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By 23 May 2010 No Comment

Earth2Tech.com, which is part of the GigaOm empire, estimates What A Price on Carbon Would Cost Data Center Operators (May 21).

The answer: A fair bit:

Considering an average 125,000 foot data center could cost around $10 million a year to operate, a price on carbon created by emissions reductions legislation, like the U.K.’s Carbon Reduction Commitment, could potentially double the operating cost. According to estimates from a report from MIT and Carnegie Mellon, Google spends about $38 million annually on electricity for data centers, Microsoft, $36 million per year, Rackspace $12 million, and Akamai $10 million.

This is not really the big potential hit, though. The natural gas industry has ponied up an $80 million kitty directed at killing the coal industry by regulatory strangulation at both the state and federal levels. At present, coal supplies about 50% of electricity; gas about 20%. According to the Energy Information Administration, the cost of natural gas is $4.16 per million BTUs; coal is less than half this, at about $1.80 per million BTUs. New sources of gas may be ready to come on stream, but they require advanced extraction techniques which will be more expensive – maybe $8 -$12 per million BTUs. So big energy users could be looking at 4x to 8x multiples of fuel costs over the not-too-long term.

And if the techies think they can sit back and congratulate themselves on having locked up the sources of cheap hydropower, they have a lesson to learn on the realities of the political process. If costs of electricity and home heating take a big jump, the pain will be shared.

Besides, according to a recent piece in MIT’s Technology Review, Natural Gas May Be Worse for the Planet than Coal. My, it is hard to keep up with one must think to remain bien pensant these days.

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