Landsvirkjun to supply electricity to Verne Holding’s data centre
26. February 2008
Verne Holding ehf., a company owned by Novator hf. and General Catalyst Partners, also signed further agreements relating to their facilities at Keflavík Airport and data transmissions over fibre-optic cables linked to data centre operations.
The contract with LV stipulates that the data centre will receive 25 MW (210 GWh annually), with energy use increasing in phases from 2009 to 2012. There is an option for a further 25 MW, and a significant proportion of the supply will be obligatory. The contract is for a period of 20 years from 2009, with an optional 10-year extension. The contract between Verne Holding and Landsvirkjun is dependent on all necessary licences being obtained, including authorisation to build hydropower plants in the lower stretch of the river Thjórsá.
As the agreement was being finalised, it was clear that the energy requirements of the world’s data centres are increasing rapidly, and green, renewable energy sources such as hydropower and geothermal heat are becoming increasingly attractive.
The Ministers of Finance, Industry and Communications were all present as the contract was signed, and Minister of Industry Össur Skarphédinsson stated that this was a significant moment that saw the launch of an environmentally friendly industry that would create jobs in advanced technologies. He said contracts like this embraced a future that he, as Minister of Industry, and the rest of the government were prepared to fight for.
At today’s signing, Fridrik Sophusson congratulated Verne Holding on behalf of the contractors, saying,
As you will all remember, the Landsvirkjun Board decided last autumn not to sell energy to a new aluminium smelter in Southwest Iceland, choosing instead to broaden its client base and thus spread the risk, while at the same time encouraging new directions in the economy.
At around the same time, Landsvirkjun, Orkuveita Reykjavíkur and Hitaveita Sudurnesja decided to acquire a majority holding in Farice in order to lay a new fibre-optic cable to Iceland. Farice will thus ensure reliable data transmissions – a prerequisite for the operation of international data centres in this country. These decisions were a vital step in reaching the conclusions that we see today.
Landsvirkjun is now carrying out preparatory work on the hydropower plants in the lower stretch of the river Thjórsá that will use self-sustaining energy sources to supply this project and others on the horizon awaiting environmental assessments. Contruction work should begin next year. Green, carbon-free electricity produced from Icelandic hydropower is now in demand on international markets, and Landsvirkjun already sells green certificates to companies in continental Europe.
Today’s signing marks a distinct turning point in the nation’s commercial history, when information technology and renewable energy form the basis for new employment opportunities in a region where the Keflavík Airport Development Company (Kadeco) has progessed from retrenchment and is now literally gaining ground.
Páll Magnússon, Landsvirkjun's President, and Vilhjálmur Thorsteinsson,
President of Verne Holding, after signing the energy supply contract
Ministers and others attending today’s signing