Scotland has a strong historical record in seeking out and supporting data centre investment. The Green Datacentres and Digital Connectivity: Vision and Action plan[1] is already four years old.
However, time has not dampened enthusiasm. The renewed interest in data centre investment that has followed encouraging comments from Chancellor of the Exchequer, Rachel Reeves[2], has spread across the UK.
In this context, recent comments from the CBRE that Scotland ‘is on the long list’ of tertiary investment considerations[3], risk being seen as a case of damning with the faintest of praise.
Northern Lights (and cooling…)
The assorted reasons for data centre investment in Scotland are well documented. Massive renewable energy capabilities include a new 30MW tidal energy project in Orkney waters[4] alongside the UK's largest onshore windfarm[5].
Elsewhere, much has been made of Scotland’s DC-friendly, temperate climate. The promise is one of lower energy consumption and operational costs because of less air conditioning, alongside a reduced risk of overheating and equipment failure.
This is backed by the Scottish skills base already transitioning to sustainability leadership. And – based on experience in the supercomputing sector – the technology talent available in Scotland is second to none.
Financially, both land and labour are competitively priced and backed by a government keen to encourage inward investment.
But there are other, more future-orientated reasons to energise Scotland’s position in the data centre location rankings. Not least among them is that the eastern Scottish coast is a natural landing point for Nordics AI data and traffic.
A Nordic Connection
Scotland is ideally placed to function as the gateway between the Nordics and the UK. Analysis from the likes of S&P has already identified that not only does the Nordics have an incredibly attractive profile for data centre development but that their growth is set to ‘spur regional cross-border consolidation’. Driving that consolidation is a data centre market that (between 2020 and 2023) has seen over $1.3bn in disclosed investment.
In 2023, the UK exported goods and services worth £30.6 billion to Scandinavia alone - making it the UK’s 8th biggest export market, with substantial opportunities to improve this number[6].
November 2023 saw the Swedish Chamber of Commerce, and the Office of Science and Innovation at the Embassy of Sweden, host representatives from Swedish universities and authorities to explore the AI-landscape in the United Kingdom. In 2022 there was a similar Norwegian meeting, and the UK and Sweden signed a bilateral agreement to further cooperation, including innovation and technology[7].
Scotland is not only an ideal landing pad for this activity, it also has much to learn from the Nordics. In the past five years, Facebook, Google, Amazon Web Services and Apple have made major investments in Nordic data centres. That is a very convincing model to copy.
Both regions market themselves to the DC market based on renewable energy, cooler climates, and an incredibly skilled workforce. Low latency, high-speed data connectivity between the two is robust with multiple subsea cables between not only Scotland but the North of England. As a particular opportunity, Scotland may even be able to replicate the long-term power agreements (PPAs) that DC operators have realised in Iceland[8].
The opportunity for Scotland has never been so ripe. Scotland must present itself with confidence and assertion to realise this potential and part of that will be to look to the North East and partner with the leaders in the Nordic AI boom.
[1] See Green datacentres and digital connectivity: vision and action plan for Scotland - gov.scot (www.gov.scot) first published March 2021.
[2] See Data center companies confirmed for UK International Investment Summit - DCD (datacenterdynamics.com)
[3] See Scotland "increasingly attractive" for co-location datacentres as Europe's big players face capacity issues, says expert | FutureScot
[4] See Orbital Marine Power unveils new 30MW tidal energy project in Orkney waters - Orbital Marine
[5] See Whitelee wind farm in Scotland - Iberdrola
[6] See Why UK Companies Should Expand to Scandinavia (internationaltradehub.co.uk)
[7] See _Strategic_Partnership_UK_SE.pdf (publishing.service.gov.uk)
[8] See AtNorth signs PPA for newly-launched Icelandic data center - DCD (datacenterdynamics.com)