As traditional hotspots for data center locations become saturated, operators are moving further afield in search of the next digital hub. Finland, with its advanced telecom infrastructure, mature sustainability programs, and an abundance of natural cooling is taking its place on the world stage offering opportunities for data center construction with a potential for efficient, cost-effective facilities. Datacenter Dynamics spoke to industry stalwart Eero Lindqvist of the Finnish Data Center Association (FDCA) as it prepares to meet for its annual conference.

We start with the million euro questions – Why Finland, and why now?

“Climate change is the big picture,” he tells us. “It's the main driver affecting where future data centers will be located, particularly the availability of affordable and renewable electricity. Another thing that will be important is the availability of water resources because stress on the water supply seems to be getting worse, especially in Southern and Central Europe. In that sense, Finland and the Nordics are in a good position and ready for demand from the global market. We have good sites, we have renewable power and it’s growing fast.”

In the past few years, Finland has moved to be completely self-sufficient in terms of its electricity demand, triggered by several global factors. But rather than stop there, it continues to expand its production of cheap green energy to fuel its expansion in the global market.

Lindqvist explains how: “A year or two ago, we were importing quite a lot of electricity from Sweden and Russia. That’s changed – I checked and at the moment we have about 6,500 megawatts of wind power in production. By the end of this year, it will be 7,200 megawatts, and there is a potential 50,000 megawatts from plants in various states of construction, so in three to five years, we are going to have a good surplus of renewable cheap electricity.”

But how does that compare to other countries in the Nordic region?

“We have one major advantage over Sweden and Norway, for example, and that's our national grid. It's the most reliable and robust in the world with no bottlenecks. You can buy electricity across the country at the same price.

“In Sweden and Norway, there are four different price areas because they have capacity limitations in transferring cheap electricity from the north to the south, where the consumption is largest. It’s simply too expensive to build big enough pipes to transfer all that electricity. That means the southern part of the Nordics is closer to Central Europe pricing while the northern parts are cheaper. Instead, in Finland, we offer that low price point nationwide.”

The Nordics in general, have been leading the pack on sustainable energy, and today the vast majority of our electricity is fully renewable - Eero Lindqvist, FDCA – Getty Images

Cheap electricity is one thing, but the biggest demand from across the world right now is for green electricity. As Lindqvist explains, Finland is in the fortunate position to be able to offer both.

“The Nordics in general, have been leading the pack on sustainable energy, and today the vast majority of our electricity is fully renewable, with some nuclear. But even then, nuclear is good because there are no carbon emissions. But there is very little fossil fuel-based electricity production such as that continuing in Central Europe, Poland, and even Great Britain.”

Another key advantage of cheaper energy is cheaper cooling. But, we assume, the capacity for this is greater the further you go toward the Arctic Circle, which then presents its own challenges. In fact, we’re told that nothing could be further from the truth and there are significant benefits to staying in the more populous, southern parts of the country.

“You don't have to go to Lapland or the far north, because even the southern part of Finland can bring you over 8,000 hours of free cooling per year, and in the far north, maybe hundreds more. Up north, fiber connectivity is not as good, while variation in weather conditions tends to be larger.

“An even better opportunity is that within residential areas you can sell your excess heat. Instead of just pure cooling, you can sell the heat to the local energy company and earn extra revenue. There are at least half a dozen data centers in Finland already doing that. Better still, since 1st July 2022, data centers reselling waste heat to district heating have a lower rate of electricity tax – a deduction of two cents per kilowatt hour, which is quite substantial.”

On top of the abundance of power, Finland also boasts one of the highest proportions of university graduates per capita in the world, making it a perfect location for beating the global skills shortage. We ask Lindqvist how Finland has been able to overcome odds that have been the bane of every sector in recent years.

He tells us, “We have actively tried to increase the number of people who get into the higher education system, which includes universities of applied sciences where you get more hands-on training and gain practical skills usually run in conjunction with local businesses. Universities can send students to work there for on-the-job training as part of the course.”

All of this sounds amazing, but how does that apply to data centers, which require a very particular skill set?

“We try to educate people in areas where there is the most demand, to ensure that they will get to work when they graduate. We are such a small nation that we have to do so in order to compete on the global stage. FDCA, as an association, has worked together with some universities of applied sciences which provide courses on data center operation.”

All of this suggests that Finland is offering itself up as an alternative to the FLAP-D nations which have come to dominate the data center industry over the past decade. We ask Lindqvist if he believes that FLAP-D, which is already showing signs of exceeding capacity, has had its day.

