Data centers: TICFE reduction subject to conditions from January 1, 2022

Brief reminder: an electricity bill is composed of three main elements. Approximately half of the costs consist of the electricity supply itself (contract and consumption); the other half is divided between energy transmission (approximately 20%) and taxation (approximately 30%), of which nearly all is represented by the Internal Tax on Final Electricity Consumption (TICFE).

This tax, established in 2004 under the acronym CSPE (Contribution to Public Electricity Service) and renamed in 2016, aims to finance spatial equalization (smoothing of electricity costs for all, including in areas difficult to access) and the development of renewable energies (wind, hydroelectric, and solar). Since 2016, the level of this tax has been set at €22.50/MWh.

Since 2018, data centers have been able to benefit from a reduction mechanism for this tax, subject to eligibility calculated based on the cost of the TICFE relative to the data center's added value. If eligible, a digital data storage center then benefits from a specific TICFE calculation, at the full rate for the first GWh, then at €12/MWh beyond that.

Concretely, for a data center with an installed available IT power of 2 MW and a load rate of 50%, and whose annual electricity consumption is 17.6 GWh, the TICFE reduction represents a substantial savings of nearly €175,000.

[Addendum: TICFE rates applicable from February 1, 2022 until January 31, 2024]

From February 1, 2022, a so-called "tariff shield" mechanism designed to limit the increase in regulated electricity tariffs was implemented. Thus, all TICFE rates are reduced to the minimum thresholds provided by the European Energy Directive, namely €0.5/MWh for businesses and €1/MWh for individuals and similar entities.
The Decree No. 2022-84 of January 28, 2022 on the reduction of electricity excise rates details these new rates applicable until January 31, 2024.

However, access conditions will evolve from January 1^st, 2022. The 2021 Finance Act indeed provides for conditioning this reduction on two criteria. First, the implementation of an ISO 50001 energy management system, to attest to a continuous improvement approach (consumption analysis and identification of improvement points).

In parallel, the company operating the data center must adhere to a program of best practices in energy management, recognized by a national or international public authority. This includes data center eco-design, optimization of energy efficiency, monitoring and reporting of energy consumption, and implementation of less energy-intensive cooling technologies, such as free cooling for example.

Adherence to the European Code of Conduct for data centers meets this second eligibility criterion. This framework, led by the European Commission and updated annually, defines 158 best practices around seven themes (IT equipment and services, cooling, electrical chain, etc.) divided into two categories: mandatory best practices and optional best practices.

For its part, the implementation of an energy management system, whose fundamental principles are governance, energy audit, monitoring, and continuous improvement, brings numerous gains in commercial, operational, and economic terms. It enables the promotion of actions undertaken, particularly externally (partners, clients), but it also provides tools, methods, and organizational structures for sustainable performance acceleration.

While the January 1, 2022 deadline may seem close, implementing an energy management system ex nihilo according to the ISO 50001 standard is perfectly feasible. In total, the overall workload can be estimated between 40 and 100 person-days over six to nine months for a complete cycle, from risk analysis to certification audit, including the phases of strategy and governance definition, deployment, and implementation of performance monitoring.

An achievable objective for the vast majority of data center operators, who have already begun the process for economic or business reasons, and who should quickly reach official certification.

To encourage companies to obtain ISO 50001 certification, it should be noted that ATEE (Technical Association for Energy and Environment) has established a dedicated assistance program, open until October 2022. This program, called PRO-SMEn, takes the form of a subsidy, intended to cover costs related to certification support services, and whose amount can reach 20% of the annual energy expenditures of certified sites, capped at €40,000. A valuable boost for data center operators to facilitate and guarantee the success of their ISO certification process.