Iceland and datacenters

October 10, 2009 9:58 PM

After a disastrous experience with international banking, Iceland has a new angle to attract investment. BBC News reports that a company called Verne Global is currently converting an unused warehouse at the former US Navy airbase (Keflavik) near Reykjavik into a carrier neutral datacenter / colocation facility. The promise is abundant carbon-neutral low cost electricity and the lack of need for any air conditioner system. With a mean June/July temperature of only 13C, Iceland can use air side cooling to dissipate the heat generated by densely packed servers. Iceland is not exactly the best place in the world telecom-wise, but it is linked to Europe and North America by the FARICE , DANICE and CANTAT-3 cables.
posted by thewalrus (15 comments total)

While I really like the whole idea of free air-side cooling in datacenters, I think that they are going to run into a slight problem given that Iceland doesn't exactly have a monopoly on cold. The low-cost electricity angle, if it really is cheap compared to competing locations (northern parts of the US, Canada, maybe northern Europe?), might be enough to attract interest, though.

I wonder if it would be realistic to actually serve a high-volume web application to both Europe and N. America from Iceland, or if you'd get hung up on latency or the cost of transit through the cables. (Maybe part of the attraction is that Iceland wants to generate some domestic content so they can get peering instead of pay-per-packet on their downstream traffic?)
posted by Kadin2048 at 10:13 PM on October 10, 2009

The amount of electricity a single blade server uses is a minor expense compared to the really big costs: taxes, labor, backbone costs. I can't see this making them notably competitive, except for the odd few who are looking for "carbon neutrality" bragging rights.

I wish them luck, but it'll take more than this to get it.
posted by Chocolate Pickle at 10:20 PM on October 10, 2009

> The low-cost electricity angle, if it really is cheap compared to competing locations (northern parts of the US, Canada, maybe northern Europe?)

I think they are really banking on the abundance of geothermal power available in Iceland. Using ambient air to cool the facility means they just need to use the cheap electricity to power the equipment (and possibly heat the facility in some parts). These energy savings could offset the bandwidth costs, and could make it justifiable to lay more cables down the line.
posted by mrzarquon at 10:33 PM on October 10, 2009

Actually, the cheap electricity in Iceland is due to hydro, not geothermal.
posted by Chocolate Pickle at 10:45 PM on October 10, 2009

The amount of electricity a single blade server uses is a minor expense compared to the really big costs: taxes, labor, backbone costs.

Maybe in the distant past, but this is no longer true by any measure. The cost of power (including the massive amount of cooling required) is now the primary expenditure of a datacenter, even outpacing the cost of the hardware itself. In fact, in 2005 the amount of electricity needed to power and cool all the datacenters in the US amounted to 1.2 percent of all electricity use. Google's latest and greatest datacenter which they hope to have online by 2011 will have a 103 megawatt demand, which is why they are putting it right next to The Dalles Dam in Oregon for cheap hydro power.
posted by Rhomboid at 1:35 AM on October 11, 2009 [3 favorites]

The amount of electricity a single blade server uses is a minor expense compared to the really big costs: taxes, labor, backbone costs. I can't see this making them notably competitive, except for the odd few who are looking for "carbon neutrality" bragging rights.

Odd few? I work for a financial institution. A supermajority of our carbon footprint is our datacentre. Reducing that is a bit priority.
posted by rodgerd at 2:05 AM on October 11, 2009

Re: Chocolate Pickle's comments above, maybe in a place in the western United States where the electricity costs 8 cents a kilowatt-hour... I imagine the Icelanders are going after European businesses that pay closer to 20 or 24 cents a kilowatt-hour for their electricity. For these companies having a large number of racks of gear, each at about 2.5kW + huge AC units running 24/7 is an expensive proposition.
posted by thewalrus at 2:45 AM on October 11, 2009

This is something I've been expecting of Iceland for a while now. Cheap power means that it's already a magnet for energy-intensive manufacturing (e.g. aluminum refining), and for the same reasons I believe they'll be a big player in a post-fossil-fuels economy.
posted by xthlc at 6:22 AM on October 11, 2009

The low-cost electricity angle, if it really is cheap compared to competing locations (northern parts of the US, Canada, maybe northern Europe?), might be enough to attract interest, though.

It really is super cheap, as xthlc points out they attract a lot of energy intensive industry, the government recently built a new 690MW hydro facility in an area with a tiny population solely to service aluminimum smelting, the smelter has a 30 year contract at fixed price (IIRC). Aluminium smelting companies will ship ore there just for smelting then ship the output out again afterwards.

Iceland is probably only utilising about 15-20% of its large scale hydro potential so there is had historically been the case. When I last checked about 15% of Iceland's electricity came scope for more pretty cheap capacity, though that last one attracted more opposition than from geothermal, most of the rest from hydro, the hydro fraction though that was without the new hydro station. There has been talk of the potential for the construction of a subsea cable from Iceland to Scotland to allow the UK to bring in low carbon electricity (or indeed any electricity as the UK is likely to be facing a supply crisis in the near future) though the economics means this is unlikely to go ahead.

Iceland alsos gets a huge chunk of its heating needs from large geothermal, both space and water heating and this too is ludicrously cheap, so cheap in fact that a few percent of total icelandic energy use is in road heating, i.e. to melt snow and ice on roads and pavements.
posted by biffa at 6:59 AM on October 11, 2009

I've used a Hurricane proof data center, and I've looked at some earthquake proof ones. Not sure how you'd start volcano proofing one though.
posted by IanMorr at 10:43 AM on October 11, 2009 [2 favorites]

Good for them. My grandfather was posted at Keflavik and ended up marrying an Icelandic woman. We poked around there some years ago and I'm glad they're using the land for something else.

Plus, it's nice to see some investment going on in Iceland since they took a terrifying hit in this recession. Great country, great people.
posted by lumpenprole at 12:38 PM on October 11, 2009

Last february Google made a similar move by purchasing a closed paper mill in middle of Finland to be used as a data center. Connections are good, paper mills already have high electricity requirements, overall energy situation is quite safe as there is a new nuclear plant coming, and russian gas is more reliable than in Central Europe. Position at lakeside in nordic climate makes cooling cheap.
posted by Free word order! at 2:03 PM on October 11, 2009

I've used a Hurricane proof data center, and I've looked at some earthquake proof ones. Not sure how you'd start volcano proofing one though.

There's no such thing as earthquake proof. You got suckered.
posted by rodgerd at 3:41 PM on October 11, 2009

I've used a Hurricane proof data center, and I've looked at some earthquake proof ones. Not sure how you'd start volcano proofing one though.

So you are suggesting that an earthquake might happen, or a volcano blow up, like they do near continental rifts, right? In ICELAND??? IMPOSSIBLE!
posted by Laotic at 10:44 AM on October 12, 2009

SeaIceland!
posted by armage at 5:09 PM on October 12, 2009