Verne Global data centre under the northern lights

Is Iceland the coolest location for data centres?

Image credit: Verne Global

Iceland has pitched itself as providing the most sustainable and cost-efficient data centres in the world. E&T took a tour of some of the most notable to find out if this is the case.

Life on the North Atlantic island is chilly, foggy, and windy all year round. And while they may have to wrap up warm, and are unlikely to get a tan, Icelanders have acknowledged that their natural cold climate is ideal for one particular industry: data.

Iceland’s data-centre industry is booming, and there are many reasons why this may be seen as a favourable location.

Not only does the country’s cool climate help drive energy costs down, but Iceland’s sustainable mix of geothermal and hydroelectric power generation could help businesses to minimise their carbon footprint, says Data Centers by Iceland, a public-private partnership established between the Association of Icelandic Data Centers (DCI) and other stakeholders to promote and improve the competitiveness of data-centre development in the country.

Greentech promoter Green by Iceland notes that 70 per cent of the country's electricity is produced with hydropower and the remaining 30 per cent with geothermal energy, and points out that bot production methods are baseload and produce electricity 24/7 no matter the weather.

The Nordic island also produces reliable and cost-competitive electricity, adds Data Centers by Iceland, and offers rates for long-term industry contracts to ensure cost predictability, a stable supply, and 10-year cost visibility.

According to estimates provided by solutions provider Verne Global, as of October 2022, typical data centre power costs in London are $3.11m infrastructure costs plus $4.53m power costs for a total of $7.64m per year, while the equivalent in Iceland would be $1.74m in infrastructure costs, $0.39m in power costs with a total of $2.13m annually.

This means that it’s approximately 72 per cent cheaper to run data centre operations in Iceland than in London, according to these estimates, and when only looking at power costs the savings are around 90 per cent.

When expanding that to look at carbon emissions, the mix of hydroelectric and geothermal electricity generation means that Iceland only produces two per cent of the carbon that similar power usage requires in the UK. Such figures are corroborated by atNorth, which also states that natural cooling allows Icelandic data centres to use between 24 and 31 per cent less energy than American and British equivalent sites.

Data Centers by Iceland also argues that the country’s state-owned transmission system operator (TSO), Landsnet, which distributes power throughout the entire country, is highly reliable and can withstand the needs of power-intensive industries such as data.

The Icelandic organisation has already gained over half a dozen data partners, and hopes to create a well-established data centres ecosystem across the Nordic island. Partners include the likes of data centre companies, IT solutions companies and Iceland’s national power company, Landsvirkjun.

In October, E&T took a tour of three data centres on the island and heard from the companies about what their solutions can bring to the table.

Inside atNorth data centre in Iceland

Image credit: atNorth

First, we visited the team at HPC (high-performance computing) and AI (artificial intelligence) service provider atNorth at its headquarters outside Reykjavik city. Established in 2009, the company offers sustainable, cost-effective, and scalable high-performance computing across Iceland and Sweden.

According to its chief commercial officer Gisli Kr, a diverse group of customers have trusted its services to host and upgrade its most valuable data processing hardware. “Our customers have identified the Nordics as the most cost-efficient place to host and process data while minimising their environmental impact,” he adds.

The company currently operates three data centres in strategic locations across the Nordics, while a fourth location is under construction in the north of Iceland. “We have ultra-secure, state-of-the-art data centre facilities in Iceland and Stockholm, Sweden, that are all powered by 100 per cent renewable energy,” Kr explains.

Its sites also benefit from year-round ambient cooling. This allows the company to run its data centres with a power usage efficiency (PUE) range of 1.2 or lower, resulting in hardware not overheating and lower costs. “Whether you need to access to opex-based high-performance infrastructure or tailored clusters of HPC flow, our services allow you to run various intense workloads such as financial calculations, computational fluid dynamics, and computer-aided engineering simulations for digital product development and analysis.

The company’s overall mission is to help its customers “push the boundaries of computing solutions while attaining increased efficiency and performance with a lower environmental impact”.

Verne Global data centre in Iceland under northern lights

Image credit: Verne Global

Near Iceland’s international airport location of Keflavik lies a 40-acre data centre campus run by Verne Global. Like atNorth, the team Verne Global has designed its campus to provide highly specialised services to organisations running high-intensity computing workloads.

Also, much like other data centre companies on the island, Verne Global leverages Iceland’s clean power grid and predictable year-round cool climate, enabling organisations to cut costs, carbon emissions and energy usage, while simultaneously maximising the performance of its applications.

The company believes that connectivity is key to helping data centres across the country thrive. “Iceland is a nexus of interconnectivity in the mid-Atlantic, and that has truly changed the game,” says Verne’s chief technology officer Tate Cantrell. “We want to deliver super high-quality data centre products that allow our customers to operate whatever applications they please, and we want these to be well connected to other countries and connected to renewable energy.”

In September 2022, the firm announced a partnership with London-based telecoms service provider Volta Data Centres. The collaboration aims to deliver a data-centre platform that spans Iceland and the UK to meet both the connectivity and sustainability requirements of enterprise customers.

