users of its Azure cloud platform from data centres in Singapore and Hong Kong; Amazon from Singapore and Japan; and Salesforce.com from Singapore and the US.

Blosch highlighted IBM’s recent launch of a $61 million Auckland data centre for white-labelled cloud computing service providers, noting that New Zealand generated electricity from geothermal, wind, tidal and hydro sources.

“New Zealand enjoys a strong brand reputation as a green country,” he reported.

“IT services could and should fully consider the potential benefits of relocating storage to optimise and use emissions arbitrage alongside energy efficiency to achieve cost-effective and truly sustainable cloud, SaaS and other outcomes.”

Profits over sustainability

Longhaus research director Scott Stewart argued that service providers were more influenced by demand than they were by environmental sustainability and a carbon tax.

“The push for getting a slice of the cloud market is more dominant in [vendors’] minds than the cost of the carbon tax further on,” he told iTnews yesterday.

“Over time, we will see more sustainability-type initiatives come into play, [but] I haven’t seen any [vendor] saying that the carbon tax is going to inhibit or stall investments.”

Stewart speculated that economic drivers such as market size, labour and set-up costs – rather than environmental concerns – were behind vendors’ decisions to establish data centres in Asian countries, instead of Australia.

He said many of today’s data centres still used large, power-hungry chiller plants, highlighting a 2011 Greenpeace International report that criticised Google, Facebook and Apple for building data centres in places “where cheap and dirty coal-powered electricity is abundant”.

Greenpeace found that coal-generated electricity accounted for 34.7 percent of Google’s US power consumption; 54.5 percent of Apple’s; and 53.2 percent of Facebook’s (pdf).

It accounted for 49.4 percent of power consumption by HP’s UK and US data centres; 34.1 percent and 28.5 percent by and Amazon Web Services in the US and Ireland, and 51.6 percent by IBM in the US, Ireland and Singapore.

A spokesman for Amazon Web Services refused to speculate on the impact of carbon pricing on data centre plans, saying only that the company "plans to have more data centres in different countries and regions over time.

“When deciding on a data centre location we look at several different dimensions, such as the quality of the infrastructure, proximity to technical and business talent, and proximity to our customers," the spokesman said.

Australian banks and government agencies are currently obliged to keep customer information on-shore; however, both Stewart and Blosch forecast the emergence of ‘hybrid’ data storage models under which less sensitive testing and development environments could use off-shore facilities.

“To be honest, there isn’t much incentive to put data centres in Australia at the moment,” Blosch said, highlighting Gartner’s recommendation that data centre operators price the cost of carbon into their financial considerations.

Copyright © iTnews.com.au . All rights reserved.


Dirty energy keeps data centre builders at bay
 
 
 
Top Stories
Hockey flags billion-dollar Centrelink mainframe replacement
Claims 30 year-old tech is holding Govt back.
 
Ombudsman wants to monitor warrantless metadata access
Requests ability to report publicly.
 
Frugality as a service: the Amazon story
Behind the scenes, Amazon Web Services is one lean machine.
 
 
Sign up to receive iTnews email bulletins
   FOLLOW US...

Latest VideosSee all videos »

