PITEÅ, SWEDEN — Anders Berglund was the hot dog king of Northern Sweden. Beginning with a food truck in college, he and his partner built a chain of five popular fast-food restaurants over two decades. But last year, the burly 51-year-old put down the greasy spoon for something the world craves even more than sausages and burgers: an endless stream of internet data.
Berglund is among Sweden’s new breed of data pioneers, entrepreneurs who are transforming the business of storing the world’s ever-growing stockpile of digital content and services — everything from Facebook likes and Netflix movies, to algorithms that find the cheapest, quickest flights on Kayak or Expedia.
And as the world’s thirst for data increases, so does the cost of storing and processing it. Data traffic worldwide has already surpassed 1 zettabyte (or roughly the equivalent of 36 million years of HD videos) and is expected to triple by 2021. In the U.S. alone, that means data center power consumption could grow to 140 billion kilowatt-hours annually by 2020, requiring the equivalent annual output of 17 new power plants. American businesses are already spending some $13 billion annually in electricity bills to store their data.
But Berglund and others in Sweden — and across Scandinavia — are relying on the region’s cold climate and growing use of renewable energy to prove that data storage doesn’t have to be such an economic drain and environmental burden. In Sweden, data centers run on hydro and wind power. And heat from their computer servers even warms nearby towns.“Data centers need a lot of power,” Berglund says. “We have the best power network here, and it’s green energy at very low cost.”
Starting small, Berglund began building his computing business Fortlax in 2003, while still running his restaurants. He began inside an old bank in Piteå, a small coastal city in the Swedish archipelago, as well as at a nearby abandoned army surveillance facility. Inside the former bank’s money-counting facility, he runs a 4.5 megawatt (Mw) center, which consumes enough electricity to run about 1,800 homes. Faint blue lights illuminate racks of black boxes that contain processing software — the programs that respond to internet queries and instantaneously send his clients’ data to someone’s iPhone or laptop on the other side of the globe.
He keeps the rooms dark — you need an iPhone flashlight to read the numbers on each machine. Exhaust from the back of each computer is pulled into an overhead ventilation system, keeping the room at a constant 65 degrees. Berglund is working on a plan to pipe heat from his centers directly to homes in Piteå. That deal with the utility would earn him about $150,000 a year, or about a quarter of his data centers’ annual electricity bill. Additionally, the BMW contract has kept him too busy to continue running his fast-food business. “BMW sees a tsunami coming with data,” Berglund says in an interview in his office, “and they can’t put it all in Germany.”
Sweden has approximately 155 data centers worth about $1.6 billion, serving clients such as NASDAQ and Amazon Web Services, according to a 2016 report by the firm Boston Consulting Group. Facebook built its first data center outside the U.S. in Sweden in 2013. The tech giant added a second facility Luleå. Each cover the area of 17 hockey rinks and use almost 40 percent less power than traditional data facilities.
Many of the data warehouses are already warming Swedish homes. In fact, heat from data centers now accounts for 10 percent of Stockholm’s municipal system. The warm air is piped into the city’s system — providing both heat and hot water — through 1,600 miles of underground pipes. The city will likely rely even more on data centers once it closes a coal-fired power plant in 2020, according to Erik Ryland, head of open district heating at the utility Fortum. “Three percent of all the power in the world is consumed by data centers, and they are wasting all their heat.”
The region’s environmental commitment has the attention of U.S. tech companies. Google is operating in Finland; Apple is in Denmark; Amazon Web Services is outside Stockholm. One key reason Sweden’s data managers are turning green is that Europe imposed greenhouse gas limits by 2020, and the Swedish government approved a law this past summer that requires a net carbon-free economy by 2045.
It’s a different picture in the U.S. Much of America’s data processing horsepower is housed in Ashburn, Virginia, near Dulles Airport. The area became the biggest host of U.S. data centers because it offers low taxes, land, electricity, and fiber connections. Only about 6 percent of the power to run those centers comes from renewable sources, the rest comes from fossil fuels or nuclear power. The amount of natural resources going to power data delivery will increase sharply in the next three years. In 2013, U.S. data centers consumed an estimated 91 billion kilowatt-hours of electricity, according to a report by the Natural Resources Defense Council. That’s the equivalent annual output of 34 large (500-megawatt) coal-fired power plants — enough electricity to power all the households in New York City twice over for a year.
But American data center operators are heading to the far north, too. Tate Cantrell worked at setting up data centers in Northern Virginia for a decade. But in 2012, he packed up and set up his own data center company, Verne Global, in Iceland. Now, he’s drawing both U.S. and European firms who like the idea of nearly-free cooling combined with low-cost renewable electricity.
Even Fairbanks, Alaska, is too hot in the summer, says Cantrell, an Alaska native. In Iceland, “we can offer a lower-cost solution but also save money and be sustainable. That message has resonated.”
That’s why the cybersecurity firm ThreatMetrix, based in San Jose, California, decided to move 20 percent of its off-site data storage to Verne Global’s Iceland facility. The company liked the proximity to European customers and the idea of using energy generated from the country’s hydropower dams, geothermal springs, and wind turbines. “At a traditional data center, you feel a sense of heat and energy being consumed and wasted,” says Phil Steffora, chief security officer at ThreatMetrix. “What you use [in Iceland] is turning that upside down.”