It is hoped the Northern European platform provides organisations with the flexibility to locate their workloads and applications between two fully optimised locations. “With two complementary, best-in-class data centres, we can now offer enterprises more choice over where to locate their applications,” says CEO Dominic Ward.

Both the UK and Iceland locations complement each other in this deal. The company’s campus is powered by 100 per cent renewable energy, like other data centres across the Nordic island, and is engineered for high-intensity workloads, while its hyper-connected central London data centre is the optimal location for latency and connectivity-sensitive applications.

Verne Global said that in 2023, the campus will comprise 40MW of constructed capacity, out of a possible 100MW on this initial site.

On our final stop of touring data centres in Iceland, E&T stepped into Borealis Data Center’s newly acquired data centre in Reykjavik (RDC). Borealis claims RDC will be one of the most technologically advanced centres in Iceland and will cover up to 7,000m2 when fully developed.

With this addition, Borealis now operates three data centres in Iceland – one being in the northern part of the country in Blönduós, one at Fitjar in Reykjanesbær, and now one in the capital city. It added that it is increasing its capacity to over 60MW for its clients while offering a wider range of data centre solutions.

Reykjavík DC fulfils the stringent security and redundancy requirements that come with hosting core banking and clearing systems, according to Borealis. “RDC is a secure data centre designed according to the highest standards to accommodate systems with high uptime requirements,” adds CEO Björn Brynjúlfsson. “This well-equipped data centre is certainly a valuable addition to Borealis portfolio.”

The Reykjavik site was built specifically to the standards required for financial institutions and mission-critical operations: technically it is built for a very high uptime with everything in a dual set-up to meet the very rigid requirements of such sectors.

Similarly to atNorth and Verne Global, Borealis builds and operates efficient, low-PUE, data centres using renewable and green energy.

The Icelandic government and the industry alike believe that the increasing development of data centres across the island is the best-prospect sector for the country. It also hopes that its remarkable data centre potentials of location and climate will be at the forefront of businesses’ minds when considering where is best and safest to process our data.

Data Centers by Iceland argue that the combination of using renewable energy for electricity and power, using an extremely reliable grid (initially set up for aluminium centres that cannot be off power for more than four hours), and air cooling because of the cold climate make Iceland an ideal place to locate a data centre.

With the increasing levels of energy being consumed by the IT world, many argue that businesses worldwide will now need to reconsider where their data and processes are being stored and run. Could Iceland be the perfect place for this? Only time will tell, but Data Centers by Iceland believes they are making good headway in this area. 

Using mother nature

How to cool a data centre

There is an ongoing rise in the demand for computing power… This rise is not only driving innovation in the construction of data centres but also in charging the demands of the silicon chips that give life to these power-hungry servers within the data centres.

Chips that were once 100 to 200W are now coming in at 350 to 500W, and this capacity will only ever grow in the years to come as chip manufacturers continue to increase the power required to drive each central processing unit and graphics processing unit.

“Innovation from chip manufacturers means computer density is increasing all the time, creating a cooling challenge for many data centre operators,” says a spokesperson at Verne Global.

Data centre providers are already coming up with new technologies to help cool such facilities, but Iceland may very well have an edge over other countries to provide a solution for this: its already cold climate.

In fact, Verne Global’s data campus offers a hybrid cooling solution, which uses both air cooling and liquid cooling. “Liquid cooling is available for very high-density customer deployments,” they explain. “Liquid cooling solves this challenge by supporting rack densities of 100kW and more, offering a future-proofed solution to customers adopting the latest in server technology.”

Verne Global also offers air cooling, both direct and indirect, to support rack densities of up to 50kW. “While this is sufficient for most customer workloads today, we are already seeing customer demand shift from air cooling only to a hybrid of both air and liquid cooling.”

Meanwhile, atNorth utilises the outside air to cool its facilities without mechanical cooling. “Our stand design enables direct air cooling with air handling units and evaporator cooling being an option in N+1 configuration,” atNorth explains.

Borealis Data Center uses a direct free air-cooling methodology for high-density workloads. The solution is employed with three different arrangements over its two campuses: eco-cooling, system air, and direct free air cooling (see illustration above).

For high availability, Borealis uses an indirect free air-cooling methodology, and are preparing for liquid-to-liquid for ultra-high-density workloads.

Direct air cooling also saves these companies electricity. And as of late, the heat generated by the units is not being used for other business, but atNorth has said it heats its offices with excess heat with its data centre and is actively looking for partners to make use of their heat.

Fully utilising the excess heat radiated from the data centres themselves is one of the ideas Data Centers by Iceland as a coalition is aiming to pursue: it is a part of the country’s green incentives programme which aims to encourage private investments to speed up economic recovery while promoting environmentally sustainable solutions.

Iceland also aims to build up its eco-industrial parks, attracting companies that can make use of each other’s waste products as resources to operate in the same area, Data Centers by Iceland added.

Diagram of cooling infrastructure at Borealis Data Center in Iceland

Image credit: Borealis Data Center


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