CCA for data centres

About the CCA

This webpage provides information and signposts to free resources and guidance on the Climate Change Agreement for data centres.  As the law only came into force on 1st July the resources are still being assembled. 

Stay up to date with developments and share information regarding the CCA process by joining our CCA User Group. This group will focus on the many questions generated by the registration process as companies familiarise themselves with the scheme. As scheme engagement matures, the group will focus more on best practice. This group is open to techUK members, as well as to non-member's provided they are data centre participants or potential participants. To join the group please email lucas.banach@techuk.org

What is a climate change agreement?

Climate change agreements (CCAs) are negotiated arrangements between government and energy intensive sectors. Around 50 sectors are already covered and the scheme has been running since about 2001. In return for a reduction in or exclusion from paying some carbon taxes (CCL and CRC), participants are given energy efficiency targets. These targets are sector-specific so they can be focused exactly where they can deliver the most benefit. To date, CCAs have delivered greater energy savings among participating sectors than conventional policy measures would have achieved. Because CCAs accommodate growth by focusing on energy efficiency instead of net reductions, they are particularly suited to drive efficiency improvements in sectors like data centres that are energy intensive, growing fast, and vulnerable to overseas competition.

Who is eligible?

Data centre businesses providing colocation space (both wholesale and retail) are eligible. We agreed the formal definition of an eligible facility with DECC in March (see box). While the wording is somewhat obscure, it refers to colocation providers. A facility will be classed as colocation if it houses third party computing assets (i.e. servers). Space used to house servers that provide corporate IT function for the operator is ineligible. Once the scheme is up and running for this cohort of data centres we will seek to expand it to cover enterprise operators. TechUK is administering the scheme and we are asking potential participants to register their interest. You do not need to be a techUK member to participate – it's open to all. Please get in touch if you are not sure whether you are eligible.

What are the benefits?

If you pay CCL and CRC, the value of the CCA rebate is around £27 per tonne of carbon (CCL is around £10 per tonne and CRC is around £16 per tonne). This is made up of a 90% rebate on the CCL, (0.541 p per KWh of electricity from 1 April 2014), and the exclusion of energy captured under the CCA from CRC (equivalent to 0.867p per KWh from 1 April 2014). In normal language this means that the combined benefit is 1.35p per KWh of electricity.

Is it, like, free money?

No. A climate change tax concession can only be granted if energy efficiency can be improved by alternative means. So you have to work towards efficiency targets. The sector target has been agreed as a 15% decrease in PUE by 2020 over a 2011 baseline. Individual site targets will be expressed as a 30% reduction in non-IT energy over the same period. This approach spreads the reduction requirement more fairly and avoids punishing early adopters who already have a low PUE. PUE will be measured on the basis of total energy to site divided by total energy to the IT (similar to Green Grid PUE 2) The targets will be revised in 2016 when we expect to have more sophisticated metrics and standards available. The targets are not punitive and they are designed to allow growth while encouraging good energy stewardship.

What are the timescales?

The CCA for data centres became law on 1st July 2014. Soon the Sector Agreement will be signed by techUK and in the meantime participants can register for the scheme. Each participant will then sign their Underlying Agreement and for them the scheme starts on the day they submit that signed Agreement. We have to sign agreements because we have to undertake to meet efficiency targets. We anticipate that companies will be in a position to claim their CCL rebate / CRC exemption from some point in August.

Should we be getting on with anything in the meantime?

Yes you should. Firstly you should check your eligibility by contacting either the helpline or the techUK contacts listed on this document. Then you need to check that your energy data is fit for purpose and that you can demonstrate that you have a minimum of 12 months auditable PUE data for each participating site. If you haven't got the IT function sub-metered then you need to implement this. Do make use of the free resources, advice and guidance available to you using the links listed below.

Should we still register for CRC?

Yes, if you are obliged under CRC you should have registered for phase II. As soon as you sign your CCA agreement then the energy covered by it is excluded from CRC. This can't be backdated.

What if we buy certified green power and therefore have CCL exemption?

If you don't pay CCL because you buy certified green power then you can have a CCA but you don't get the CCL rebate (you can't have a rebate on something you haven't paid). However you still get the benefit of your energy being excluded from CRC by participating in the CCA. See our separate guidance note about green power and the CCA.

What about EU ETS?

ETS takes priority over CCA so if you are captured under EU ETS then your scope 1 emissions still have to be reported under ETS. This excludes electricity which is scope 2.

 

What do we need to do next?

For further information please contact emma.fryer@techuk.org 

To register interest in the scheme please contact techuk@slrconsulting.com 

 

Useful contacts:

· CCA helpline telephone: 0844 800 1880

· Email: techuk@slrconsulting.com

 

New CCA guidance materials:

CCA First Target report final - download

CCA Second Target report final - download

 

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