The Manchester-based internet hosting company UKFast has launched a new green energy business that plans to invest £12.5m in hydroelectric power stations over the next three to five years.

With the backing of The Co-operative Bank, UKFast Energy has identified 11 sites in Scotland and Wales – one of which should be ready to start feeding green energy into the grid within 12 months. The business is also set to open a new £3m data centre at Trafford Park.

“Our industry uses a huge amount of power and we’ve spent the past few years looking at ways to reduce that amount,” said UKFast managing director Lawrence Jones. “I felt it needed someone in our industry to pioneer a new approach.

UKFast's first hydro electric power plant has been created at its training centre at Castell Kidwam in Wales, which has its own lake at the foothills of Mount Snowdon.

The scheme generates 800kw of electricity and is enough to power a significant amount of UKFast's servers but wasn't enough for their new £3.2m data centre.

Lawrence said: "We decided then to form UKFast Energy and invest in 11 hydro electric power schemes, which are all between two and three years into their development

In the meantime, in order to gain carbon neutrality with immediate effect, UKFast has invested in a series of existing hydro electric plants in Peru, Brazil and Turkey, offsetting more than 2,000 tonnes of CO2e (carbon dioxide equivalence).

Jones also confirmed that the business is set to open a new £3.2m data centre in Manchester later this year, testing is due to next month and it is scheduled to go live by the end of the year.

The new centre should help to fuel UKFast’s growth even further. In the year to 31 December 2009, the business reported a pre-tax profit of £1.8m, up from £1.2m a year earlier. Turnover increased from £6.4m to £9m for the same reporting periods. It expects it to grow to £14m in the current year.