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Why the Nordics are the best place in the world to put a data centre

Oskar Almén, energy and utilities expert at PA Consulting, is quoted in an article about data centres in the Nordics, where he discusses why these countries are proving so popular with data centre providers.

Read the full article in Tech Monitor

Google this week opened a $730m data centre in Denmark, making it the latest hyperscaler heading to the country ranked the best place in the world to build a data centre in the new Data Centre Ranking 2020, created by Tech Monitor’s sister title, Investment Monitor. The ranking is dominated by the Nordic nations, emphasising the appeal of the region for the sector.

Denmark has come out on top in the index, which measured countries around the world on 29 benchmarks covering security, IT and energy infrastructure, and business environment, to find the world’s best location for data centres. With an overall score of 78.70, it narrowly came out ahead of neighbour Sweden (78.25). Another Nordic country, Finland was fifth (75.39) with the US and Netherlands third and fourth respectively.

Norway is sixth, meaning four of the top six locations are in Northern Europe.

When asked about the success of Denmark and its neighbours, Oskar says: “A lot of preparation has also taken place at region, state and city level.

“Places have been identified which could make a good spot for a data centre, the land has been zoned and the infrastructure has been updated to fit in with operator requirements. I think this level of preparedness is attractive to the major players.”

With the size of the global data centre market expected to grow to $62.3bn by 2022, almost doubling in five years (2017 size: $31.5bn), the Nordic region is likely to remain a popular location in the fast-growing sector.

Oskar adds: “We’ve seen dramatic uptake in the ‘server space’ segment, where companies like Google and Facebook are storing information in Nordic data centres.

“For these companies the most important thing is low energy prices. Latency is important too, but with their applications, a few milliseconds doesn’t make much difference.”

When it comes to energy, Oskar says the well-established ‘district heating’ systems deployed in Denmark and other Nordic countries, which use energy generated at a central location to heat nearby homes and commercial properties, are a big draw. They allow data centre providers to turn their waste heat into a desirable resource, which means bills are low.

He adds: “A lot of companies are trying to build these circular systems where you put water in to cool the equipment, and use the resulting warm water in a heating system.

“This is where the Nordics have an advantage over countries at the moment, but you could see them being developed in other places too, at least on a micro level. A data centre could be connected to an individual building complex to supply its heat.”

Oskar says that companies considering whether to invest in data centres in Northern Europe should consider what purpose their centre will serve.

He goes on to say that the Nordics are unlikely to ever fully replace on-location data centres in financial hubs like Frankfurt and London, but believes advances in high-performance computing could offer new opportunities.

Oskar continues: “For advanced applications, like banking with robotic trading, you have a latency challenge you will never solve. So markets that are close to the end-user, London, Frankfurt, Singapore and New York, will always have an advantage there.

“But what we’ve seen in the last couple of years is the growth of applications that aren’t too affected by latency, but require high computational power, such as really powerful AI chips, and the Nordic markets have an advantage here because they can supply the power needed.”

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