Danish power demand could jump by 10% on Facebook data centre plans

13 October 2016 11:26 Source:ICIS

Danish wholesale electricity prices are likely to be lifted by a surge in demand if social media giant Facebook decides to build new data centres near the Danish city of Odense, analysts have said.

The California-based technology company is planning to build two data centres measuring 184,000 square metres south of Odense, Denmark’s third largest city, according to a report from Danish news site fyens.dk.

A centre of this size could push up total Danish power demand by a whopping 10%, according to the Copenhagen-based think tank Concito.

This is likely to increase power prices moderately in Denmark, said Anders Kofoed-Wiuff, partner at the Copenhagen-based energy analysis firm Ea Energianalyse, who is currently studying the price effects of data centres.

Kofoed-Wiuff said the impact could be moderate as Denmark is well connected with Nordic countries and Germany and further interconnectors are being planned to connect to the Netherlands and the UK.

The increased power demand may accelerate more investments in new wind production or combined heat and power (CHP) plants using biofuels, as well as energy efficiency policies, said power analyst Olav Johan Botnen at MK Online, a Norwegian energy analyst company.

“If this [increased production] happens, Nordic power prices won’t change much. [But] in the absence of these [production] changes, Nordic power prices may come up €0.50/MWh and Danish prices could increase by €1.00/MWh,” he said.

Concito’s estimation of Facebook’s demand is based on consumption figures from a similar data centre that will be built by US software firm Apple near the city Viborg on the Danish peninsula Jutland. This centre, which Apple announced it would build in February 2015 to be online by 2023, will measure 166,000 square metres and is expected to consume 2.2TWh/year, according to the Danish Energy Agency.

In comparison, Facebook’s buildings will be roughly 60% of Apple’s centre, yielding an estimated consumption of 3.5TWh/year, said Concito’s research director Torben Chrintz.

In 2015, Denmark’s electricity consumption reached 33.6TWh/year, so an extra 3.5TWh/year would lead to a rise of just over 10% in power demand.

Technology companies are increasingly setting up computer centres in Nordic countries to profit from the region’s cheap power prices.

Facebook built a data centre in northern Sweden in 2013, which is run by renewable power from Swedish utility Vattenfall. Vattenfall said previously that data centres with a power need of around 6GW will be built around Europe in the next 10 years and that one third of these could be located in the Nordic region.

In Denmark, data centres could account for as much as 13% of total power demand in 2025, recent figures from the Danish TSO showed.

Danish power demand peaked in 2008 at 36.1TWh, but has been falling since. Stronger demand from data centres would reverse this trend.

Facebook’s plans to build data centres in Denmark have not been confirmed by the company itself. A spokeswoman for the municipality of Odense would not comment on the plans. herman.moestue@icis.com

By Herman Moestue