Fire and ice

Now, President Ólafur Ragnar Grímsson says the country is spearheading an impressive turnaround by focusing on a sustainable, low-carbon future – not by utilizing conventional Western models for economic recovery. That meant favoring currency controls and protection of the welfare system, he says, rather than orthodox austerity measures and high-priced bailouts (which realistically were not feasible anyhow).

“We have seen the bottom and we are recovering quite fast,” says Thordur Hilmarsson, director of Invest in Iceland, a government-supported organization that invited Sustainable Industries and journalists from eight other U.S. and U.K. industry trade publications to Iceland in early March for site visits and interviews.

Tourism has been buoyed by a highly successful promotional campaign with IcelandAir, and the country has remained stabile in other core industries such as fish farming, biotech (not without its controversy), ferrosilicon production, and perhaps most prominently, aluminum smelting. Rio Tinto Alacan and Alcoa both maintain a major presence here. The former recently modernized its kilometer-long smelting facility just south of Reykjavik when it was shutting down smelters in other markets, according to Grímsson, and the latter attempted to build a second 400-500 megawatt smelter but was rebuffed by Icelandic leaders intent on diversifying the economy.

While it won’t prove a major long-term boon to Iceland’s 7 percent unemployment rate, one such sector of interest is data centers. Invest in Iceland says within a decade it wants to make Iceland one of the 10 largest concentrations of data centers in Europe, which owns of one-third of the global market – and sucks up about 5 percent of Europe’s energy. While the United States remains the global leader in data centers, its “greenest” data centers are located in states as Arizona, where a large amount of energy and water are required to run and cool them.

Iceland currently maintains two major data center facilities on the island: Verne Global and Advania, which because of their remoteness serve the needs of customers (including BMW at the former and John Deere at the latter) seeking redundancy and a reliable energy grid.

Reykjavik Energy, a public-owned energy company that bills itself as the largest geothermal utility company in the world, is finalizing plans to secure a 50 to 70 acre site outside of Reykjavik in the hope of luring a big-name data center operator that will incentivize others to follow suit. Invest in Iceland is targeting tech giants in Silicon Valley, among other global markets, who are interested in enjoying “free” ambient cooling (no chillers and compressors needed in Iceland) and subsequent lower Power Usage Effectiveness (PUE), a blunt industry measurement created by the Green Grid.