On the key issue of power, encompassing everything from costs to quality to regulation, Iceland scores more highly than leading global datacentre locations such as the US, UK, Sweden, Singapore and Hong Kong.
Iceland power costs can be half those in Scandinavia, and significantly more competitive than other European countries. Iceland’s power costs remain very likely to stay much lower than other countries, particularly given the opportunity to cap such prices for ten years or even longer for greenfield projects.
Power reliability and quality are extremely high. Iceland has a long history with a key group of power-intensive users already – the aluminium smelters. Such users, including global leaders such as Rio Tinto and Alcoa, can have requirements of >400MW and have expanded their sites in Iceland due to the strong reliability and availability.
Furthermore, power in Iceland is 100% green. Iceland is one of few countries in Western Europe with large quantities of competitively priced, renewable carbon neutral electricity. Setting Iceland apart from most countries, it produces electricity using exclusively hydropower, geothermal energy and onshore wind. These are sustainable, environmentally “green” resources with zero carbon trade-offs. This makes it an ideal location for addressing corporate responsibility considerations.
“With datacentre costs closely linked to power prices, and power accounting for typically 20-40% of operating costs, it is not surprising that the availability of power ranks highly in the choice of location with an investment decision based on a period of at least 15 years,” commented Steve Wallage, managing director of BroadGroup Consulting.
“Some locations talk about factors such as cheap energy or strong connectivity, but the reality for most datacentre users is that they need all basic issues to be in place. This includes telecoms, power, reliability, taxation and business environment, and the legal and regulatory framework. Iceland has all these factors in place.”