Icelandic energy to be used for data centres

Landsvirkjun, the Icelandic national power company, has decided that future energy sales negotiations will focus on server farms and solar silicon production, rather than aluminium smelting. Landsvirkjun announced in a press release on Friday that it has, “for the time being, decided not to enter into negotiations with aluminum companies planning to build in the south or west part of Iceland”.

The decision to move energy supplies to cleaner, eco-friendly industries such as data centres marks a fundamental shift in direction from the previous focus on the aluminum industry.
“This is a business decision. …we have wanted to increase our client base and diversify against risk, not to be dependant on one industry,” said Pall Magnusson, chairman of the board of Landsvirkjun to national newspaper Morgunbladid.
Landsvirkjun has already discussed energy contracts with a number of data centre ventures and negotiations are in the pipeline for several companies interested in producing silicon for solar cells.
Verne Holdings, a joint venture between General Catalyst and Novator, is planning on constructing a data center on the old NATO base next to Keflavik International Airport.
In an interview with RUV, the Icelandic national radio, the CEO of Verne Holdings said that the new server farm at Keflavik will host data from a wide range of industries, including financial, retail, oil and movie. It will also be one of the 20 largest of its kind in the world.
The data centre will initially require approximately 5MW of power but will scale up to 50MW or more in the future. It will use the new Danice submarine fibre optic cable as its primary connection to Europe with secondary services through Farice 1.
A combination of cheap geothermal and hydroelectric energy, cool temperatures and high security makes Iceland a prime location for server farms.