Is Norway on the verge of becoming a green data center nation?

Background

The demand for data storage is quickly increasing, and Norway scores high when measuring locations for new data centers to process this data as Norway offers fairly priced, renewable energy, cool climate, high levels of education, political stability and predictable investing environments. The data center industry`s increased demand for energy has also brought increased demand for renewable energy. Norway has excess renewable energy, making it an attractive location for green data centers in particular. Furthermore, through improvements towards electricity tax in the government budget the framework has been severely improved.

The representatives point out all the exciting aspects about the green data center industry and how this could spark significant investments to Norway as well as create a great deal of new jobs. At the same time the representatives point out how despite Norway`s ideal conditions, as opposed to neighboring countries, no data center actors have chosen to establish their center in Norway. In Denmark, establishments happen thanks to Norway`s excess hydro-energy, through power cables from Norway. Potentially due to two conditions: level of electricity tax and efficient, direct fiber connections to Europe.

As of 2016 Norway will implement reduced electricity tax on electricity to Norwegian data centers exceeding 5MV. However, the representatives bringing the proposal claim this by itself is not enough. Norway needs better, stronger international fiber infrastructure towards Europe is another necessary factor to bring large scale data centers to Norway. Basically there is a need for more “digital highways” to and from Norway. Finland find themselves in a similar situation and have already approved the establishment of a direct fiber connection towards Germany. A cable measuring about twice the length of a hypothetical fiber cable from Norway to Germany.

The representatives are certain, if Norway can actually facilitate larger data centers the demand for fiber capacity will significantly increase, though it is important to point out this market potential is hard to estimate without an actual fiber connection.

Experience from Statnett`s fiber cable, established with “Skagerak 4” shows how end-consumers create a demand with time. Large parts of this cable has now been rented commercially, aside from what Statnett use for themselves.

 

Fiber Connection Proposal

Bottom line is, if Norway is to compete with the neighboring countries, a better fiber connection outwards to Europe is of the essence. The government, both from a professional and a political side, needs to show and display how Norway is on the offence, inviting new attitudes to establish new data centers in Norway.

The representatives suggest the parliament asks the government to consider how to facilitate a quick establishment of more international fiber cables, among others from Norway to Great Britain and Germany, potentially even more stretches. Furthermore, they suggest the parliament asks the government to develop a strategy, laying out how the authorities can facilitate the establishment of green data centers, where fiber capacity and facilitation from Norway`s side towards actors willing to invest in Norway, is a central aspect.

Click here to read a more thorough summary of the proposal (in Norwegian).