27. November 2007

Iceland to move from heavy industry to data centres

A change in policy by Icelandic national power means that data centres and solar silicon production will be prioritised over aluminium smelting.


Reykjavik (eNewsPR) 27 November 2007 - The Icelandic national energy company, Landsvirkjun, decided this month to move future energy supplies away from the aluminium industry to more varied and eco-friendly sectors such as data centres.

Pall Magnusson, chairman of the board of Landsvirkjun, said, "This is a business decision....we have wanted to increase our client base and diversify against risk, not to be dependant on one industry."

The announcement marks an important shift in Icelandic energy policy, which in the past has largely concentrated on providing inexpensive power to new aluminium smelters. Furthermore, Landsvirkjun stated in a press release that for the moment it will not negotiate with aluminium companies planning to build in the south or west part of Iceland.

Verne Holdings, a joint venture of General Catalyst and Novator, has already announced it will be taking advantage of cheap, renewable Icelandic energy by building a data centre on the old NATO base close to Keflavik International Airport.

The new data centre will host data from a number of different sectors including financial, retail, oil and film, and will be one of the 20 largest data centres in the world. Verne Holdings will initially use 5MW of power but has said it will need to increase to 50MW or more in future expansion stages.

The data centre will rely on the new Danice submarine fibre optic cable as its primary connection to Europe with backup services through Farice 1. The company predicts, however, that in 4 to 5 years time the cables will be running at full capacity and a further cable will need to be laid.

Iceland has been recognised as a prime location for data centres due to the abundance of cheap geothermal and hydroelectric energy which provides more than 99% of the country's electricity. 

For more information on data centres in Iceland visit www.invest.is