Google invests $700 million in Danish data center, secures green energy

[November 20, 2018]   By Stine Jacobsen and Teis Jensen

COPENHAGEN (Reuters) - Google will invest almost $700 million in a Danish data center 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 center 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 centers.

Annual investment in Nordic data centers could double to more than 4 billion euros ($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.

 The brand logo of Alphabet Inc's Google is seen outside its office in Beijing, China August 8, 2018. REUTERS/Thomas Peter

This is partly due to the region's plentiful renewable energy and political stability while the planned installation of major fiber 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 centers.

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 center in the small city of Fredericia will cost 4.5 billion Danish crowns ($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 center. Facebook has also planned a data center in Denmark.

Denmark is home to a large wind energy sector including turbine maker Vestas Wind Systems and offshore wind farm developer Orsted.

(Reporting by Stine Jacobsen and Teis Jensen, Editing by Sherry Jacob-Phillips, Louise Heavens and Adrian Croft)

[© 2018 Thomson Reuters. All rights reserved.]

Copyright 2018 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.