June 14 (Bloomberg) -- “Hello Mr. Mayor, this is Facebook,” Karl Petersen heard as he answered his telephone one dark, cold night in northern Sweden in February 2011. “You are the mayor and have to know first -- we are coming to Luleaa.”
That call marked the start of the development of Facebook Inc.’s first data center outside the U.S. as the world’s biggest social network seeks to accommodate the growing data needs of its more than 1 billion active monthly users. Opened this week in the town of Luleaa, which lies on the same latitude as Fairbanks, Alaska, and has 75,000 inhabitants, the center covers an area equivalent to five soccer fields.
With its users generating more than 10 billion messages, 350 million photos and 4.5 billion likes every day, Menlo Park, California-based Facebook needs that space. It also needs electricity, lots of it, and chilly air to cool the facility. In Luleaa, there is an abundance of both.
“We started with the premise that we have more users outside the U.S. than inside and that we wanted something in Europe,” Tom Furlong, Facebook’s director of site operations, said in an interview at the new data center. “We looked across a lot of European countries and some of the key characteristics we are looking for is the climate.”
Luleaa winters are long, dark and cold with temperatures below the freezing point five months of the year and with as little as four hours of daylight during December. That sets the northern Swedish location apart from Facebook’s other data centers in Prineville, Oregon, and Forest City, North Carolina.
“In Prineville it does get hot in the summer so the fans work harder and we have to cool the air coming in,” Furlong said. “We’ll probably almost never have to do that here.”
Luleaa, situated on the coast of the northernmost part of the Baltic Sea, is also a net exporter of energy thanks to its location by the mouth of a river that generates twice as much power as the Hoover Dam on the Colorado River. This will enable Facebook to run its Luleaa center on hydropower and help the social-media company reach its goal of generating at least 25 percent of its energy from renewable sources by 2015.
Facebook isn’t alone in looking for data-storage space in the Nordic countries. Google Inc., the operator of the world’s most popular Internet search engine, said this month it will buy the entire output of a new wind farm in northern Sweden and use the electricity to power its data center in Hamina, Finland. Iceland, which also has a cool climate and which uses geothermal energy to cover much of its power needs, is also trying to reinvent itself as a data-center hub.
The global market for greener data centers will grow to $45.4 billion by 2016 from $17.1 billion in 2012, according to estimates from Pike Research.
Facebook has an option to build two more centers at the Luleaa site. The city is also aiming to attract other companies with data-storage needs through a PR campaign it has branded “The Node Pole,” Mayor Petersen said in an interview. Facebook has employed 50 people in Luleaa so far, most of them locals, he said.
If the U.S. company opens all three centers, it will boost Sweden’s annual electricity consumption by 473 gigawatt hours, according to Kenneth Fors, an environmental engineer at the Norrbotten County administrative board. Such an increase would equal the annual power usage of 16,000 Nordic homes, or 0.3 percent of Sweden’s annual consumption, he said.
While Facebook declined to give exact details on its Luleaa investment, the company said it has spent “hundreds of millions of dollars” on the facility. Swedish construction company NCC AB, which built the data center, said its contract was worth 808 million kronor ($123.8 million). The center, which processes requests by Facebook users and stores data like status updates and wall posts, is the most northernly of its kind and the biggest in Europe.
Facebook shares slid 0.8 percent to $23.55 at 9:48 a.m. in New York, giving the company a market value of $56.9 billion.
In Luleaa, Facebook’s plans were code-named “Project Gold” by the municipality and largely kept secret until revealed by Facebook in October 2011, the mayor said.
“You know it’s there, but you don’t hear so much about it,” said David Henriksson Littorin, a 27-year-old who works in a clothing store on Luleaa’s main shopping street, adding he just sold a suit to one of the Facebook employees. “It’s great that Luleaa got this -- it puts Luleaa on the world map.”
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