Iceland plans to become a hub for data center construction, and it looks like so far everything is going according to plan
Most corporations know how to count money – this is why they open headquarters in regions with fiscal policy loyal to business. In addition, the desire to save money leads to the development of projects for the construction of data centers in countries with very cool climates. These are Finland, Norway, and, of course, Iceland.
This tiny country does not have many resources that can be used, so the state is trying to attract the telecommunications business with what it has – natural conditions. A cool climate that allows you to reduce energy costs for cooling data centers, as well as the presence of geothermal zones that are able to supply this same energy in excess are positive factors for IT. What is happening at the end of the earth now?
For several years now, the country’s authorities have been trying to offer business various perks that will allow Iceland to become one of the world’s IT centers. Now the government launched the largest program in the history of the state to attract data center operators.
Iceland has other advantages besides inexpensive energy and low average annual temperatures. For example, this state is a member of the WTO, the EU and the European Economic Area. It gives duty-free access to resources for representatives of EU countries. In addition, Iceland cooperates with other states outside the European Union. For example, China and the United States. The corporate tax is not as small as it might seem – 20%. But this is one of the lowest taxes in the entire EU. At the same time, some large-scale projects can be paid for in foreign currency.
The country also has a good Internet infrastructure, being “connected” to both North America and Europe through several fiber-optic submarine highways. The island is connected not only with North America, but also with Great Britain, Greenland, the Faroe Islands and Denmark. Next year, the state will connect with Ireland. Iceland also has a well-developed internal Internet infrastructure. Its length is 1800 km – it seems a little, but if you take into account the scale of the state, then this is a very good indicator.
As for energy sources, there is not only the heat of the planet’s interior, but also hydroelectric power plants, as well as wind turbines. Iceland offers long-term contracts of up to 12 years for the supply of energy at fixed prices.
The temperature, which we recall in the article for the third time, is really ideal for the construction of data centers, making it possible to reduce the PUE to 1.05. In conventional data centers, a huge amount of energy consumed by a facility is spent on cooling. If we remove the voracious cooling system, we get a really low PUE.
Land in the country is not particularly expensive, plus most of the proposed construction sites have excellent energy infrastructure, Internet connections and access to water if needed.
In some cases, there are concerns about seismic instability in the region, but the state promises to allocate only sites with maximum stability for the construction of DCs. And there have not been any cases of destruction of the telecom infrastructure, which, however, is quite young, so far.
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Are there already those who have agreed to build something there?
Yes, and a lot. So, in 2015 the company Verne Global first start deploy the construction of data centers here. In 2014, the first data center was built, and then the construction of several more began. The owner of Verne Global, Digital 9 Infrastructure (D9), is going to expand the existing data centers in the country, plus plans to build a new one for $ 50 million.
Several lesser-known companies have built data centers there. Large corporations such as IBM, which have their own representation here, are under discussion on the possibility of creating multiple objects.
Not Iceland alone
The benefits offered by the Icelandic government to the IT business also exist in other regions. For example, in Sweden a few years ago there was even a special Node Pole region, which became one of the global data centers. Mainly due to the cold climate and low electricity prices. There are more data centers operating there than in Iceland. For example, there are two Facebook data centers at once, a Canaan data center from China and several other facilities.
Competing with Iceland and Norway,
own data center concept back in 2018. And this is not just a concept – since 2019, the country’s authorities have invested about 255 million euros in the data center, plus the state has abolished property tax for production equipment and installations in enterprises and other industries. “Strong growth is expected for a data-driven economy, and here Norway can do its part by offering sustainable solutions in Norwegian data centers for social services, the aquaculture industry and more,” Helleland said in an introduction to the paper. “We must work to get more data centers in Norway. “
Gradually develops a strategy for promoting the telecom industry in the Arctic and Russia. For example, Petrozavodsk State University, together with GS Nanotech from the Kaliningrad region, is going to build a whole data center network in Karelia by 2025 with a central node and its own production of storage facilities. There was information about Megafon’s intention to create several data centers and infrastructure for them in the Arctic. Such a well-known company as Norilsk Nickel has built two data centers at once in the Polar Division. Rosatom is also going to “go to the Arctic”, which has developed a project to create a data center in the Murmansk region.