Those pesky Swedes have outsmarted us. Again.
First, they made billions of dollars making stylish furniture out of the same spindly northern trees that our forestry industry loses money making into two-by-fours and toilet paper.
Then they got into renewable energy early, doing stuff like heating their buildings and running their vehicles with landfill gas while we pay big bucks to Big Oil.
And now they’ve used their cold climate to lure Facebook to open a server farm in Sweden. The massive rows of servers that support the internet generate a lot of waste heat, and the Swedes have convinced the California-based internet titan that it can save a lot of money on air conditioning by putting a server farm North of 60.
And this isn’t in Stockholm, but in Lulea. That’s even farther north than Dawson City.
Don’t think that a Facebook server farm is just a few computers in a basement. According to The Local, an English language news outlet in Sweden, the data centre will have three buildings with about 900,000 square feet in total space. These servers are power hogs and will need about 120 megawatts of power, roughly the Yukon’s entire capacity.
Three hundred jobs will come to Lulea in the first phase. There is also the possibility that some of the surplus server heat will be used to warm nearby Swedish homes and buildings.
How did the Swedes do all this? Cleverly, they pulled together three things.
The first was abundant, cheap and climate-friendly hydropower. Server farms use a truly prodigious amount of electricity and northern Sweden has lots of hydropower.
Secondly, Sweden has invested heavily in internet infrastructure. Unlike Whitehorse, which is at the end of a long and vulnerable strand of fibre (much to the apparent delight of backhoe operators in Fort Nelson), Lulea has multiple fibre-optic connections. Friends of the Lulea Data Centre – it has a Facebook page of course – point out that the Lulea University of Technology is right across the street. Not bad for a town only about twice as big as Whitehorse.
The third thing is Sweden’s economic development agency. Invest Sweden has been working on the Arctic server farm concept with the Lulea Business Agency for several years, touring American internet companies like Google, Amazon, Ebay and Apple to pitch the concept.
The Swedish success underlines the potential for the Yukon. We have some advantages over Sweden, namely colder temperatures and lower taxes. We also speak English, the international language of business. Judging from how the Swedish exchange student in my English 12 class at FH Collins got higher marks than most Yukoners in the class, however, this may not be as big an advantage as we think.
We even have the Yukon Department of Economic Development and Cannor, the newly established federal agency for economic development in the North.
However, we lack two fundamental assets the Swedes have been making long-term investments in: power and internet backbone.
Yukon Energy has been telling Yukoners that our surplus of cheap hydropower is shrinking away since their 20-Year Resource Plan was published in 2006. While Mayo B and some other smaller projects have been completed, we essentially do not have a set of electricity projects coming on line over the next few years to meet our longer-term needs.
Yukon Energy’s handy energy consumption website shows that we needed to burn diesel in each of the last 12 months, including the summer. We don’t have the spare capacity to support a data centre, even one a tenth the size of Facebook’s.
And although it has been talked about, to my knowledge neither our phone company nor our government have announced a plan to build a second fibre-optic connection to the Outside. Without at least two routes, no serious web company would put operations here.
Data centres are just one idea. But plentiful, cheap power and fast, reliable internet connectivity are attractive assets for many businesses. Our economic development efforts will face some tough sledding in many industries until we get with the Swedish program and start making some long-term investments in power and the internet.
In the meantime, you can be reassured that every time you click on Facebook, you are helping create jobs and heat houses in Lulea.
Keith Halliday is a Yukon economist and author of the Aurore of the Yukon series of historical children’s adventure novels.