Iceland: two data centres move forward, at Ölfus (30 MW in phase one) and Bakki (100 MW), subject to power supply

Two data centre projects have taken new steps in Iceland in recent days, both conditional on electricity supply. The municipal council of Ölfus in the south-west of the country on Thursday unanimously approved a letter of intent with Glacier Grid ehf. on a conditional, temporary plot reservation in the Sandur I industrial area north of the Suðurstrandarvegur road, the daily Morgunblaðið reported on mbl.is on Monday.

The Ölfus figures. The project has three phases. According to the minutes quoted by mbl.is, the first phase would require 30 MW and a six-hectare plot, out of around 16 hectares in total. The reservation is valid for 12 months from signing, and the company estimates 30–50 permanent jobs and annual revenue for the municipality of ISK 50–130 million from property tax and ground rent. The exact location will be set later.

Bakki in the north. At Bakki near Húsavík, Norðurþing municipality’s planning committee on 3 November recommended allocating an 8.2-hectare plot to EyrieDC ehf. and authorised 41 exploratory boreholes in November. The conditions are that the detailed plan, open for public comment until 7 December, takes effect, and that agreements for the purchase and transmission of electricity are signed. In September Norðurþing presented the project as a 100 MW data centre for a single customer, with investment of about ISK 120 billion, construction from 2027 and operation from 2028.

Context. According to Iceland Review, which reported on Bakki on Sunday, computer equipment for data centres accounted for about a third of Iceland’s goods imports in October. In Norway, grid operator Statnett announced on Monday that it will for now allocate no new capacity to data centres, Vísir reported, noting that such projects have also faced opposition in Iceland over noise, land use and power demand.

What comes next. The final allocation of the plots, at both Ölfus and Bakki, will be decided separately, and neither decision is a building permit.

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