Nestled in the heart of the Nordic region – comprising Denmark, Sweden, Norway, Finland, and Iceland, where majestic landscapes blend seamlessly with technological innovation, lies a haven unlike any other. Imagine crisp, invigorating air that whispers tales of ancient forests, pristine water bodies that mirror the azure skies, and captivating artistic landscapes that inspire awe. This ethereal setting serves as the backdrop for a groundbreaking endeavour in the realm of data centres.
As the data centre sector grapples with a myriad of challenges, the Nordic region has emerged as a beacon of hope, offering a compelling proposition for large-scale AI and machine learning data centre deployments.
Amidst this natural splendour, the Nordics present an enticing opportunity with an abundance of affordable land, renewable power sources, and the inherent advantage of free air cooling. This unique fusion of natural resources forms the foundation for pioneering ventures in resource-intensive undertakings. However, the region’s relative infancy in this domain poses its own set of obstacles, primarily in the form of a skilled labour shortage.
To circumvent this hurdle, industry titans have adopted a strategic approach, relocating their teams to project sites and fostering local talent development initiatives. This symbiotic relationship between nature and innovation has given rise to innovative construction techniques and unparalleled sustainability initiatives, propelling the advancement of data centre construction in the Nordics and beyond.
According to Research and Markets, the Nordic data centre construction market was valued at US$1.88 billion in 2023, and is expected to reach US$3.18 billion by 2029, rising at a CAGR of 9.16%.
ABB, Alfa Laval, Carrier, Caterpillar, and Cummins are the key players in the Nordic data centre construction market.
This exponential surge is fuelled by the ubiquitous adoption of smart consumer devices, the proliferation of data-intensive media, the rise of robotic factories, the burgeoning market of the Internet of Things (IoT), and the advent of artificial intelligence (AI), machine learning (ML), and other applications like autonomous vehicles. Consequently, the global demand for data processing and storage has skyrocketed, creating a compelling need for the construction of robust digital infrastructure worldwide at affordable costs and where energy is available.
The Nordic Phenomenon
Amidst this global surge, the Nordic region has emerged as a pioneering force, attracting significant investments in new data centres. This phenomenon can be attributed to the region’s unparalleled prowess in the digital economy, with over 90% of its population actively engaging in online services, business digitalization, and e-commerce activities.
The Nordic nations have consistently topped the European Union’s Digital Economy and Society Index (DESI), a testament to their unwavering commitment to technological advancement. From the early adoption of 5G networks to the widespread deployment of Long-Term Evolution (LTE) infrastructure and high-penetration fibre broadband services, the region has established itself as a trailblazer in digital innovation.
The region’s ascent as a data centre powerhouse has been propelled by a wave of investments from industry giants in the hyperscale and cloud computing sectors. Renowned companies like Facebook, Google, Amazon Web Services (AWS), and Apple have recognized the region’s immense potential, fuelling a surge of construction projects and expansion plans.
In addition to the hyperscale and cloud giants, the Nordic region has witnessed a proliferation of investments from global and European colocation providers, as well as enterprises seeking to establish their own data centres. Industry leaders such as Equinix, Digital Realty, and STACK Infrastructure have expanded their existing sites, while Nordic-focused players like Green Mountain, atNorth, Verne Global, have strengthened their presence across the region.
This surge of activity has not gone unnoticed by other prominent players in the colocation and enterprise segments. Potential investors eyeing the Nordic market include Global Switch, China Telecom, NTT, China Mobile International, Telehouse KDDI, CyrusOne, Keppel, STT, Colt, JD.com, EdgeConnex, Orange, Data4, Sabey, CoreSite, KAO, China Unicom, Zayo, AIMS, CloudHQ, and many others.
According to Cushman & Wakefield, the Nordic countries, with 944 MW currently operational, have upcoming capacity of ~1,1 GW, contributing to 12% of the EMEA region’s total under constructions and planned capacity.
Oslo vs Stockholm
Within the Nordic region, two prominent real estate markets stand out, each with unique characteristics and growth trajectories. Both the capital regions of Norway and Sweden, respectively Oslo and Stockholm.
In Oslo, the data centre market has experienced significant expansion, solidifying its position as a pivotal hub for digital infrastructure in Norway and the broader Nordic region. The operational capacity reached 144 MW in the latter half of 2023, with plans for a projected capacity of 442 MW by 2028, showcasing robust growth, says Investropa.
Oslo’s growth is underpinned by strong government backing and a commitment to promoting renewable energy sources, aligning with Norway’s goal of achieving net-zero emissions by 2050. Ambitious initiatives, such as generating 30 GW of offshore wind energy by 2040, contribute to sustainable data centre operations.
The capital’s cool climate reduces the need for energy-intensive cooling systems, while its reliance on renewable energy presents an appealing destination for data centre providers, particularly in the face of growing AI demands.
Across in Sweden, Stockholm, as a data centre hub, benefits from global connectivity and strategic positioning in the Nordic region. It comprises 70% of the operational data centre capacity in Sweden and is fuelled by digital competitiveness, governmental efforts, and the increasing need for cloud services.
Similarly to Norway, Sweden’s noticeable standing in digital competitiveness and supportive governmental policies have contributed to the growth of its data centre market. The nation’s emphasis on AI and renewable energy further nurtures a business environment that promotes sustainable practices.
The country’s dedication to renewable energy, with hydroelectric and nuclear power contributing 75% of electricity generation, encourages data centre operators to adopt renewable energy solutions. Efforts to utilize surplus heat in the district heating network have also contributed to emissions reduction.
In the years to come, the Nordic powerhouse is poised to cement its place as a global hub for data centre development, shaping the future of digital infrastructure while upholding the principles of environmental stewardship and technological innovation. The region is truly paving the way for a sustainable digital future, where data and sustainability converge to unlock opportunities for growth and progress.
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