Iceland is working to tip the scales toward renewable energy in a world where most computing needs are powered by coal.

The familiar fuss is that fossil fuels make the most business sense for computing. Data centers -- the big warehouses full of servers that process all our Googling, emailing, online banking and so forth -- are situated in areas that have easy access to cheap energy.

Coal and other traditional energy sources keep them running. But as data centers proliferate to feed the demands of the digital age, environmentalists say clean energy-supplied facilities are crucial to keep the growing greenhouse gas emissions from information technology in check.

Sprouting tech firms think they have found a sweet spot for clean-sourced data centers in Iceland. The Nordic island is ideal for hosting facilities that need inexpensive, but reliable renewable energy, the IT pioneers say.

Iceland has vast renewable resources and is conveniently nestled between North America and Europe. Plus, it has got a temperate climate and infrastructure connecting it to major population centers.

"All of those things meet at a cross section over Iceland that we really don't believe to exist anywhere else," explained Jeff Monroe, CEO of three-year-old data center company Verne Global.

At least, that is what Iceland's IT pros are counting on. They see their nation becoming a player in the clean technology scene. Industry observers are more cautious, but curious.

For years, Iceland has been looking for ways to commoditize the nearly endless energy resources presented by its geothermal activity and hydropower. The aluminum industry has been drawn in. Alcoa Inc. and others use the country's inexpensive power to run their energy-intensive aluminum smelting operations.

But it is not enough. Iceland was crippled by financial collapse just three years ago. It needs all the new foreign investment and related jobs that it can get. "We think it's important to have a variety of businesses," explained Einar Hansen Tómasson. "We have to diversify and distribute the risks."

Tómasson is project manager for Invest in Iceland Agency, an independent arm of the federal government. He's watched IT growth simmer within the country's borders for the past seven or eight years and wondered how it might connect with much bigger business abroad.

Most of the right pieces
Electricity is dirt cheap in Iceland, at prices as low as 4 cents per kilowatt-hour. That's compared to 10.77 cents per kilowatt-hour for commercial users of U.S. electricity, according to U.S. Energy Information Administration statistics for 2011.

Iceland's low energy costs are thanks to hot water streams from volcanoes and springs that give the country widespread access to geothermal energy. Meanwhile, rivers and waterfalls provide abundant hydropower. Virtually all of Iceland's electricity comes from these sources.

Data centers, notorious 24-hour energy guzzlers, can benefit from that cheap power and the efficient grids that have been built up to distribute it. Generous contracts with utilities allow low rates to be locked in for 15 years or longer. Also, Iceland's climate helps cool data centers naturally, sharply reducing air conditioning bills -- another major energy expenditure the biggest data center operators usually face.

Verne Global's data center, located in a former NATO command center in Keflavik, about 29 miles southwest of Reykjavik, will come into service this quarter. Its 100 megawatts of server power capacity will be filled with server modules as needed. One client, IT firm Datapipe, has already signed on.

The second Iceland facility, Thor Data Center, opened last year in Hafnarfjörður, 6 miles outside Reykjavik, and has 28,000 square feet to work with, some of which is already in use.

Still, various obstacles have kept Iceland's data center growth from reaching a boil.

2 Comments

1. 1. sethdayal 11:49 AM 10/18/11

   What stupidity.
   
   All electricity in Washington state is hydro or nuclear and BCHydro is all hydro. Locate the server farm in Vancouver or Seattle - no carbon.
   
   Or build a server right beside a nuclear plant anywhere and contract for the 24/7 energy. Zero carbon.

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2. 2. jtdwyer in reply to sethdayal 12:35 PM 10/18/11

   Precisely.
   
   What difference would it make if all internet services were powered by clean geothermal if all other energy production were dirty coal, for example? Would we be better off in some way?

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