Landsvirkjun

Iceland positioned to become international datacenter hub

29. May 2013

Landsvirkjun, Iceland’s national power company, announced today a new independent study conducted by BroadGroup Consulting, which reveals that Iceland is well positioned to become an international datacenter hub. The study results show unique advantageous clean energy reserves, low power prices and solid infrastructure that make Iceland a highly attractive location for datacentres.

Bjorgvin Sigurdsson, Executive Vice President for Marketing and Business Development at Landsvirkjun says, “Iceland’s power proposition is to provide economic advantages with the most competitive energy prices in Europe through fixed-rate, long term contracts. Our ample renewable and secure power resources offer differentiating opportunities for global sustainable business development.”

On the key issue of power, encompassing everything from costs to quality to regulation, Iceland scores higher than leading global datacenter locations such as the US, UK, Sweden, Singapore and Hong Kong.

Iceland power costs can be halve those in Scandinavia, and significantly more competitive than other European countries. Its power costs remain very likely to stay significantly 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 -- aluminium smelters. Such users, including global leaders such as Rio Tinto and Alcoa, can have requirements of >400MW and have expanded its sites in Iceland due to the strong reliability and availability.

Furthermore, power in Iceland is 100% renewable. 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 minimal carbon trade-offs. This makes it an ideal location for addressing corporate responsibility considerations.

“With datacenter 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 datacenter 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.

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