Lombardy increases charges for the construction of data centres in green areas

https://en.ilsole24ore.com/art/lombardy-introduces-increased-charges-of-up-to-200-per-cent-for-data-centre-construction-in-green-and-agricultural-areas-AI6Jp4ID

by napolux • 2 months ago

142 97 2 months ago

en.ilsole24ore.com

phendrenad2• 2 months ago

Sure, why not. But if you drop an AI datacenter in the middle of an agricultural area, you won't be able to find it. Because AI datacenters are actually tiny by comparison.

rvz2• 2 months ago

Cryptocurrencies never needed so much data centers as there are many alternatives to the worst one (Bitcoin) that improved their performance and there are environmentally friendly alternatives.

LLMs on the other hand have an insatiable requirement for trillions of dollars of data centers, causing memory prices to skyrocket, companies to layoff staff to increase capital expenditure on even more data centers instead of improving the software to run these models.

There are no 'environmentally friendly' alternatives to LLMs and this tax tells you everything you need to know why it exists.

utopiah2• 2 months ago

Is it inherent to the architecture of LLMs/GenAI or rather is it because VCs fund what they can capture and others can't fund?

perks_122• 2 months ago

Datacenters need cheap energy, something no region in Europe is having in abundance (except maybe Norway, Sweden, and Finland). I don't think Lombardy was seeing too much DC construction. It's just typical green politics. Forever backwards.

Sure, people feel somewhat AI-fatigued, but blocking the future won't play out nicely for Italy or Europe in general.

rvz2• 2 months ago

But blocking the future won't play out nicely for Italy or Europe in general.

Maybe find scalable alternatives or software optimizations that do not require the worlds energy or building even more data centers everywhere and further burning up the planet?

josefritzishere• 2 months ago

Pretty sure blocking it will work perfectly.

r_lee• 2 months ago

wow, I'm so excited for this "future" where everyone is laid off and miserable

perks_122• 2 months ago

The way I see it, we hit a ceiling with the capabilities of AI. Singularity will most likely not happen (not with the resource hunger of current methods). What remains are incredible tools to help remove the most tedious tasks from everyone's work.

b65e8bee43c2ed0• 2 months ago

it's happening whether you like it or not.

qalmakka• 2 months ago

As an Italian, I second that this is clearly a populist manoeuvre. Nobody in their sound mind would ever build a big datacentre in Northern Italy, the energy costs are way too expensive. There is no untapped hydro power available, fossil fuel is obviously always going to be more expensive than elsewhere, no nuclear power and you can't roll in a massive solar array with batteries due to how cramped the Po Valley already is. It would ironically make more sense to build it in Southern Italy, where once the political issues are sorted out, the access to wind and solar power are way easier and there are a lot of underdeveloped areas.

But yes, in general Italy (or Europe, maybe except France or Northern Europe with hydro power) isn't the best place to build data centres.

blocking the future won't play out nicely for Italy or Europe in general.

I think you're somewhat misunderstanding how things in Italy have been working for the better part of the last 2 decades. I am 95% certain that this measure was passed *precisely* because it had zero concrete political downsides. Italian political culture thrives in draconian or purely populist measures that end up being absolutely irrelevant or unenforced (with some terrible miscalculation every once in a blue moon, see the closure of nuclear power plants). You ban something, you get the political clout of doing that, and then nobody actually checks whether the government ever attempted to enforce that law, or that nobody was going to do it in the first place.

Trust in me when I say, if building datacentres in Italy were economically sound nobody would have wanted to pass this measure

napolux5• 2 months ago

Just read the article

There are already 33 active data centres in the Milan metropolitan area alone; a further 10 are under construction and 23 under evaluation.

Sometimes you will need to do stuff even if energy is not cheap. Come on (I’m italian too)

bjohnson225• 2 months ago

The European Data Centre Assocation is expecting the highest growth rate in Europe to be in Milan and Madrid.