“FLAP-D will still be a major, important market for many years to come but we are seeing the boundaries for growth in that market, with limitations to find suitable plots and power limitations. There can also be strong, public opposition to building new data centers in certain areas.

“I think that's why hyperscalers are looking for alternative places to build new capacity and we have noticed that the Nordics is one area on the radar. I've also seen quite a few new projects starting in Southern Europe, for example, Spain and Portugal. It’s less that FLAP-D is over, more that the market is becoming more multifaceted and Finland has an important part to play.”

Does this, then, mark the start of a transformation in the form of Finland’s industrial output?

“Finland has traditionally had a lot of heavy industry – paper mills and similar, but that type of industry is shrinking. That makes room for new innovations such as data centers. That's why I think that we are in a good position to cover the demand. It’s a positive situation with no drawbacks.”

It’s an active process too, with huge investments in making sure that the country's infrastructure is ready to meet the demands of the coming years, always with sustainability at its heart.

“Finland has set out to be carbon neutral by 2035. As we’re driving towards that, it means that the energy system has to be renewed, so we are heavily working on electrification of these industries. The government plan is to produce 10 percent of the green hydrogen in the EU. Our current annual electricity consumption is around 85 terawatt hours, and if we want to produce that 10 percent, it means that electricity consumption will increase by 55 terawatt hours.”

Throughout our chat, Lindqvist has spoken passionately about Finland’s green credentials. We’re curious, therefore, why there remains so much traditional fossil fuel in Finland’s energy mix.

“It's really winding down. It's mostly the metal industry that still uses coal, but they have plans to replace that coal with hydrogen, which is a huge initiative. Forestry and Bioindustries are not using any fossil fuels. The energy companies are still using some, but that will disappear, with coal replaced by biomass, green electricity, and heat pumps, within a few years. We still have some consumption of natural gas – not that much, but some, while marine automotive sectors are still using fuel-based hydrocarbons – that's where I think that we still need to improve.”

Earlier we talked about the idea of returning excess heat from industrial processes to be used elsewhere. Can you give us some examples of how this is being achieved?

“There are some interesting initiatives and developments. For example, in heating systems. Usually, when these systems have such an abundance of, for example, wind power, it's really cheap. It can be even negative so you are actually paid for consuming electricity. The question we face now is, how can you store that and use it later when electricity is more expensive?

Lindqvist gives one example of just how this is happening:

“One company in central Finland has built a battery in a big silo filled with sand. They heat that, with electricity, up to around 600 degrees. Then, later on, they can discharge that heat to the district heating system. Essentially, they have created a heat battery.

“I think we are going to see similar types of things where we somehow capture cheap electricity on windy days and store it to use on days when there's less renewable production. Other energy companies have been doing a similar thing with hot water.”

It’s important to remember that Finland is no newcomer to the technology sector and has a proven track record of keeping a close guard on sensitive data, both for its citizens and its businesses. We ask what has driven the country to invest so much in data protection. The answer lies, at least in part, in world events.

“The major motivation for that has been our “Eastern Neighbor”. We want to keep our secrets secret, which means having a well-thought-out and architected system to handle sensitive data – how to store it, and who can access it – so for as long as I can remember we have had robust national legislation and regulation.

“We also tend not to trust buying security hardware from another country, even if seen as a friendly ally, because if we are in a crisis situation, we need to know how we can replace or fix it if it gets broken. Instead, we have built an entire industry around that, both cryptographic and of course, telecommunication.”

Data integrity is an obviously attractive trait to potential investors, while another comes from the fact that Finland has a reputation for political integrity too, coming second in the Transparency International Corruption Perception Index in 2022. Lindqvist explains that smaller nations, such as his, have a higher likelihood of sharing fundamental values of trust and cooperation.

“As a small nation, you tend to know the people you are dealing with, and that makes it easier to build trust. Even though we have right-wing and left-wing politics, they have the same basic values and a similar view of the world. It’s a result of the long, complex history that we have had, so it’s built into the genes, I guess. If you ever lose a wallet, the best place to lose it is in Finland because you’ll probably get it back. A survey I read found that in Helsinki about 70 percent of lost wallets are returned to the owner, the highest proportion of any world city.”

