Data Centers Spring Up in Santa's Backyard

Rising needs for storage drive U.S. Web leaders toward the Arctic
565 GWh: Estimated average annual electricity generated at the station, one of 16 dotting the Lule River Photograph by Hans Blomberg/Vattenfall

The star of Sweden’s hydroelectric system is a 56-foot-wide turbine named Gerhard, buried about a football field’s length beneath the Lule River. With the push of a button on a far-off computer, water tumbles down a 345-foot man-made dam and through Gerhard, making the turbine spin 107 times a minute and generating as much juice as a small nuclear reactor. Anyone nearby feels his organs vibrate and the earth shake.

Fifteen stations with similar turbines dot the Lule, which runs 280 miles from the top of the world down to the Gulf of Bothnia, between Sweden and Finland. The dams provide northern Sweden with a surplus of clean, cheap, stable electricity, and they have attracted U.S. consumer Web companies looking to plant their heat-spewing, power-hungry data centers in frigid Scandinavia.

Google has spent more than $1 billion to buy and renovate a former paper mill in Finland that can store its user data. Nestled in the caves of a Norwegian mountain, a regional IT company uses a facility built by a local investment group and cooled by a fjord. Microsoft says it will spend $250 million to construct a data center in Finland to manage its cloud services, as part of its agreement to acquire Nokia’s device business.

In Luleå, a city of 50,000 on the banks of the Lule less than 70 miles south of the Arctic Circle, Facebook fired up a 300,000-square-foot data center last year. Filled with servers processing friend requests and likes, it’s the signature success of the city fathers, who call the region the Node Pole. The name comes from an industry term for computer, as in, “My data center has 40,000 nodes. How about yours, bro?”

For most of the Internet’s history, organizations tried to locate their large computing centers near the people using computers. The first such hubs cropped up around universities. Later, some of the biggest data centers were built near financial capitals such as New York, Los Angeles, London, Amsterdam, and Frankfurt. Now they’re getting much bigger: In the past few years, as cloud services have taken off, consumer Web companies have raced to build jumbo data centers several times the size of most previous models.

The resulting expense has led companies to look for ways to operate as cheaply as possible. “Their whole business model is to give away computing for free,” says Andrew Feldman, an executive with chipmaker Advanced Micro Devices. “The manufacturing floor at Facebook is the data center, and it controls their profit. When that’s the case, you have your smartest people tune the life out of the system.”

Google began searching for a wider range of data center locations about a decade ago, heading to such places as Oklahoma and Washington; Microsoft,, and Yahoo! soon followed, placing data near dams in Oregon and in rural areas such as Iowa that offered low-priced wind power. When they couldn’t bring costs down further, they turned to Scandinavia, with its abundance of inexpensive energy and cool air that made air conditioning unnecessary. In Finland, Google uses wind power and frigid water from the Gulf of Finland to cool its computers. In Norway, similar seawater cooling techniques have created what local IT services firm ErgoGroup calls the greenest data center in the world.

Sweden began building its hydroelectric infrastructure at the turn of the 20th century to electrify its railway system for iron ore transport. Luleå, which dates to the 17th century, feels modern and optimistic, with a main street flanked by a park, high-end clothing shops, and hotels. The city claims one of Sweden’s best technical universities, home to 17,000 students, and steel producer SSAB operates a mill that’s so large it dwarfs the rest of the town.

The area is eager to attract data center construction. In 2010, Sweden ended its compulsory military service, dealing a huge blow to northern cities that had supported tens of thousands of soldiers in training. “The motto up here used to be that the enemy always came from the east and his name was Ivan,” says Rick Abrahamsson, an executive with Vattenfall, the utility that manages the hydroelectric system, referring to Russia. “Now the bases are all shut down.”

Facebook’s data center looks a little Soviet. It’s a giant, rectangular building with an exterior built from thousands of metal panels. “We’re running on 100 percent clean hydroelectric power, and our exhaust is clean air,” says Niall McEnegart, Facebook’s operations manager in Europe. Luleå locals have started to buzz about two companies filing permits to build computing centers in the area. Their identities remain secret for now, but the cabbies who trade in gossip seem quite confident that Google is one.

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