Iceland as a Prime Data Center Location

Thursday, 10 June 2010 13:22

Written by Jeff Clark

Data centers are well known as power hogs, with their extensive information technology equipment (having its own power needs) coupled with equally extensive cooling equipment (which further increases power usage). As energy costs rise and as the political climate increasingly frowns on fossil-fuel-based energy, companies are responding by searching for ways to reduce costs, reduce their environmental impact, and rely more on “green” energy sources. In response to the needs of such companies, one country is beckoning: Iceland. The land of fire and ice offers a number of key advantages that companies can exploit to improve their image, become more environmentally friendly, and reduce operating costs for their data centers.

Iceland, as its name implies, has a relatively cold climate; according to Tech News Daily (“Iceland Promoted as Future Data Haven”), the average daily high temperature in Reykjavík, Iceland’s capital, is 56 degrees Fahrenheit, with 79 degrees being the highest recorded temperature ever. Companies have increasingly discovered that simply “opening the windows” of their data centers (with the likely addition of some fans or other air circulation infrastructure) can actually suffice for a significant portion of their cooling needs; thus, the usefulness of Iceland’s cool climate becomes clear: outside air can be substituted for machine-cooled air, thereby cutting a large portion of operational expense.

Iceland’s icy climate allows companies to cut expenses by relying on outside air rather than conditioned air. On the other hand, Iceland’s abundant geothermal energy offers companies another potential resource: environmentally friendly (“green” or “clean”) energy. According to Forbes.com (“Warming Up To Iceland”), Iceland’s power is supplied exclusively from geothermal and hydroelectric energy. The article cites Tate Cantrell, chief technology office of the Iceland-based data center development company Verne Global, as stating that “[a]ll of the power on the Iceland grid is...100% green.” Thus, not only can companies cut power usage (one environmentally friendly step) by locating their data centers in Iceland, they can rely on zero-emissions energy sources (another environmentally friendly step) for what power they do need.

In addition, energy prices in Iceland are significantly lower than those in, for instance, the United States. According to Tech News Daily, “electricity [in Iceland] costs about four cents per kilowatt hour...The U.S. average [as of early 2010] is about 10 cents per kilowatt hour.” The article further states that customers can obtain fixed energy price contracts with a 20-year term, guaranteeing price stability in that time period. Thus, Iceland offers companies a number of advantages with regard to energy, both in terms of cost and environmental impact. Furthermore, because Iceland has suffered difficult economic times owing in part to a banking crisis (and, of course, the kind of debt problems that are plaguing western nations, including the United States), the country is seeking ways to improve its economic well-being. The data center market has significant potential to this end.

Before companies begin making plans to build data centers in Iceland, however, they must also take stock of the potential disadvantages. The kind of geologic forces that provide Iceland with its abundant geothermal energy also produce some less desirable effects, such as earthquakes and volcanoes. Recently, air travel in Europe suffered a shutdown as a result of ash emanating from the eruption of an Icelandic volcano. Data centers relying on outside air for cooling could be faced with potential problems if ash falls on their location—if nothing else, their air filtration systems could be overwhelmed. Furthermore, as Forbes.com reports, Verne Global’s Cantrell cites the “20 to 40 earthquakes in the 1 to 2 Richter scale each day.” Although such earthquakes are not large enough to be devastating, they could still affect equipment and (over time) building structures.

Furthermore, as Tech News Daily notes, the available talent for filling information technology positions in Iceland may be quite limited. Since moving an entire IT crew to Iceland may be difficult, if not impossible, such a lack of manpower could put a damper on companies’ plans.

Although Iceland offers a number of potential benefits to companies looking to find a more efficient and environmentally friendly location for their data centers, it also carries with it certain characteristics that are not so advantageous. Thus, companies must carefully weigh the benefits and drawbacks of locating a data center in Iceland. Nevertheless, certain companies are taking the leap; Opera (developer of web browser software), for instance, recently opened a data center in Iceland, according to Reuters (“Norway's Opera moves data processing to Iceland”).

TrackBack URI for this entry

Comments (0)

Subscribe to this comment's feed