It’s cold, it’s renewable, and it’s cheap. But is it ready?
Article published 26th March 2024 by Datacenter Dynamics
Iceland has long pitched itself as a perfect place for data centers, thanks to its cheap, clean power, and cold temperatures.
But, for years, the majority of the companies that answered the call were cryptominers, riling locals and doing little to shift workloads from the rest of the world.
On a visit to Iceland, DCD found the country is ready to make its case again, thanks to a new submarine cable, increasing pressure for sustainability, and — most of all — the surge in artificial intelligence demand.
Bringing data centers to Iceland
“Data centers are here to stay,” Iceland’s president Guðni Th. Jóhannesson told DCD.
“When I was studying in England in the late ’80s, there was no Internet. My mom sent me newspapers that arrived 14 days later, and I read everything — the obituaries, the advertisements, everything. This was my connection to Iceland. I’d make a phone call, twice a month, just to find out if everybody was still alive.”
Things have changed dramatically since. “Wherever you go, you are connected,” Jóhannesson said. “The world has shrunk.”
This has meant that the people of Iceland are no longer disconnected from the wider world, but the digital age also comes with a decidedly physical footprint.
“Last night, I attended a sporting event. I took loads of videos, listened to Spotify on the way back, downloaded necessary stuff, unnecessary stuff,” Jóhannesson said. “But I didn’t pay any attention to the energy, because it’s just the cloud — I don’t see smoke billowing up out of my laptop or phone.”
As the data center sector expands rapidly, fueled partly by AI demand which now consumes power comparable to entire cities: “This might be a cause for concern,” he argued. “It should make us aware that if we want to be sustainable, we have to be conscious of the energy we use and how we use that energy.”
Iceland’s president wants more connectivity, but he told us it shouldn’t come at a cost. He said it should use Iceland’s 100 percent renewable grid.
Crypto Craze
The peak of the crypto craze soon passed, and those that survived now believe their businesses are more mature, their facilities more secure, and that they are ready for enterprises.
“Crypto has reduced substantially in Iceland,” atNorth CEO Magnús Kristinsson told DCD. “I would be very surprised if it vanishes entirely, but we are now seeing AI contracts that are the same size as we could sign crypto contracts for seven, eight years ago.”
The company acquired the data centers of Advania, one of which was hit by the Bitcoin bandits five years ago. Visiting atNorth’s newer ICE03 facility, DCD noted its high fences, man traps, and copious CCTV cameras.
“We are not engaging with crypto customers,” Johann Thor Jonsson, atNorth’s director of site selection, said as he showed us the site. We want to be the net zero partner of choice and become the largest data center operator in the Nordics,” he said. Acquired by Swiss investment manager Partners Group in 2021, atNorth itself recently bought Swedish HPC-as-a-service business Gompute in an effort to push deeper into the HPC and AI market.
The ICE03 site has 6,750 square meters (72,650 sq ft) of data center space, 12MW of power, and a PUE of 1.2. It joins the 3.2MW Reykjavik-based ICE01 and the 83MW ICE02 to the north of the capital.
That latter facility is “a huge campus,” Jonsson said, “and we’re going to double that in the next few years — so stay tuned.”
At ICE03 in the northern Icelandic town of Akureyri, “we will triple our size easily and more — there’s some new power capacity coming on stream. We will need a new transformer, but it’s all in the works.”
All of atNorth’s sites are slightly different across Iceland, Norway, Sweden, Finland, and Denmark. This reflects past acquisitions, different market approaches, and a wish to test out various approaches, but it can’t last.
“From now on, we cannot allow ourselves to do that,” Jonsson said. “We will be standardizing on gensets, cooling, racks, floor space, etc.”
The company needs standardization to target larger clients and expand more rapidly. At the same time, it wants to shift from direct air cooling to also include liquid cooling.
If ICE03 at Akureyri is the standard, it would be a sustainable one. It has a building frame made out of glulam, wood laminations bonded together with durable, moisture-resistant adhesives. “Why timber and not steel? It’s more sustainable; it’s environmentally friendly. It is much more fire resistant — glulam will stand long after a steel building has collapsed,” he added.
Inside, the company does use steel panels for the walls, sandwiching Icelandic rock wool made from basalt melted with other minerals then spun and tempered with binders. “Rock wool is environmentally friendly, highly fire resistant, highly noise insulating,” Jonsson said. “All of these things that we’re doing here are taken with the environment in mind.”
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