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Data center hosting – is Iceland the next place?

A 35-minute drive south of Iceland’s capital of Reykjavik lies the tiny fishing village of Grindavik. One January day, Kristinn Haflioason steers his car a few minutes out of town to a vast, snow-swept expanse of volcanic rock that juts out into the Atlantic Ocean. He climbs out and launches into an unlikely sales pitch that he hopes will persuade corporations from the U.S. and Europe to locate operations there. “Dozens of companies have expressed interest,” he says.

It will be interesting to see if the conversations about data center hosting in Iceland lead to more companies investing in facilities there. I’ve certainly spoke with people and looked into the data center hosting possibilities there, sounds like an exciting concept, do check out the article, it’s an interesting read.

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One Response to “Data center hosting – is Iceland the next place?”

  1. Tim Walsh says:

    An interesting and well informed article in my opinion. I have been to Iceland and spent time with the excellent Invest in Iceland Agency, researching this exact part of the world as a location for a fresh-air-cooled hosting centre. Our research had shown that whilst the climate is cold, relative to the UK for example, it is in fact the world’s most moderate climate also. In an average year the annual temperature variance, from the coldest winter night to the hottest summer day, is only 16 C. Compare this, for example, to variances in Stockholm (27 C), Olso (29 C), or Helsinki (32 C). Taking humidity into account also, the area has the kind of climate where fresh air cooling will work best in our view. Average summer highest is 14 C and winter lowest is -2 C.

    Power is cheap there, if bought directly from the grid company, Landsnet. But here’s the catch: you have to be a HUGE power consumer to qualify to buy directly from Landsnet. When I visited last year, I discovered there is a minimum contracted threshold of 14 MegaWatts continous load, 8000 hours year. That is a monstrous 112,000 MegaWattHours per year, or 112 GWh. I have no idea whether any data center anywhere draws that much power today (can anyone advise me?) but I note that despite a great campaign by Invest in Iceland, no overseas company, to my knowledge, has committed to build a data center there. I hear that the threshold has been now been halved, but it is still a colossal figure.

    This “minimum threshold” policy seems completely at odds with modern idealogical thinking on reducing power consumed by data centers. And consider the business risk: bearing in mind the commitment of the big server manufacturers to reduce power consumption (The Intel/Google-led Climate Savers Computing group predicts a 50% cut by 2010), even if you did need that much power today, will you still need it in five years time?

    Until the Government acts to revise Landsnet’s policies, the good work of Invest in Iceland in seeking to attract data centers to the island may come to little. Shame, because Iceland really is ticking most of the other boxes. For example, there is currently only one broadband fibre link to the rest of the world (!), but by the end of this year there will be four or five.

    There will be issues of latency for some end users, convenience for others, but overall, I think Landsnet is Iceland’s Achilles heel today.

    Tim Walsh
    Kell Systems Group

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