"The selection of tier-2 metropolitan areas shows that overall, they are growing faster than market average. Madrid and Milan are clearly taking the lead and are both able to attract the biggest additional investments. It can safely be said that they are on their way to becoming additional tier-1 locations."

https://www.eudca.org/documents/content/ZlZXb4bRSRefaEVqya2I... (downloads a pdf)

Trust in me

No, because being Italian doesn't mean you know anything about this. Most Italians think the primary Italian exports are mozzarella and tomatoes.

vrganj4• 2 months ago

You speak of the future as if it were some certain inevitable thing.

The future is what we as humans decide it to be.

Many humans don't like this vision of the future, where we burn our planet so as to concentrate even more power in the hands of the super wealthy. This is them shaping their own future.

joe_mamba4• 2 months ago

The future doesn't always care about what the majority wishes since not everything is up for debate, like for instance the creation and deployment of nuclear weapons, or whether your neighbor or allies suddenly decide to invade you.

stymaar• 2 months ago

Datacenters need cheap energy, something no region in Europe is having in abundance (except maybe Norway, Sweden, and Finland). I don't think Lombardy was seeing too much DC construction

There's a contradiction between your two first sentences…

Tade0• 2 months ago

It's just typical green politics. Forever backwards.

I believe it has more to do with preserving the landscape that attracts so many tourists.

Solar farms in Italy faced resistance for the same reason.

It's not green politics.

monegator• 2 months ago

It's just typical green politics. Forever backwards

No. In northern italy alone we have tens of thousands unused warehouse spaces.

Let's use that space for datacenters and solar farms instead of destroying forever yet another plot of fertile land.

If data centers will also bring nuclear to power them, i'm all for it. But let's be honest: realistically they will be powered by coal, maybe gas.

As to why we have so much unused warehouses: some legally have no owner, some have declared bankrupcy and will be leased at absurd prices (it will cost half to build a new one), some were costructed illegaly and all stay there in the limbo because the local administrations would have to pay to reclaim the land

napolux5• 2 months ago

I don't think Lombardy was seeing too much DC construction

read the article:

Lombardy alone accounted for 63% of the applications submitted throughout Italy.
There are already 33 active data centres in the Milan metropolitan area alone; a further 10 are under construction and 23 under evaluation.
If the Milan hinterland is the most 'targeted' area, an increase in interest is also registered in the other provinces: in the rest of Lombardy there are three already active, plus one under construction and five under evaluation.

swiftcoder2• 2 months ago

Datacenters need cheap energy, something no region in Europe is having in abundance (except maybe Norway, Sweden, and Finland)

I think you are discounting the speed at which solar is accelerating in southern Europe. Power is already pretty much free during the daytime on the Spanish and Italian grids, and grid-scale battery installations are starting to come online to spread that curve wider.

re-thc• 2 months ago

built in green/agricultural areas

So they want them in other areas instead? Like next to residential area?

I'm not sure they understand the implications...

utopiah2• 2 months ago

Just had to read few more paragraphs : "the use of disused former industrial areas is favoured. In this case there are no additional burdens, but rather the law proposes bureaucratic simplifications."

It's even in bold "the use of disused former industrial areas"

jamespo• 2 months ago

Perhaps an AI summary would have helped here

john_strinlai• 2 months ago

Like next to residential area?

or... industrial areas?

oersted4• 2 months ago

Indeed, I don't quite understand the issue. I get that the data centers are big and expensive, but they must be nothing compared to any ordinary heavy-industry site right? In all aspects: space, pollution, energy, water...

napolux5• 2 months ago

old industrial areas, which sometimes are pretty far from residential ones

PowerElectronix• 2 months ago

Who needs computers, anyways

amluto4• 2 months ago

To me, datacenters, especially for AI (which tolerates an extra hundred ms of latency quite well) seem like an unusual form of development. Many forms of development have similar downsides: they destroy green space, they can be noisy, they compete for energy resources [0], etc. On the flip side, though, most new developments add substantial value: jobs, tax revenue, increased industry around them, local availability of their outputs, etc.

