Come for the tax, stay for the renewables? Denmark, Finland, Iceland, Norway, and Sweden to get more than €3bn data centre investment over next three years
The Nordics are hotly tipped to host the next data centre gold rush as the region eyes up more than €3.3 billion of data centre investments over the next three years.
What’s more, half of that investment is to come from companies outside of the region, which includes the countries of Denmark, Finland, Iceland, Norway, and Sweden.
Findings of a new report that looked at 112 data centre operators in the area found that the market in third party data centres will increase by almost two and a half times in m2 space and triple MW power requirements from current levels by the end of 2017.
Denmark alone is benefitting from tech giants eyeing up land for data centres, with Apple’s next Danish data centre a prime example.
Iceland is another country that provides its data centre vendors with acres of land and large volumes of renewable energy. Verne Global is at the centre of the Icelandic data centre hub, located in Keflavik’s old NATO airbase, it offers prime connections both west and east across the atlantic.
But why are these counties so sought after for new builds? It’s a mixed bag. On one hand, the countries have an abundance of not only real estate but of renewable energy sources such as wind power and hydro-electricity.
On one day in July of this year, Denmark managed to produce 140 percent of its population’s electricity needs by wind power alone, and even offset the extra to Germany, Norway and Sweden.
For power hungry data centres that are never far from the eyes of green advocates and governments clawing to reach energy targets, these countries provide a haven of renewable energy. On the other hand is the attractive tax breaks that companies can benefit from in the Nordics.
Electricity in itself comes cheap too. According to the reports author, BroadGroup, Data Centre Nordics, industrial electricity pricing in the Nordic Region remains the lowest in the EU-28 countries.
The report found that energy providers range as low as €0.03 per kW Hour, excluding taxes, with the Nord Pole (Ulea) region in Northern Sweden and Western Norway offering the lowest electricity costs for data centres.
“The Nordic Region is set for growth with new demand, build and market entrants,” said Philip Low, managing director, BroadGroup.
“Lower power costs, abundant resources of green energy, local and international investment, connectivity, taxation incentives, and natural cooling efficiencies present a formidable argument for consideration in the international IT deployment plans of any global enterprise.”
Whilst countries such as Ireland provided the initial tax benefits for larger technology companies looking to set up shop with data centres, we’re now moving into a period where the environmental aspect of data centres is becoming more and more relevant.
As this week, even China with its track record of environmental nonchalance has constructed a ‘green’ data centre that uses nearby lake water to cool its servers.
Overseas investment by players such as Google, Apple, Yandex and Facebook have strongly impacted the region, said the report, and in some cases influenced the emergence of digital eco systems.
So keep an eye on this regions, because we’re about to witness an explosion of activity in the ever-increasing data centre market.