Iceland: Cheap Power, But Some Risk

Iceland is marketing itself as a data center destination, offering cheap power and connectivity. And volcanoes.

Google's announcements of its data center projects in North Carolina and South Carolina have prompted speculation about where we might next see a Google dataplex. Tom Foremski at Silicon Valley Watcher suggests that Google might consider Iceland as a destination:

Energy is virtually free in Iceland because of all the geothermal hotspots there. Very cheap electric power attracts aluminum smelters. But where there are aluminum smelters GOOG is not far behind these days. GOOG also wants cheap electric power for its data centers, and that is why it is building a massive data center in Oregon, tapping into cheap(er) hydroelectric power. How long before GOOG data centers spring up in Iceland?

The folks at Invest in Iceland have already considered this, and have a page on their web site touting Iceland as an affordable destination for data center development, complete with a PDF brochure summarizing a cost study from KPMG. Iceland is located on a major submarine cable route and has a digital phone system.

So why isn't Iceland already overrun with data centers? Let's not forget the source of all that geothermal energy: Iceland sits atop an active volcanic rift. Cheap power, great connectivity and volcanic eruptions. Some companies operate data centers in Iceland, such as the Reykjav"k-based online game EVE Online. But I'm not sure Google's ready to spend hundreds of millions of dollars to build a server farm atop a volcano.

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