Datacenters are weird: they come with the negatives (although, per unit energy consumption, they’re relatively innocuous), but they seem to be missing most of the regional benefits. They don’t create many jobs. They pay little in taxes. They don’t actually produce anything that makes anyone else want to further develop the surrounding area. Their outputs offer little benefit to the community that wouldn’t be provided nearly as well by a datacenter somewhere else.

So I actually get why it makes sense to support development but oppose new datacenters. Or to have an added tax on datacenters so that at least some economic benefit is captured.

As an interesting contrast, a colo facility is a bit different: I want to have colo datacenters near by so that I can use their services. But this isn’t what the new development is about.

[0] Some of which are finite in a given region or are preferable not to use. (But don’t forget that more energy use = increased production in the long term, which can be a very good thing.)

morpheuskafka• 2 months ago

A warehouse or factory would have more jobs, but would also bring massive truck loads to the local roads and corresponding pollution. The low staffing of datacenters means that one they are built there is little transportation impact.

thefz2• 2 months ago

And there is almost zero value generated locally.

znpy2• 2 months ago

A warehouse or factory would have more jobs,

It would add low value-added jobs though (unskilled labor). Datacenters add high value-added jobs (skilled labor).

Only looking at the headcount is shortsighted imho.

vessenes2• 2 months ago

Why don't they pay much in taxes? hyperscalers are pretty profitable.

zdragnar• 2 months ago

The hyperscalers aren't making sales directly from the data center, so there's not much to tax other than the land value, the electricity they use, and the few employee salaries.

You'd need some sort of data ingress/egress tax.

palmotea• 2 months ago

Why don't they pay much in taxes? hyperscalers are pretty profitable.

I wouldn't be surprised if those profits are re-imagined as costs paid to some entity in a tax-haven.

Also there's different kinds of taxes. IIRC, local communities get their revenue from sales taxes and property taxes. A data center doesn't sell anything, so they probably get zero from that. I don't really know how they'd factor into property taxes, because they're a blight and I don't know how the locality would assess their value without comparable transactions.

GuestFAUniverse• 2 months ago

Where? What do you tax? Per request?

They will shuffle most gains around to the place with the lowest taxes. E.g. by internally buying and selling (overpriced) services.

The only realistic tax is coming from the jobs that serve those data centres (builders, maintenance, that little IT staff left for on-site jobs). And those are rather low margin jobs.

notrealyme1232• 2 months ago

Because company profits are booked at their European HQ (so Ireland or Luxembourg).

So there is little profit being taxed at the Datacenter/country Level.

oersted4• 2 months ago

I'm confused, do they really have such an impact? They are of course big and expensive, but surely most datacenters are relatively innocuous in terms pollution and general disruption to the area compared to any regular heavy-industry site, right? Please let me know if I'm wrong, I'm not sure.

EDIT: I do get it, it is mainly about local benefit not really about pollution or disruption, even if they are loud about that because it sounds better. Local municipalities should definitely charge significant land rents or zoning fees so that the community benefits. China has been very successful at this for decades.

EDIT: Very rough overview after some research, using Colossus 1 as reference, which is among the biggest GPU deployments. Not thoroughly verified, but it'll be around the right ballpark.

- Electricity: 150 MW live, with another 150 MW planned/studied. That is like adding a medium electric-arc steel mill or large chemical plant to the grid. A small standard power-plant can generate about that much.

- Land / space: About 217 acres and 785,000 sq ft. Footprint-wise, that is like a large factory campus or logistics park; much smaller than a mine, port, refinery, or industrial farm, but far beyond a normal commercial warehouse.

- Water: Roughly 1.3–3M gallons/day in public estimates. That is comparable to the consumptive water use of a small-to-mid steel plant or a large industrial cooling site; not refinery-scale, but locally significant.

- Air pollution: The servers are not the dirty part; the issue is on-site gas turbines/generators. That makes it more like a small gas peaker plant than a steel mill or chemical plant. Colossus 1 reportedly used up to 35 gas turbines before grid connection.

