Skanska to prep hyperscale data centre construction in Norway
09 February 2024
The Sweden-based construction company will do preliminary work on a new data centre facility for WS Computing AS in Gromstul in Skien, Norway
The contract is worth SEK 1.1 billion (US$105 million) and is for introductory groundwork and foundation construction for a hyperscale data centre.
‘Hyperscale’ refers to large facilities that can house more servers and machines than an average data centre.
Work will include building new access roads along with infrastructure and site development. Construction will start immediately and is expected to finish in the fourth quarter of 2025.
Data centre builds on the rise
There’s been a flurry of announcements for new data centre projects globally, and according to research by Arizton Advisory & Intelligence, more are expected through the next four years.
In their publication Europe Data Center Construction Market - Industry Outlook & Forecast 2023-2028, Arizton valued the European data centre construction market at US$10.5 billion and expect it to grow to $14.2 billion by 2028. That’s a compound annual growth rate (CAGR) of 5.23%.
“The region is experiencing rapid growth in technology and innovation, resulting in significant investments in the market,” stated the report. “This is driven by factors such as land price and stability, free cooling options, carrier accessibility, accessibility of connectivity & power, and tax incentives.”
The research noted Germany led all European countries in data facility construction with the UK and France close behind.
For Skanska, the Norway project is the second announced data centre project dating back to October 2023. Last year, the company started work on a €183 million ($197 million) centre upgrade near London, UK.
In Norway, last year, construction started on the Harmar Data Centre Complex, a 150MW facility. In France, a 130MW centre near Les Ulis is in the building stage, and the Roskilde Data Centre in Denmark project also commenced in 2023. All three projects are scheduled for completion in 2025.
One of the largest data centre build announcements came just last month.
Google announced a $1 billion investment for a UK data centre in Waltham Cross, Hertfordshire. The 33-acre (13.4-hectare) site will support development for new AI-powered technologies and powers services like Google Maps, YouTube, and others.
Arizton noted that green and sustainability cooperation between tech companies and European governments has helped stimulate growth in the sector.
“The government’s interest in promoting data centre investments through the land for development and renewable energy procurement, and reducing electricity tariffs, will drive the colocation market in Europe during the forecast period,” said Arizton. “The trend of procuring renewable energy to power data centre facilities will likely continue, with several operators signing power purchase agreements with renewable energy companies.”
The report added that continent-wide adoption of 5G cellular networks has driven the need for more data centres including hyperscale facilities. Arizton also said increased adoption of cloud services and artificial intelligence, as well as sustainability initiatives, have led to demand for new builds and centre upgrades.
“Several countries are offering tax incentives to local and global investors to facilitate the construction of data centres,” said Arizton. “Spain invests heavily in digitalisation, with plans to invest around $720 million toward strengthening artificial intelligence. France has reduced taxes on electricity to attract data centre investments, while the UK government has established a low-percentage corporate tax rate of 20% - the lowest among G20 countries.”
The report also noted the Federal Act on Data Protection (FADP) in Switzerland and Denmark’s Green Tax Reform initiative as examples of legislative action leading to more data centre construction.
The attention on data centre builds should spur more competition in the sector, Arizton believes.
“New players will likely enter the Europe data centre construction market due to the increasing demand for data storage and hosting services,” stated the report. “Still, they will face competition from local and established global players.”
What are the world’s top data centre building countries?
While the European market for data facility construction is seeing growth, the region is still behind North America, particularly the US, in the sector.
According to Statista, the US leads all countries with 5,375 data centres (as of 2023). A distant second is Germany with 522. The UK recorded 517.
The deficit rose sharply in just the last three years: Statista reported on 9 February 2021 that the US had 2,653 data centres (the amount nearly doubled in three years).
By comparison, the UK recorded 451 centres in 2021, and Germany had 442.
China is the top country from Asia with 448 reported data centres in the country. Canada is ranked fifth in 2023 with 335 data centres.