During 2018, NTC Services AS had an assignment to find optimal locations for new data centers in Norway for an international player. Norway has been seen as interesting, in competition with Sweden and Finland after Norway followed the neighboring countries in facilitating data center operations by e.g. to adjust the electricity tax to a competitive level.
We found these locations, where the municipalities arranged everything for us in an excellent way, where also the local high-voltage suppliers, as well as Statkraft and Statnett did their part to convince our customer of all the advantages Norway has to offer. Naturally enough, when we are talking about billions in investments per address. The investments at 1 of the addresses alone would give the state and municipality significantly greater income than what the government negotiations got out of their strokes, which resulted in NOK 10 million in increased fees.
Why do we claim this? A concrete example, where our budget for the facility per address was approximately NOK 1 billion. A large proportion of this will be local investments in infrastructure and work on preparing the area for data center operations. That means planning and preparing the area, buildings, supply routes, cabling, pipes, fences – everything needed to establish a new industry. This will take place over time, with a large number of local contractors carrying out the work. As soon as you are ready for operation, in our case you would need 15 full-time employees initially and then increase as you fill up the facility. This implies long-term investments, tax revenues, employer’s contribution and settlement in municipalities that are most in need of new industrial development. Some concrete details:
- Central Norway, short journey time from the airport, with 100MVA power available and operation possible from 2019
- From 2020, 200MVA with redundancy, can be scaled somewhat both up and down depending on customer needs.
- Large high-voltage installation in 132KV / 22KV design, carried out by a local high-voltage supplier with associated workplaces in connection with expansion and then in connection with future service and maintenance of the facility.
- Short-distance electricity that provides significant benefits for all parties involved, Statnett, Statkraft, local high-voltage supplier and customer.
- With an average temperature below 4 degrees C, the addresses in the North are suitable for free cooling, with a low proportion of days with a need for water mist, i.e. one of the “greenest” facilities in the world.
- Our design consisted of 1 admin building and 20 modular buildings of 12mx90m – each with 4 central rack rows of 36 meters with a total load in the building of up to 10MW, which could be scaled differently depending on the final actual use per building. The idea was to have a central hot aisle, between the rack rows, provided with free cooling from “cooling walls”, i.e. air cooling with the option of recovering the heat generated in the facility
- Although there may be challenges regarding the fiber network in Norway, the addresses we found were well suited both in terms of local fiber but also with existing opportunities across the border to Sweden where the opportunities are currently better.
It is frightening to hear that some believe that such investments will not leave huge amounts locally. The avalanche of closures that will come as a result of the proposed change in the electricity tax and the uncertainty this entails puts hundreds of employees at risk of losing their jobs and this cost to society will probably be significantly greater than the thought 10 million in tax increase that be included in the state budget. The tax increase on an industry that disappears by 1 January 2019 will be zero, the extent of the damage will not only affect those for whom the tax was intended, but the data center industry in Norway in general. It will come in lost jobs, lost competitiveness with neighboring countries, export of electricity that we could use locally and many other areas which in total amount to billions in losses in the years to come.