- Noise: Mainly cooling equipment, substations, batteries, turbines/generators. More like living near a substation or small power plant than near a mine, port, or metalworks.

- Traffic / logistics: Heavy during construction, then relatively light. Much less disruptive than a port, mine, farm, steel plant, or refinery, because there is no constant flow of ore, scrap, fuel, chemicals, crops, containers, or waste.

- Heat: Nearly all consumed electricity becomes heat. At 150–300 MW, the heat rejection is industrial-scale, closer to a small power station / large process plant than normal manufacturing.

toyg• 2 months ago

Heavy-industry sites are also extremely discouraged across Europe, outside of very specific zones. If anything, the current shift is about bringing datacentres in that same category.

vitally3643• 2 months ago

The noise pollution is quite significant in the immediate area, and the heat output notably raises outdoor temperatures in a surprisingly wide area. That also of course ignores air and water pollution caused by the increased demand on electricity generation (or jet turbines spun up in the parking lot).

But the point is they suck up land and resources for no material or economic benefit to the local population. There's absolutely no reason to build these things in or even near cities. They can be built in the middle of nowhere where they don't bother anyone with zero impact on the services they provide.

thefz2• 2 months ago

Noise pollution is huge and water usage is through the roof which could worsen the effect of droughts where water is already scarce. Not to mention the imbalances they generate on power distribution.

jmyeet• 2 months ago

It's worse than that. Data centers aren't a net zero for the area, they're a net negative. They use up water, arguably pollute said water [1], they jack up the price of everybody's electricity (because everyone else ends up paying for the extra infrastructure), can cause pollution directly (eg xAI runs highly-polluting gas turbines in a city through a legal loophole of them being "mobile" [2]) and aren't the quiet, unseen facilities proponents make them out to be (eg [3]).

On top of all that they typically get massive subsidies and tax credits. Why? Because the DC might go somewhere else, allegedly. Where? Nobody wants it. Everybody knows the politicians approving all this are getting bought or just coerced.

I'd love to see a single example of where one of these data centers was welcomed by the community or somehow a net positive.

[1] https://www.bbc.com/news/articles/cy8gy7lv448o

[2] https://earthjustice.org/case/xai-illegal-gas-power-plant-da...

[3] https://www.nbcwashington.com/news/local/northern-virginia/n...

znpy2• 2 months ago

they destroy green space

the law addresses exactly this. it greatly overtaxes datacenter in green spaces and lowers taxes in former industrial areas.

Regarding whether it's a good development drive... I can tell you, most companies could save a shitload of money by buying a few pallets of machines and racking them in a... datacenter.

I see our monthly AWS bill, I highly doubt we'd be spending that in datacenter bills.

sieve• 2 months ago

Datacenters are weird

In the same way that most public utilities are: train stations, railway lines, airports, garbage dumps, sewage treatment plants, military bases and a hundred other things. The negatives are concentrated to the locality and everyone else reaps the benefits.

I get it if you wish to put a 99% self-sufficiency condition (water/power etc) but everything else reeks of luddism and nimbyism.

suddenlybananas• 2 months ago

train stations, railway lines, airports, garbage dumps, sewage treatment plants, military bases

All of these create a ton of jobs in the local area and many of them provide massive advantages to the local area (except railway lines if you're not near a station I guess).

notarobot1232• 2 months ago

The point is that most utilities like transport infrastructure and sewage treatment benefit local residents and the broader society directly. Datacenters are not utilities in the same way and have a much narrower social impact.

amluto4• 2 months ago

I think you're missing my point.

