Fear of the battle for power – E24

The prospects for higher energy consumption make more players worry about supplying electricity to the new industry.

E24 recently wrote about concerns about the development of new jobs in Mongstad in Vestland County, due to the lack of network capacity in the area.

When Elkem recently chose to add a new billion-dollar plant to Porsgrunn, it was in part because there is good access to electricity there.

Several players fear there could be a battle for pure Norwegian energy, especially if demand increases and grid production and development doesn’t keep pace. ICT Norway expects the data center industry to be given priority.

– We’re not worried so far. But if we find ourselves in a situation where there is a renewable energy deficit, then a discussion can be opened on how this scarce resource should be used, says ICT Norway acting CEO Fredrik Syversen.

ICT Norway emphasizes that data centers are an important part of the global green shift. Today, many data centers around the world run on fossil fuels, and data centers in the Nordic region running on renewable energy provide a low carbon footprint.

You want a faster web construction

The Norwegian Directorate of Water Resources and Energy (NVE) expects the Nordic energy surplus in a normal year to increase from 21 terawatt hours (TWh) in 2019 to 58 TWh in 2040. But this presupposes a huge development of wind energy, which is controversial.

So far, there is enough power, but it may take a long time to expand the network. That worries Tor Kristian Gyland of Smedvig’s Green Mountain data center.

– We have electricity, but we probably believe that something needs to be done with the investments in the electricity grid and the processes that form the basis before a development of the grid can take place. The licensing and construction processes of network companies take too long, Gyland explains to E24.

However, he is not concerned that Norway will lack energy in the future and believes that it is possible to extract a lot of electricity by rationalizing buildings and improving hydroelectric power.

Worried about the areas

ICT Norway is also concerned about access to land for the data center industry.

They believe Green Mountain’s plans for a data center in Kalberg in Time Township will be a major test for the industry. There has been resistance, among other things, by the surface layer of the soil.

– We hope we are not limited by either local opposition to data centers or lack of access to power. At the same time that players are evaluating locations in Norway, they get calls from Invest in Denmark and Business Sweden saying they have a lot of pitches and the same clean electricity we can offer, says Syversen.

The municipality of Time has not decided whether the area in question will be re-regulated for industrial activities.

– We must change the area to avoid the level of conflict we see today related to soil protection, says Gyland.

He points out that the municipality has now received a report from Norconsult showing that data centers generate many jobs and a lot of value, both in the construction phase and in the operation phase.

– Domino effects other than employment

Municipalities often ask for local jobs when considering a new industry. Data centers have a financial domino effect, but it is not always the case that there are so many local jobs in the operational phase.

– I think it can be a PR challenge, says Syversen at ICT Norway.

– Many mayors are concerned about the amount of jobs they get for their municipality. However, it is permissible to point out other domino effects of an investment in addition to employment. Reports from Sweden show Facebook’s investments have a large ripple effect in the form of, among other things, construction, consulting and electrical work, he says.

Believe in multiplied capacity

If Norway can facilitate the data center industry, Syversen believes that it is possible to multiply capacity in the industry in a few years.

– We believe that we can triple or quadruple what we have capacity in the next five years, if we can bring the projects that are on the stairs, he says.

– Norwegian players have managed to offer data centers that perform extremely well in competition with the rest of the world and win contracts. This is a value creator we’ve only seen the beginning of, says Syversen.

Waiting for a national clarification

Syversen hopes the state can ensure electricity gets to where it is needed. ICT Norway wants predictable framework conditions so that the industry can establish new businesses and create value.

– This must be decided centrally. We are eagerly awaiting the data center strategy from the Ministry of Local Government and Modernization, and there will also be a ripple effects analysis, he says.

– With so many potentially conflicting interests, the state must step in and figure out how to balance different considerations. We need a stable political framework and access to cheap renewable electricity in order to continue growing as an industry, he says.