Iceland promotes its data centers as the most sustainable option to meet our increasing AI data demands — but is it true? TechHQ visits the Nordic island to find out.
Article published 29 November 2023
Part 1: Demanding conditions
“Data centers are here to stay,” Iceland’s president Guðni Thorlacius Jóhannesson said when introducing the annual Datacenter Forum in Reykjavik last month.
“Last night, I attended a sporting event, and I took loads of videos. On the way back, I listened to music, Spotify, and did a tiny bit of work after that. Downloaded stuff, necessary stuff, unnecessary stuff, and didn’t pay any attention to the energy all this takes, because it’s just somewhere in a cloud. I don’t see black smoke billowing… I just don’t see the energy that is used.
“This might be a cause for concern, or at least it should make us aware that if we want to be sustainable, we have to be conscious of the energy we use. It is our duty to make sure that we are conscious and to seek the best ways to go forward.”
Iceland certainly sees itself as one of the most viable options for handling our ever-growing data demands, and with good reason. The country has a mild climate all year round, with temperatures ranging from just above freezing in the winter to around 54°F (12°C) in the summer, and the range is even smaller on the south of the island.
This essentially provides data centers, that produce a lot of heat but must be kept at around 68 to 77°F (20 to 25°C), with a free, natural cooling system that doesn’t require any energy. Iceland’s data center industry boasts an impressive power usage effectiveness (PUE) range of 1.05 to 1.2, thanks to the lack of air conditioning systems and instances of hardware overheating.
But if energy is needed, Iceland has that covered, too, at least from an environmental perspective. The country runs almost entirely on renewable energy, with 100 percent of its electricity generated from hydroelectric (73 percent) and geothermal (27 percent) power sources. Only about 15 percent of the country’s energy usage comes from fossil fuels, said President Jóhannesson, and where they are used, the primary culprit is the mobility sector – the country is, after all, an extremely popular tourist destination and stopover for flights to other countries. But the non-electricity components of aluminium smelting, the country’s largest industry, are also partially to blame.
The strong sales pitch of Icelandic data centers
Hydroelectric and geothermal sources have low variable costs when operational and are not subject to fuel price fluctuations, so energy companies can offer long-term price stability. That all adds up to a strong sales pitch for businesses looking for a sustainable and cost-effective location for their data.
Even those that are more security conscious than financially or environmentally motivated may be tempted by the island. Iceland is often named one of the world’s safest countries and benefits from a political landscape that’s historically stable. Data centers are also ideal power customers for Iceland, as they consume electricity at a fairly constant rate, so power companies are willing to agree to ten-year power purchase agreements (PPAs) at favourable prices.
The big three Icelandic data center providers
Iceland has three main data center providers, atNorth, Borealis, and Verne Global, which boast a total of about 200 MW in capacity. These, along with a handful of other smaller facilities, offer typical colocation services, where businesses can rent the infrastructure they need to house their servers, data storage, and networking equipment. Beyond this, the companies can host GPU, CPU, and IPU-intensive applications, catering to the ever-increasing range of industries that require high-performance computing.
Read the complete article online here, published by TechHQ.