Investments in Nordic data centres predicted to double by 2025

A report commissioned by the Nordic Council of Ministers projects envisaged a sharp growth for the Nordic data centre market by 2025 – with expected annual construction investments in the order of $2-4.5bn.

The study, that was carried out by COWI Group, compared the attractiveness of the Nordic region to the so-called FLAP-D region (Frankfurt, London, Amsterdam, Paris and Dublin), against the background of accelerating data volumes worldwide and the challenge of tackling sustainable growth of cloud, streaming and computing services.

Philip Low, independent analyst and Chairman of Broadgroup commented on a new report published by the Nordic Council of Ministers on the day of Datacloud Nordic 2018, held in Copenhagen, Denmark.

“The Nordics have the potential to evolve as a truly global data hub, connecting Europe to North America and Asia.

“Data Centre Opportunities in the Nordics – An Analysis of the Competitive Advantages”.

According to the report’s findings, the Nordics are likely to gain market share thanks to five key advantages: abundant renewable energy, reliable power supply, low energy prices, political stability and faster time-to-market primarily due to ease of doing business.

”It is clear that the global demand for data storage is growing rapidly.  At the same time the traditional data centre locations in Europe are starting to feel the strain on infrastructure, availability of land, and on the security and availability of renewable power,” said Steen Hommel, Director Invest in Denmark to Data Economy.

“The report shows how the Nordic region is especially strong in these areas, rapid improvement of the fibre connectivity and overall ease of doing business further strengthen the data centre value propositions in the Nordics.

“Sustainability is becoming a highly relevant metric for the data centre industry, and it is essential that the growth in the data centre space is accompanied by energy efficiency innovation and new models where investors are engaged  in expanding the supply of renewable energy.

“We welcome the report and look forward to the work ahead of us.”

In Denmark, hyperscale DCs under development accumulates to approximately 900ha; a rough equivalent to 1,800 full size football pitches.

More than 70% of Danish power is based on renewable sources – with Denmark having the highest proportion of wind power in the world.

The Nordic data centre construction market is estimated to attract annual investments of $2-4.5bn by 2025.

This corresponds to an installed annual capacity of 280-580 MW per year.

The Nordic region is well connected to the UK, continental Europe, and the US, and major fibre optic installations linking the Nordics to North America and Asia are in the planning stages.

“Cloud and hyperscale companies such as Facebook, Google, Amazon Web Services and Apple have made major investments in Nordic data centres recently,” said Jakob Dybdal Christesen, Chief Market Manager at COWI.

“The Nordics meet all key criteria for site selection, ranging from reliable, renewable energy to world class fibre optic infrastructure, thus this presents a powerful proposition for corporate investment in existing and new facilities.”