by Kim Schultz, Special Advisor at Invest in Denmark
“DK” is the official abbreviation for Denmark – most people will recognise this from Danish websites or car number plates “DK” is also slowly becoming an abbreviation for “Digital Kingdom”.
Denmark is rapidly turning into the new digital hub of Northern Europe with a series of attractive conditions for data centre investors and companies including availability of green power and a solid digital infrastructure.
The Danish market benefits from exceptional grid reliability, competitive power costs, availability of renewable energy, a cool climate, the opportunity to reuse waste heat, political and financial stability, low risk of natural disasters and much more.
During the last couple of years, several of the world’s largest tech companies pinpointed Denmark as a top European location for data centres.
Apple is currently building one of the world’s largest data centres (potentially 160,000 m2) near the city of Viborg and has acquired a second even larger site near the city of Aabenraa, close to the Danish-German border.
Facebook has a 53,000 m2 data centre under construction in Odense, right in the middle of Denmark, and have recently confirmed they are considering a second site near Esbjerg.
Last, but not least, Google has acquired two large-scale sites near the cities of Fredericia and Aabenraa respectively for future data centre projects.
Unique digital connectivity
The Irish fibre cable capacity provider, AquaComms, has announced two subsea cable projects, which are going to land in the Esbjerg/Varde region on the Danish west coast.
Furthermore, construction of a combined power and fibre cable, connecting Esbjerg with Emshaven in the Netherlands is underway.
This cable is owned by the Danish and Dutch TSO’s.
The two AquaComms projects are the “Havfrue” cable connecting Denmark with New Jersey in the US, and “North Sea Connect”, which will connect Denmark with the UK and Ireland.
These three new subsea fibre projects, combined with existing fibre connectivity to Central Europe and the other Nordic countries, are turning the Esbjerg/Varde region in western Denmark, and Denmark in general, into a true digital connectivity hub.
Reliable low cost green power
The Danish power grid is extremely reliable.
Of all European countries, only Luxembourg has a marginally more reliable power grid than Denmark.
In addition, 72% of the power available in Denmark currently comes from renewable sources.
This is expected to increase to 80% by 2022 and 100% by 2030.
Finally, the cost of electricity in Denmark is below the European average.
The gradual phase out of the PSO tax on power will reduce costs further.
Depending on the market price development, this is expected to bring power costs down to around 5 euro cent per kWh or less by 2021, which is more or less equivalent to the price level of the other Nordic countries.
Stable economic and political business environment
The Danish economy is rated as one of the strongest in the world and has been awarded an AAA credit rating by S&P, Moody’s, and Fitch.
Amongst other areas, Denmark continues to focus on public investments within transport infrastructure, renewable energy, and the power grid.
When it comes to renewable energy, support is particularly widespread among politicians, industry leaders and the population in general.
For example, this year the Danish parliament adopted a national energy agreement, which sets ambitious targets like 100% renewable power in the grid by 2030 and a totally fossil fuel independent society by 2050.
All parliamentary members voted in favour of the agreement.
This unanimous support provides a high degree of predictability and stable framework conditions for investors.
Access to a cool stable climate
Due to the surrounding sea, the temperature in Denmark is stable with limited fluctuations between an average 13°C in the summer and 3°C in winter.
For data centres, this means that the cooling requirements are minimal and the narrower temperature fluctuation reduces wear and tear on equipment.
Innovative and effective use of waste heat
In Denmark, 64% of all households are currently heated by district heating, mainly provided by combined heat and power plants and waste heat from waste incineration and industrial processing.
Waste heat from data centres in Denmark can also be used for district heating purposes.
For example, the Facebook data centre in Odense is going to heat almost 7000 homes in the city.
Land and permits
Denmark is approximately the same size as the Netherlands, but only has a third of the population density.
This means land prices are lower in Denmark than in many other European countries.
In regards to building permits, these are usually issued within six weeks from application for zoned areas, which is the fastest processing time in Europe.
Moreover, potential objections do not delay the building process.
Traditionally, data centres in Europe have been located around the large metropolitans.
However, the fast growing demand for data centre capacity means that a number of bottleneck issues, mainly lack of power and land, have started to occur in these areas.
Consequently, data centre operators are now looking to the Nordics in the search for green power and land.
In this context, Denmark is ideally located, providing both the low latency, digital connectivity and green power required.
Source: Data Economy