Iceland's Growing Data Centre Industry: Fuelled by Geothermal Energy.

While the machines may not actually have taken over in the nightmarish way that the visions of the future portrayed in the Terminator or Matrix films would suggest, there is no escaping the fact that computers do run the world. With everybody from the NHS to your next door neighbour holding information remotely, all those terabytes of data need an awful lot of storage to accommodate them – and keeping all of those data centres running properly adds up to a massive demand for power.

According to a recent Greenpeace study, data centre power consumption is predicted to top 2 million megawatt hours by 2020, while the McKinsey consultancy suggests that they will exceed airlines in terms of CO2 emissions by the same year. In today’s environmentally conscious world, the race is on to find better ways for data centre operators to lower their impact and embrace the quest for carbon neutrality.

Iceland’s Dream

Adding solar panels has been the route chosen by some, while others – notably the Microsoft data centre in Washington and Yahoo’s New York facility – have tapped into the potential of hydro-electric power, but since not every centre is by a river, these options aren’t available to everyone. By contrast, Iceland, where 100 per cent of the electricity is generated from entirely renewable sources, offers a solution that’s open to any data centre choosing to locate on the sub-arctic island and unsurprisingly, a number of companies around the world are showing an interest. As a result, the country’s dream of being the self-styled ‘data centre capital of the world’ is slowly beginning to become a reality, and this growing new industry is being fuelled by geothermal energy.

A Real No-Brainer

Cerys Watkins, a British-based green energy consultant, has been watching these developments for some time. “Ever since the Icelandic economy took a hammering in 2008,” she explains, “ there’s been a conscious effort to capitalise on the country’s natural resources and when you make all your power from either geothermal or hydro-electric sources, you’re in a pretty good place to sell the green dream. From the point of view of the big data centre clients, it’s a real no-brainer; I mean, instant eco-cred or what?”

The Lure of Geothermal

She points to the likes of the Norwegian software company, Opera, which recently opened its new ‘Thor’ data centre in Iceland. The decision was, apparently, driven by the lure of reliable and carbon-neutral geothermal energy and the climate’s natural cooling ability, which forms a significant additional benefit, since mechanically cooling data centres is a major contributor to their overall power requirement. The move will allow all the web traffic from the highly popular Opera Mini mobile browser to be managed and compressed. With more than 70 million users viewing nearly 5 petabytes of data – the equivalent of almost 37 billion pages a month – that is a colossal undertaking, and the choice of their Nordic neighbours to locate it in Iceland is an obvious major boost to the nation’s emerging data industry.

Opera is not the only big name that has been heard in relation to the possibility of Icelandic migration. The Wellcome Trust, for instance, holds an equity stake in the funding of a new data centre at Keflavik’s former NATO Command Centre, while rumours link IBM to a disused naval site outside of Reykjavik.

A Natural Advantage

Iceland’s unique geological position and the prevalence of volcanoes and hot springs that entails, inevitably gives the country a clear natural advantage when it comes to geothermal power. The nation’s five major geothermal power plants are responsible for generating around a quarter of the electricity – hydro power accounting for the rest – and meets almost 90 percent of its heating and hot water needs.

John Woodley, the co-head of European and Asian power at the investment bank, Morgan Stanley, has made the point that, since data centres have to be built somewhere, it makes obvious sense to build them as near to renewable energy sources as you possibly can. Looked at like that, Iceland is probably about as near a perfect place for a green data centre as you’re ever likely to get; the country’s dream might just be about to come true.