Data centre operators have hit back at a British building firm's assertion that high electricity prices in the UK are forcing companies to move their data centres abroad.
In an article in the Times newspaper last week, building consultancy McBains Cooper said that British electricity prices are the third highest in Europe, and are forcing companies to locate power-hungry data centres in other countries.
"The main issue is power, power and more power," Derek Webster, associate director said in the article. "Digital Britain will need massive data centre capacity to accommodate what the Government is planning, but the average data centre uses as much power ... as a city the size of Leicester."
But the idea that power cost and constraints in the UK are forcing companies to build their data centres elsewhere received short shrift from a number of data centre operators.
"Webster based his assumption on figures calculated in the recent European Household Electricity Price Index for Europe (HEPI) that excluded distribution and taxes," said Phil Lydford, chief executive at e-shelter UK. "The cost of producing power is expensive in the UK, but once these additional costs are added, UK electricity prices are actually some of the cheapest in Europe."
"The retail cost of electricity is rather different to the cost of electricity for commercial organisations", Lydford told Techworld. "Commercial organisations buy power in a different way, and it is hard to get an average figure of wholesale prices as businesses tend to buy their power in specific deals. We sometimes buy some power three months or a year in advance, from different providers, and we may also work with power brokers who can source cheaper electricity for us."
"And power for data centres is not only about cost, but how reliable it is, the certainty of supply," he added. "In the UK, the grid and distribution network is constructed with very high redundancy standards."
Lydford also doesn't feel there a power shortage in the south east of England. "It is really a question of scale," he said. "If you have a small data centre, you can get 5 megawatts of power in London, but if you want a big data centre, with high power demands, it may be more difficult. That said, power is always available, but it is a question of how long you have to wait."
"The example quoted in the Times article that Santander decided to build a data centre in Madrid instead of in London probably had more to do with them wanting to build it near their headquarters than electricity," he added.
And what about latency? "Latency is only an issue if latency is an issue," said Lydford. "If you are Google or Amazon, with a network of data centres around the world, if it takes half a second to get a response to a search, it is not the end of the world. But if you are a bank, with regulations stating that they have to have a ‘hot standby' of their data, you have to be within synch reach for secondary site of your primary site, then latency is an issue."
Greg McCulloch, MD of Interxion UK agreed. "Latency is a huge issue for financial institutions, every second can cost them millions of pounds," he told Techworld. "We don't think someone would move their headquarters such a long way for a few pence difference in electricity prices," he said.
"The UK has the infrastructure in place, and it is constantly evolving," McCulloch said. "If everyone decided to move their data centre to Spain, then what happens in six months time is that they become power constrained in Spain."
The UK is a big hub for data centres in Europe," he said. "We don't see data centres moving aboard, indeed we see more capacity coming on line in the UK, with more competitors building in the UK," he said. "I can't see for the life of me someone packing and moving aboard because of electricity prices."
"We know the countries that are expensive for power, and there a couple of countries with much higher electricity costs than the UK. Plus there are countries that are cheaper. In the end, electricity costs often rise like steel and oil prices, and they fall as well."
"We keep closer to London because of closer links to the Internet exchanges, more access to multiple carriers, power, and latency - which is a big factor for us," he added. "We do have a server hugger mentality for want of a better word. We have looked at facilities further out, but discounted because latency is just not as good, plus we have customers saying they don't want to go that far."
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