If you pair those two opposites and add carbon regulation, you end up with volatile energy prices, Smith warns. "For end-users like those of us on the datacenter side that consume quite a bit of energy, the main impact is: You need to plan for the volatility of your energy costs. Things are going to change. I can't tell you exactly how they are going to change because it remains to be seen, but you need to be prepared for changes in your budgets and your actual costs."
Think beyond your borders
Leaders at U.S.-based organizations with datacenters (or other operations) in Europe shouldn't ignore U.K. regulations, Smith warns. The United Kingdom recently passed an emissions trading scheme called the Carbon Reduction Commitment (CRC), which aims to reduce carbon emissions in large, non-energy-intensive organizations by 1.2 million tons of carbon per year by 2020. The CRC will have an impact on datacenters.
"If your company has operations in the United Kingdom and you are operating a power bill of scale, you are subject to CRC. And CRC is going to deliver a mechanism whereby you have to report your power usage, you're going to pay a tax on that usage in the future, and then depending on your performance, you may get all of that back or your peers may get some of that tax delivered to them if they improve more than you," Smith explains.
Start your measuring
If the prospect of lower energy bills hasn't led your organization to measure energy consumption, perhaps the threat of regulation will. "In terms of this criminal penalty perspective, senior management teams are at risk, and that by itself will generate the legal analysis that everyone needs," Smith says.
[ Technology providers such as CA are offering increasingly sophisticated tools for measuring energy consumption and carbon emissions. ]
Thus, companies need to get a move on measuring CO2 emissions and preparing to report them. "If you are not prepared to report, you're going to run afoul specifically of the CRC regulations. And in other markets [where these regulations are planned], pan-European markets and the U.S. market, the first phase will also be reporting. The governments and regulatory agencies are going to want to know what's happening out there and you are going to need to report," Smith says.
Watch the video of Smith in its entirety.