Why Facebook went to northern Sweden

Facebook’s data centre in Luleå, northern Sweden, claims to be the greenest on the planet. It’s already created a local boom, but could it have wider benefits?

(First published in N by Norwegian magazine, April 2015)

As a rule, feel-good stories aren’t meant to come from American mega-corporations worth upwards of US$40 billion (NOK323bn). But try telling that to Luleå, the coastal city in northern Sweden that’s been sprinkled with Facebook’s stardust – and hasn’t stopped smiling since.

Since 2011, Luleå has been home to Facebook’s only data centre outside the US – it’s the largest in Europe and claims to be the greenest on the planet. The first of three server buildings – the next two are due to be completed over the next few years – is a 28,000m2 facility with tens of thousands of blinking servers packed together in long aisles. It’s powered by hydroelectricity from the Luleå River, and processes 10 petabytes of information a day, or nine quadrillion bytes, which translates as an awful lot of holiday snaps and status updates. If you’re one of 282 million Europeans who use Facebook, all the information you upload to Facebook goes through Luleå. It’s fair to say that it’s been a major coup for the city.

“Facebook coming was so huge and so unlikely,” says Matz Engman, the CEO of Näringsliv, an umbrella group that links Luleå businesses and the local municipality (the former own 51 per cent, the latter 49 per cent). “Since it happened, everything seems possible. We have the happiest and proudest citizens in Sweden, and it feels like a new era.”

Data centres for Bitcoin miners KnC Miner and British hydropower company Hydro 66 have followed Facebook to an area that now calls itself the Node Pole, and is positioning itself as a world leader in environmentally friendly data centres.

It’s had a knock-on effect, too. The Luleå Science Park has seen more than 25 per cent growth since Facebook came to town, while the number of applications to study at the city’s technology university has more than doubled in the past five years. The population growth rate has also doubled, house prices are the fastest-growing in Sweden, and two new five-star hotels have opened in the past few years, with more in the pipeline.

So what did they do right? In 2008, Engman became CEO of Näringsliv, with a mission to build the area’s ICT sector, which was growing fast to meet the needs of the area’s traditional mining, raw materials, forestry and energy sectors. At the same time, he saw that data centres were not only growing fast in the US to keep up with frantic growth in the tech industry, but that the data centre industry was overtaking aviation as the world’s biggest emitter of carbon.

There are now more than three million data centres in the US alone, using more than 100 billion kilowatts of energy, and more than two per cent of the planet’s electricity use now goes  towards powering the centres that store our digital information. A recent Time article noted that the iPhone in your pocket will consume more electricity than the fridge cooling your beer.

“I saw that growth, and the environmental concerns, and it was a light-bulb moment, if you excuse the pun,” says Engman. “I was thinking: we have very cheap, stable, 100 per cent renewable energy here, good internet connectivity, good infrastructure, and a cold climate to help keep cooling costs down. It was a potential win for any big data company – the chance to cut down costs and emissions at the same time. I just thought: we have to go to the US and tell them.”

So Engman created a whole new brand – the Node Pole – and embarked on a Stateside charm offensive, going to 14 large companies selling Brand Luleå but also Brand Sweden as an alternative site for a data centre. Facebook had been wanting to build a new data centre for users outside America, and Engman’s pitch was a compelling one.

“They were extremely tough negotiators,” he says, “but as soon as you sat down with them, they were one of the best companies I’ve ever worked with. There’s a very flat structure, and you don’t have inaccessible bosses cloistered away – I message Sheryl Sandberg [Facebook COO] on Facebook the same way I would anyone else, and she replies the same as anyone else.”

In a year from March 2010 to March 2011, Facebook whittled 40 possible locations down to two – Luleå and Östersund – before finally giving Luleå the nod after lengthy negotiations with Engman and his team. “I think the clincher for us was the fact that we’re a very business-friendly city, with a strong IT sector and a lot of local know-how already,” says Engman. “If our group had been run entirely by the municipality, rather than a lot of savvy private business owners, we wouldn’t have won this contract.”

But the main reasons were Luleå’s natural advantages, from its river providing limitless and cheap hydropower to the coldest climate in Sweden providing free natural cooling. That, plus a cutting-edge design to naturally heat and cool the warehouse, meant that the plant could be 70 per cent less energy intensive than the average data centre.

Facebook has also made its design open-source, meaning that other data centres can copy it. “That way, it’s become about more than just us,” says Engman. “Hopefully we’ve done a service to the world.”
The Facebook- Luleå partnership also helped a mini-boom in data centres across Scandinavia. Sweden is now ranked the world’s third-best location for a data centre, behind the US and UK, and other tech giants have followed Facebook to Scandinavia. Google – who have made major investments in wind power – have spent more than $1 billion in a facility in Hamina, Finland, while Apple recently announced it would build a state-of-the-art facility in Jutland, Denmark.

The tech giants, it seems, are serious about improving their green credentials. According to Annika Jacobson, programme manager for Greenpeace Sweden: “For a long time, it’s been really important to lobby the big tech giants like Facebook, Google and Apple, because they’re such big energy users – their energy usage is comparable to a country like the UK.

“One data centre in Luleå doesn’t solve a huge global issue, but it’s a step in the right direction, and it shows that Facebook is listening to the concerns that we and others have.”

But the big winner seems to be Luleå itself. According to Birgitta Bergvall-Kåreborn, the pro vice-chancellor at Luleå University of Technology, “A lot of perceived negatives about this part of Sweden have become positives – the cold, the relative remoteness. As a community, we’ve started to see what’s possible, and it’s created a positive spiral – we’re looking at ourselves differently.”

Bergvall-Kåreborn, who was part of the Facebook pitch, has seen a boom in applications to study in Luleå, which now has 19,000 students in its four campuses, including a space science campus at Kiruna, a music and media department at Piteå, and a wood tech and video game engineering campus at Skellefteå.

“Facebook helped put a spotlight on what we have up here. The university was set up [in 1971] to secure competence in the region and solve real-world problems, and that’s still the case, even if things have evolved from predominantly teaching mechanical engineers. It’s easy to get things done here, and there’s a lot of support from local businesses and the municipality. We’ve grown as an IT destination, and become a hub for testing, from digital services and networks to cars, trains and even bio energy. With Facebook, they knew that we already had a certain know-how in everything from cooling mechanics to data centre architecture.”

Unprompted, she then says the same thing that Engman said. “We’ve realised that anything is possible.” As a legacy of Facebook coming, it’s not a bad one.

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