COPENHAGEN: Google will invest almost US$700 million in a Danish data centre powered by the abundant green energy that underpins power-
intensive companies' interest in the Nordic region.
Google also said it would sign a power purchase agreement (PPA) for the new Danish data centre to ensure it is powered by renewable energy.
The Nordic countries, which can generate electricity relatively cheaply from renewable sources such as hydropower and wind, have long been a magnet for heavy power-using industries, but are now attracting power-hungry data centres.
Annual investment in Nordic data centres could double to more than 4 billion euros (US$4.57 billion) by 2025, a new study published by the Nordic Council of Ministers, the official body for regional cooperation, said on Tuesday.
Big companies have rushed to secure cheap renewable energy to manage costs and reduce their carbon footprint through corporate PPAs which allow firms such as Google, owned by Alphabet Inc, Facebook and Microsoft to buy directly from energy generators.
Nordic countries are competing for the multi-billion-euro investments with the more established FLAP-D markets, an acronym for Frankfurt-London-Amsterdam-Paris-Dublin.
While the Nordics are still perceived as less connected than these markets, the region is likely to gain market share, the Council of Ministers' study said.
This is partly due to the region's plentiful renewable energy and political stability while the planned installation of major fibre optic links to North America and Asia will improve connectivity.
Google said it is also evaluating investments in a number of onshore and offshore wind and solar energy projects in Denmark.
In September, Google signed a 10-year deal to buy renewable energy from three new wind farms being built in Finland that will power one of its data centres.
Last year, the number of new corporate PPAs, primarily wind and solar, reached a record with more than 5 gigawatt contracted, up almost a third from the 2016 level, according to the International Renewable Energy Agency.
The new data centre in the small city of Fredericia will cost 4.5 billion Danish crowns (US$689 million) and employ 150 to 200 staff once completed in 2021, according to the plans.
Besides Fredericia, Google bought another plot last year in Aabenraa, Denmark, next to a planned Apple Inc data centre. Facebook has also planned a data centre in Denmark.
Denmark is home to a large wind energy sector including turbine maker Vestas Wind Systems and offshore wind farm developer Orsted.
(US$1 = 0.8748 euros)
(US$1 = 6.5261 Danish crowns)
(Reporting by Stine Jacobsen and Teis Jensen, Editing by Sherry Jacob-Phillips, Louise Heavens and Adrian Croft)