Data storage in Iceland

A country “making the most of its natural resources” typically refers to either mining or energy generation. Few might consider cold a “natural resource”, but that is where Iceland, with its sub-zero temperatures, is looking to buck the trend.

A country “making the most of its natural resources” typically refers to either mining or energy generation. Few might consider cold a “natural resource”, but that is where Iceland, with its sub-zero temperatures, is looking to buck the trend.

Of all countries, Iceland was arguably the worst hit by the global economic crisis – with the total collapse of its financial institutions and everything that followed. However, life must go on, and one of the ways that the country is looking to grow its way out of recession is by investing in data centre infrastructure. Following the collapse of its banks, the Icelandic government has promised to spend big on computer infrastructure and next generation networks, in order to attract global internet and, ironically, banking clients, to establish facilities in the region.

The data on the internet is contained in giant server clusters, which occupy thousands of square metres of land and require enormous amounts of energy to run. They also get very hot and need to be cooled, which requires half as much energy again. Today, data centre operations worldwide are believed to produce roughly the same amount of carbon dioxide as the airline industry – around two percent of man-made CO2.

This is where Iceland hopes to lever its “natural resources” in order to gain competitive advantage and become a world hub for data centre activity. Having a very cold climate, the amount of energy and money that has to be expended on cooling servers in Iceland is naturally much lower than it is in warmer climbs. Also, because Iceland generates 100 percent of its electricity from geothermal power, the costs and pollutants associated with conventional forms of energy production, such as burning coal, are also much lower – electricity in Iceland is virtually free, as a result.

So, at the same time as lowering their costs, companies can also offset the amount of carbon they produce – everybody wins! The one snag is: the source of Iceland's cheap energy... is volcanic. You can't have everything, I guess.

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