Iceland: Cheap Power, But Some Risk

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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About the Author

Rich Miller is the founder and editor at large of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.


  1. Jon Fridjonsson

    "..server farm on top of volcano." Don't advertise your ignorance. Volcanic activity isn't that much in Iceland. You might see some small ones every 15 years and big ones every 100 years and it's not like it's going to happen in the middle of Reykjavik. A big datacenter in Reykjavik would be an excellent idea. Abundant cheap CLEAN power, cleaner then the Google building with football fields of solar panels. There are actually few datacenters in Reykjavik that are tapping into the CANTAT-3 cable. Why not put your servers that serve international customers right between United States and Europe? Especially game servers! Hello Microsoft!

  2. Google's HQ is right by the San Andreas fault, one of the most active earthquake regions in the world...

  3. Tom: Google has a compelling business reason for having its HQ and many of its data centers in Silicon Valley. Google also has the luxury of being more discerning in scouting site locations for new data centers, seeking the right combination of cost, connectivity and business climate (including economic incentives from local governments). From a business perspective, Reykjavik isn't Mountain View or San Jose, which is why I think the natural disaster risk looms larger in the site location equation.