The great data centre opportunity on Australia's doorstep
The great data centre opportunity on Australia's doorstep
Scott Noteboom, CEO of LitBit speaking at The Australian Data Centre Strategy Summit 2014 in the Gold Coast, Queensland, Australia. http://bit.ly/1qpxVfV Scott Noteboom is a data centre engineer who led builds for Apple and Yahoo in the earliest days of the cloud, and who now eyes Asia as the next big opportunity. Read more: http://www.itnews.com.au/News/372482,how-do-we-serve-three-billion-new-internet-users.aspx#ixzz2yNLmMG5C
Interview: Karl Maftoum, CIO, ACMA
Interview: Karl Maftoum, CIO, ACMA
To COTS or not to COTS? iTnews asks Karl Maftoum, CIO of the ACMA, at the CIO Strategy Summit.
Susan Sly: What is the Role of the CIO?
Susan Sly: What is the Role of the CIO?
AEMO chief information officer Susan Sly calls for more collaboration among Australia's technology leaders at the CIO Strategy Summit.
Meet the 2014 Finance CIO of the Year
Meet the 2014 Finance CIO of the Year
Credit Union Australia's David Gee awarded Finance CIO of the Year at the iTnews Benchmark Awards.
Meet the 2014 Retail CIO of the Year
Meet the 2014 Retail CIO of the Year
Damon Rees named Retail CIO of the Year at the iTnews Benchmark Awards for his work at Woolworths.
Robyn Elliott named the 2014 Utilities CIO of the Year
Robyn Elliott named the 2014 Utilities CIO of the Year
Acting Foxtel CIO David Marks accepts an iTnews Benchmark Award on behalf of Robyn Elliott.
Meet the 2014 Industrial CIO of the Year
Meet the 2014 Industrial CIO of the Year
Sanjay Mehta named Industrial CIO of the Year at the iTnews Benchmark Awards for his work at ConocoPhillips.
Meet the 2014 Healthcare CIO of the Year
Meet the 2014 Healthcare CIO of the Year
Greg Wells named Healthcare CIO of the Year at the iTnews Benchmark Awards for his work at NSW Health.
Meet the 2014 Education CIO of the Year
Meet the 2014 Education CIO of the Year
William Confalonieri named Healthcare CIO of the Year at the iTnews Benchmark Awards for his work at Deakin University.
Meet the 2014 Government CIO of the Year
Meet the 2014 Government CIO of the Year
David Johnson named Government CIO of the Year at the iTnews Benchmark Awards for his work at the Queensland Police Service.
Q and A: Coalition Broadband Policy
Q and A: Coalition Broadband Policy
Malcolm Turnbull and Tony Abbott discuss the Coalition's broadband policy with the press.
AFP scalps hacker 'leader' inside Australia's IT ranks.
AFP scalps hacker 'leader' inside Australia's IT ranks.
The Australian Federal Police have arrested a Sydney-based IT security professional for hacking a government website.
NBN Petition Delivered To Turnbull's Office
NBN Petition Delivered To Turnbull's Office
UTS CIO: IT teams of the future
UTS CIO: IT teams of the future
UTS CIO Chrissy Burns talks data.
New UTS Building: the IT within
New UTS Building: the IT within
The IT behind tomorrow's universities.
iTnews' NBN Panel
iTnews' NBN Panel
Is your enterprise NBN-ready?
Introducing iTnews Labs
Introducing iTnews Labs
See a timelapse of the iTnews labs being unboxed, set up and switched on! iTnews will produce independent testing of the latest enterprise software to hit the market after installing a purpose-built test lab in Sydney. Watch the installation of two DL380p servers, two HP StoreVirtual 4330 storage arrays and two HP ProCurve 2920 switches.
The True Cost of BYOD
The True Cost of BYOD
iTnews' Brett Winterford gives attendees of the first 'Touch Tomorrow' event in Brisbane a brief look at his research into enterprise mobility. What are the use cases and how can they be quantified? What price should you expect to pay for securing mobile access to corporate applications? What's coming around the corner?
Ghost clouds
Ghost clouds
ACMA chair Chris Chapman says there is uncertainty over whether certain classes of cloud service providers are caught by regulations.
Was the Snowden leak inevitable?
Was the Snowden leak inevitable?
Privacy experts David Vaile (UNSW Cyberspace Law and Policy Centre) and Craig Scroggie (CEO, NextDC) claim they were not surprised by the Snowden leaks about the NSA's PRISM program.
Latest Comments
Polls
Which bank is most likely to suffer an RBS-style meltdown?





   |   View results
ANZ
  20%
 
Bankwest
  9%
 
CommBank
  12%
 
National Australia Bank
  17%
 
Suncorp
  23%
 
Westpac
  19%
TOTAL VOTES: 1516

Vote