IT firms follow Facebook to Sweden’s icy north

A slew of global IT firms are planning to follow Facebook's build data centres around chilly Luleå in Sweden's far north while local politicians warn that high electricity taxes threaten the development.

Published: 2 November 2014 12:58 CET

IT firms follow Facebook to Sweden's icy north

An ice sculpture outside of Facebook's data centre in Luleå. Photo: Facebook.

When the social media phenomenon Facebook picked this chilly city 725 kilometres north of Stockholm for its first data centre outside the United States, it was wooed by the climate – literally and figuratively.

The combination of cool temperatures, hot business climate and a plentiful supply of locally-produced green energy swayed the Silicon Valley firm and now several others are set to follow Facebook's path to Sweden's northern frontier.

Facebook is itself set to expand by building another data centre and British Hydro 66, which sells data capacity, and bitcoinbolaget KNC Miner are among the firms heading for the Luleå region. In total there are five halls completed or under construction.

The development is welcomed and encouraged by local politicians who have however expressed fears that Sweden's high level of energy taxes may harm the development of what they are referring to as a new primary industry for the mineral rich region.

Facebook is obliged to pay some 30 million kronor ($4 million) more in electricity tax than Google who elected to locate a large facility in neighbouring Finland, according to Niklas Nordström of Luleå municipality.

"The Finns will be the winners here unless there is a tax cut," he said

Nordström also serves as chairman of a joint cooperative body in Luleå, Piteå and Boden called Node Pole, whose main task is to facilitate the establishment of new businesses. Among other things, Node Pole seeks to smooth the planning process. Node Pole has denied however that the process constitutes a fast track for international IT companies.

"Not really. But we try to be very responsive and understand what the companies needs are and what questions they want answered in terms of electrical capacity, land and infrastructure. You have to have an extremely focused offer."

Electricity supply is critical to IT companies whose total data centre capacity accounts for about 2 percent of world energy consumption. Most firms also strive to be climate-conscious and have green electricity as a core requirement. Electricity supply must also be extremely reliable and Luleå's own record of no major power outage since the late 1970 is a key merit.

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