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Concerned with Data Center Sustainability and Power? Look North
The Nordics are attracting AI and data center companies as a leading renewable energy hub, writes Andreas Myr.
4 Min Read
Image: Alamy
AI computing has been growing exponentially since it entered the global lexicon in 2023 In less than two years, it has developed a reputation for being an energy-hungry and water-consuming detriment to the climate.
As the AI-specific need for data centers increases significantly, companies are seeking sustainable capacity globally. The Nordics have drawn the interest of AI companies due to the region’s position as a renewable energy hub.
The benefits of Norway, Sweden, Finland, and Denmark are coming to light, and below are a few strong reasons to consider the Nordics for data center capacity:
The Nordics are committed to renewable energy sources such as hydroelectric and wind to provide data centers with a reliable and sustainable energy supply. For example, the government of Norway states that “98% of its electricity production comes from renewable energy sources,” which ensures a carbon-free energy source to power data centers.
The region offers naturally cold temperatures, reducing the need for extensive mechanical cooling. Since AI and IT workloads run at a very high density, this means more heat is generated. Therefore, air and water cooling are needed at the rack and chip. At the rack, the cool outside air allows for a very efficient approach to heat removal from the data center white space. The cold waters result in lower energy consumption and lower operational costs when cooling the chip.
Known for its stable political environment, this region provides a secure location for data – minimizing the risk of disruption.
The Nordic region boasts a well-developed and reliable telecoms infrastructure, including high-speed internet connectivity and advanced telecommunications networks, facilitating efficient data transmission and communication. The area is geographically close to major European markets, providing low-latency connectivity for data transmission between data centers and users in Europe.
Other benefits include a low risk of earthquakes, hurricanes, or floods, reducing the risk of downtime for data centers caused by natural events.
Its advanced infrastructure and proximity to major European markets make the Nordics an ideal location for customers.
An Abundance of Renewables
The Nordics boast renewable energy resources, including hydropower, wind, and geothermal power. These options provide the type of energy needed to power data centers without relying on fossil fuels, reducing carbon emissions and environmental impact. For example:
With their many rivers and waterfalls, the Nordics – Norway, and Sweden, in particular – offer extensive hydropower. Hydropower is known for its low environmental impact and high efficiency, providing a consistent and reliable source of clean, renewable energy.
Denmark has invested heavily in wind power, utilizing the strong winds along its coastlines to generate electricity.
Iceland has a unique stranded power situation, meaning all power in Iceland is generated from renewables. According to Baseload Power Japan, “The power supply in Iceland consists of a whopping 100 percent renewable energy, with 70% consisting of hydroelectric power and 30 percent geothermal power.”
In the Nordics, data centers can significantly reduce their carbon footprint and cost. Green energy infrastructure ensures the resilience and longevity of data center operations, reducing dependence on volatile energy markets. Renewable power can also be future-proofed with long-term power contracts.
Long-Term Power Contracts
The abundance of renewable energy sources offers a predictable and stable energy supply, making prices competitive with those of other regions. The Nordics have made significant investments in energy infrastructure, including transmission lines and power generation, ensuring energy supply reliability and availability.
The region also offers flexible contract terms, pricing structures, volume commitments, and renewable energy guarantees. Long-term power contracts provide stability and predictability in energy costs and help businesses mitigate risks associated with fluctuations in energy markets and volatile fuel prices.
Government Support
The Nordics are known for their political neutrality and non-aligned status. Therefore, this region is less likely to be destabilized or overthrown by violence.
This can be appealing for companies seeking to host sensitive data due to the unlikeliness of it being compromised by political unrest.
Governments are continuously releasing sustainability policies that are likely to meet or beat customer sustainability requirements in their home countries:
The Swedish government released the Electricity Certificate System to ensure energy is used through renewable energy sources.
Denmark launched a Green Tax Reform and green R&D.
Nordic governments have implemented policies and incentives to promote renewable energy development and sustainability. This support comes from subsidies, tax incentives, and regulatory frameworks that encourage investment in green energy projects, including data centers.
The Nordics' stable political systems and well-established regulatory frameworks provide a reliable environment for long-term business agreements, including power contracts.
Location, Location, Location
In short, the Nordic region should be a consideration for a data center location. With the rise of HPC applications, including AI, machine learning, and deep learning, the advantages of the Nordics are evident. Well-positioned with a renewable and reliable power supply, the Nordics provide efficient and reliable power.
Companies that want data centers in the region should understand that there are plenty of renewable power sources, and stable and pro-sustainability governments offer exceptional tax benefits in the area, enabling data centers and their customers to exceed their business and sustainability goals.
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