This December, FarrPoint CEO Andrew Muir attended the Datacenter Forum event in Stockholm to hear about the latest trends and developments in the data center market in Scandinavia. Read his insights to learn about the latest excess heat use cases, AI investment and some of the challenges the Nordics face.
Author: Dr Andrew Muir, CEO at FarrPoint
The (this will open in a new window)Datacenter Forum conference took place in Stockholm last week and (this will open in a new window)Andrew attended to hear how the Nordic countries are reacting to the ongoing demand for data centres. This was the fourth forum event of the year, following events in Norway, Finland, and Denmark earlier in the year. The event was very well attended, with good, healthy catering and plenty of networking opportunities, which are good metrics. The agenda was largely focused on the industry's environmental demands, the impact of AI, and the ever-challenging topic of energy supply. Andrew has provided valuable insights from the event, highlighting key takeaways and industry trends.
As part of the EU Energy Efficiency Directive, all data centres over 1MW must consider how to make use of excess heat, and consequently, there is a lot of interest in different options for dealing with waste heat. Sweden benefits from the fact that 240 of their 290 municipalities have district heating systems, which can be a relatively easy solution for data centre heat reuse. However, many attendees spoke of the challenges of finding a steady load for the excess heat, matching the heat supply with the demand, and constructing commercial models to make it work for all sides.
Examples included greenhouses on data centre roofs, several aquaculture projects for tropical species, and underground centres with buildings above to take advantage of the heat. It was noted that aquaculture models work best with tropical species which need the heat, but these are generally different from the species for which there is a market. While aquaculture is a good, stable load, the business case can be challenging.
For low-grade heat (<50o), food production is seen as key, but greenhouse heat demand is quite varied and needs accurate temperature control, which may be hard to deliver from data centres. I’m sure these are all topics the data centre market probably never thought they’d have to consider!
For medium-temperature heat, domestic water and the latest generation of district heating are suitable with medium-lift heat pumps. In contrast, high-temperature heat is required for older-generation district heating combined with a suitable high-lift heat pump.
There is a lot of research, trials and developing technologies around waste heat and it’s clearly a complex model to get right commercially.
AI is regarded as hyped from a timing perspective, but the scale of the industry's change is not; it is just when it will happen. The phrase “We’re inventing in AI as we go” highlighted the coming uncertainty and change.
This unpredictability of AI can affect infrastructure investment. The investment model is turned on its head somewhat. Instead of building a data centre and then trying to fill it, the application (e.g. AI) is now the key component. This then drives the hardware, which drives the cooling, which drives the data centre building requirements. This means that the speculative build of data centres with the demands on energy supply and the local grid for as yet uncertain demand is a real challenge.
AI is also driving developments in liquid cooling, which is necessary for heat reuse and can reduce energy consumption within a data centre by up to 40%. It’s predicted this technology will go from niche to mainstream, although not all heat can be removed through liquid cooling, with air still handling around 30% of the heat, meaning a hybrid approach to cooling will be required. An extreme example of liquid cooling is the subsea data centre pods developed by companies like Subsea Cloud. Theoretically, these could be located in rivers and lakes near metropolitan areas.
There was a bit of a downbeat feeling about how the Nordics are preparing for AI. It’s a geography with relatively good power, good fibre connectivity, talented workforces, and a good digital ecosystem, yet there is disappointment that the region is not leading as it should. Thoughts were that better coordination and integration of industry resources were required, i.e., less fragmentation, and more policy direction to help drive this.
Energy supply was also a common theme, with developers in Norway finding it harder to secure supply, Sweden being a bit easier outside metropolitan areas, and Finland being the easiest to secure capacity. The demand is for 100MW as soon as possible, with the uses often speculative but a belief that the facilities will get filled - a bit of a “Wild West goldrush” theme by all accounts.
With presentations on the latest Nvidia chips driving liquid-cooled rack power at 120kW, this energy demand is going to continue to be a real problem. There was no mention of SMRs, but they must be considered a possible solution.
Results of a survey of data centre operators across the Nordics were presented, which ranked hydropower, wind, solar and geothermal as the order of their preferred renewable sources.
As energy supply becomes constrained in metropolitan areas, more northern areas are being considered for development. However, these are the areas where investment in grid infrastructure is needed, which raises the question of who should pay. Resilient fibre connectivity also needs to be improved outside metropolitans, which again requires investment.
Speaking with delegates involved in developing data centre sites suggests there remains tremendous demand, with securing energy sources and sinks for waste heat being the key criteria. Estonia and Lithuania, as slightly cheaper Baltic alternatives, were also target areas from some of the Nordic developers.
In summary, a really interesting event in a growing industry which is dealing with lots of new technical developments to meet a known and sometimes speculative market need, which is under more external observation and regulation.
A final thought on my way home – they do infrastructure really well in general in the Nordics (just look at Helsinki airport as an example) which perhaps bodes well for growth in their data centre capability.
We advise both public and private sector organisations on a variety of subjects from site selection and reviews to local data centre strategy.
Connectivity is important. It drives business and society, bringing communities and commerce together. That's why we use our insight and experience to connect people and business.