Of course, as the birthplace of Nokia, it’s impossible to talk about Finland without mentioning its long history in telecommunications. It probably isn’t surprising to learn that Finland has an advanced telecoms infrastructure, which brings even more appeal for potential data center investors. Its wireless network is comprehensive, with one of the most extensive 5G networks outside Asia and, as a result, its citizens are among the highest users of mobile data in the world. Lindqvist tells us a little more about what that means for Finns on a day-to-day basis.

“We have unlimited data plans in our mobile subscription. You pay a flat monthly fee and you can use as much data as you want. Last year, the average mobile data consumption per Finnish citizen was something like 66 gigabytes per month and it's growing every year. That means the network has to be in good shape to handle it. In fact, the capacity of 4G networks was not sufficient to handle the data transfer, which is why mobile operators have been very quick to build 5G networks to cope with the growing volumes, and operators are beginning to shut down their 3G networks.”

Wired data transfer over fiber-based networks is similarly mature and rollout has expanded at a colossal rate.

“Our local operators have already removed copper cables. It's fiber-only and that comes to many as a shock. Five years ago, you probably couldn't get a fiber connection to your home, even in residential areas, but nowadays, companies are building pure dark fiber networks, and that industry is booming. That said, many people prefer to get fixed wireless access (residential 5G) because you can get the same, hundred-megabit speeds without a fixed-line.”

Our local operators have already removed copper cables. It's fiber-only and that comes to many as a shock - Eero Lindqvist, FDCA – Getty Images

There’s no doubt that Lindqvist makes a compelling case for locating data centers in Finland. The next question is whether there are specific incentives offered for moving operations to the country. He tells us:

“It’s less about specific benefits or particular subsidies to locate in Finland, but because of the way the country is set up, there are no barriers either. You can be sure that if you can make a solid business case to locate here, you won't get any nasty surprises. Of course, there are many “carrots”, with the lower electricity tax being a good example, and there are some incentives at a local level, depending on the area where you are building.

“That's something that you should investigate when you make your site selection. Land pricing is one example here. If a municipality owns the land, to encourage a company to locate there, it may even sell the plot for a euro, or at least for a very competitive price. Talk with the local authorities and discuss what is available and you may find some attractive benefits.”

So to summarize, what does Lindqvist see as the ambitions for Finland that a new investor will be buying into?

“There are two named goals. One is the green transition. Finland wants to be a forerunner in that, and that's why we have this aggressive target to become carbon neutral. We see developing and adopting green technologies as a way to open up new markets for us. The other is to build a digital society because that also brings savings in our carbon footprint.

“Doing things on a digital platform means you don't have to travel or mail papers, and that kind of thing. It also means society runs more smoothly because data is instantly available, and up to date. Those are the two areas where we want to develop our technology, our country, and our competence. I think you can see that already in the way that we plan education.”

Finally, we’re speaking to you on the eve of your annual conference. Tell us a little bit about what delegates can expect.

“We have an excellent program. We’ll be talking about hot topics of the moment, and we have some brilliant presenters there. You get to meet our members and partners, so it's a great place for networking. The Finnish Data Center Association was founded in 2014 so next year we reach our 10th birthday.

“Since the early days, we have had a yearly fall meeting with our members and partners to discuss and learn new things, share information, and get to know each other. Over the past decade, that has turned into a huge event and has been growing steadily. There are something like 250 to 300 attendees and about 20 partners, and every year we attract more international attendees.

“We try to keep it very much focused on the content – it’s not supposed to be a sales event, though, of course, that still happens, but it's certainly not the main focus. It's about sharing information and ideas, making connections, and having fun together. This year we have a few presentations about quantum computing.”

Finland and quantum computing is a combination that speaks to the country’s enormous ambitions. As we wrap up, we can’t resist enquiring further and the answer is surprising.

“Actually, Finland is currently the only country in Europe that makes quantum chips. IQM – a Finnish startup is building its own quantum chips. The only other countries making quantum chips are the US and China,” Lindqvist explains, before adding, “Yesterday, I visited IQM’s factory and saw several quantum computers. I think that by the end of this decade, we are going to see quantum computers in regular data centers alongside classical computers.”

There’s little doubt, then, that Finland ticks a lot of boxes for data center operators looking for options to locate somewhere that’s cost-effective, well-connected, climate-conscious, secure, and forward-looking, with a knowledge pool that beats the global skills shortage. As traditional data center hotspots reach beyond their capacity, it represents an example of exactly the sort of country that could represent the future of data centers.

To find out more, contact the Finnish Data Center Association on [email protected] or visit