A sewage treatment plant may or may not be stinky, but I very much want to live in range of one so that my sewage gets treated. Similarly, living near a railway line means I can ride the train. Living near a landfill means that my trash can be managed at reasonable expense. Living near a military base adds huge potential economic value and nominally keeps me safe. Living near a giant AI inference or training facility? Meh -- I could use its services just as easily if it were 1000 miles away.

dsign2• 2 months ago

I would bet, 55% chance, that in 15 to 20 years that region will be filled with autonomous farms. Companies mostly run by AI, and labored by agricultural bots. Not an outcome that, even then, people will want. But we rarely get what we want.

notrealyme1232• 2 months ago

That's very close to a coin flip.

jayGlow• 2 months ago

I thought we wanted robots to take over the boring and back breaking jobs?

dsign2• 2 months ago

Well, of course. Of note, this region in question has a problem with a dearth of young people and specially young people wanting to take those jobs, and if it voted right-wing and populist, you don't need me to tell you what kind of solutions they don't like to their demographic issue.

dfxm12• 2 months ago

My Italian is not as good as it used to be. Does anyone know what the current tax is? I mean, is this going from 1% -> 2-3%, or is it a more meaningful increase?

napolux5• 2 months ago

Nothing is taxed al 1% in italy, not even basic food (4%)

Bender2• 2 months ago

I am usually apposed to any tax on anyone or any entity for any reason but I am also jaded after a lifetime of seeing taxes almost entirely go to fraud waste and abuse that only grows with time and very rarely ever shrinks. me and my weird fantasies about implementing the code of bushidō in all governments world wide.

This will be an unpopular opinion as I have many but if these taxes are allocated 100% to offsetting taxes and costs for the farmers then I would support it but I am not in Italy so thankfully it does not matter what I or most people think. Farmers have thin margins and have to compensate for weather that they do not control. They are also very under appreciated which is bizarre to me given they provide our food.

sagarm• 2 months ago

Isn't there already enough graft directed towards farmers?

Bender2• 2 months ago

Yes and no. There is money allocated to grow specific crops and if it were up to me that would vanish. Farmers would go back to growing what the economy was demanding and not artificially propping up corn for ethanol.

I would take vehicles in two directions. EV's where it makes sense and hyper efficient hybrid vehicles that emit clean exhaust and get 150+mpg to fill some EV gaps until battery tech progresses quite a bit more.

jgbuddy2• 2 months ago

This is surely a huge blow to all the hyperscalers looking to build datacenters in the agricultural regions of Italy.

zuzululu• 2 months ago

EU consumers will foot the bill by paying more and lagging behind America

napolux5• 2 months ago

Read the article man, Lombardy is basically in the center of Europe, compare Milan with Los Angeles and see how small it is actually

There are already 33 active data centres in the Milan metropolitan area alone; a further 10 are under construction and 23 under evaluation.

If the Milan hinterland is the most 'targeted' area, an increase in interest is also registered in the other provinces: in the rest of Lombardy there are three already active, plus one under construction and five under evaluation.

jgbuddy2• 2 months ago

Agreed- my comment was tongue-in-cheek.

eur0pa• 2 months ago

Good.

epolanski• 2 months ago

I think that's mostly virtue signaling.

Italy isn't a particularly attractive place to run data centers for different reasons, starting from the very high cost of energy.

j-bos• 2 months ago

If they invested a token of the budget into making data centers look beautiful that'd probably reduce the push back by like half.

lormayna• 2 months ago

Italian here: as the first reading, I thought it was an usual decision against progress and technology. But reading the article it seems a good sense rule: Lombardy was one of the most industrialized zones of Europe and now is migrating to a post industrial model. This law should force reusing the old and unused industrial spaces instead that wasting space in agricultural areas.

collabs• 2 months ago

if we can tolerate latency for AI data centers why not build them in the middle of nowhere with solar panels, huge battery banks, and fiber connections? What am I missing? It is truly doable now though with sodium batteries. It is more expensive sure but it is doable. We need to not subsidize these data centers first though. These things need to pay their full cost including environmental cost.

latentframe• 2 months ago

AI infras is starting to run into the same land using and energy also as heavy industries : when the datacenters compete for grid capacity water and industrial land at scale the local governments just stop treating them like just advanced softwares

pjmlp• 2 months ago

Unfortunately big tech will just pay it, they should be forbidden in first place.

Lombardy increases charges for the construction of data centres in green areas

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