Iceland, data centres and inflation

We have talked about data centres in Ireland before but someone sent me this and I thought it was worth sharing.

Verne Global is a wholesale data center developer based in Keflavik, Iceland, and Washington, D.C. The company is a joint venture between Novator and General Catalyst Partners. Our mission is to develop data centers in optimized geographic areas that offer the best total cost of ownership (TCO) and 100% renewable power without a price premium. Our Icelandic facility embodies that mission. Capitalizing on Iceland’s favorable natural attributes and our unique relationship with the national government, we are building the country’s first large-scale, mission-critical data center. This green data platform near Reykjanesbær will leverage state-of-the-art infrastructure design, Iceland’s cool climate, and sustainable hydro and geothermal energy sources to capitalize on the country’s attractively priced renewable energy and free cooling opportunities.

All of Iceland’s electricity comes from affordable, sustainable geothermal and hydroelectric energy. There’s no “greenwashing”” here. These resources are 100% renewable, with no green energy price premium. The price is low, and production is free from both the atmospheric emissions of fossil fuels and the potential hazards of nuclear power.  With Verne Global’s access to long-term power commitments, you’re guaranteed a supply of continuous, high-quality electricity at a fixed rate. You can lock in a low, inflation-protected rate for up to 20 years and shield yourself from any escalation in global electric power prices.

What caught my eye, given the current debate in New Brunswick, was the comment about locking in a “low, inflation-protected rate for up to 20 years” and ‘shielding’ yourself from escalation in global electric power prices.

So I looked at their model.  From this white paper:

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The are saying that a 3% increase in electicity costs is ‘inflation-protected’.  The deal between NB and Quebec will result in far less cost increases than in Iceland – the inflation rate they are predicting in Ireland is 50% than the inflation rate in New Brunswick over the past decade (1.9% since 1994).

Some inflation protected.  Having said that, few can compete with Iceland on their cost per MW.

Geothermal production costs range from US$15–25 per MWh, only one-quarter of the world average. As of 1 January 2009, base load contracts with Iceland’s largest electricity supplier were available at US$29.59–33.45 per MWh.

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2 Responses to Iceland, data centres and inflation

  1. Samonymous says:

    I guess this is one island that is lucky they’re not in our federation and just off the coast of Nova Scotia. 😉

  2. Energy costs have little to do with location choices of data centre operations. If they did, they would all be in Quebec instead of spread out across the US.

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