New business

Data centers in Norway – an updated national strategy offers new business opportunities

With its cold climate, easily accessible renewable energy, competitive prices on electricity, modern digital infrastructure and active government support, Norway – ranked as the most resilient country in the world – is increasingly seen as a favorable location for international data center projects.

In Europe, Norway has fundamental advantages in terms of data center investment opportunities and is attracting global interest. An example is the Azrieli Group’s acquisition of Green Mountain Data Centers, where DLA Piper assisted the Azrieli Group. Market players expect a rapid expansion of the Norwegian data center sector over the next few years, and new opportunities are already emerging in the market.

Anyone looking for opportunities in the data center market in Europe can expect strong predicted growth and rapid expansion over the next few years if they look to Norway. The country is in a strong position to capture new European demand for data center capacity, and any development will be fueled by cost efficiency and accessible, green and renewable energy.


As mentioned in our 2015 Real Estate Gazette article “High-tech real estate – the future looks bright for data centers in Norway”, Norway has very favorable climatic conditions for environmental cooling , abundant clean energy resources, a good electrical grid and fiber infrastructure, large land areas available and a competent workforce in both the real estate and IT sectors. In 2015, however, Norway’s tax position on energy consumption was a barrier for large-scale data center operations compared to neighboring jurisdictions such as Sweden, Denmark and Finland.

Since 2015, the legal, political and economic framework for data center activity in Norway has evolved in a positive direction, both for developers and potential investors. As we enter 2022, Norway is well positioned to capture a disproportionate share of future growth in hyperscale cloud installations, high performance computing and enterprise data centers.

Low total cost of ownership

One of the main fundamental advantages of investing in Norwegian data center projects today is the low total cost of ownership. Compared to other European markets, rental costs, land availability, cooling costs and the cost of powering racks in Norwegian data centers are considered very competitive.

Thanks to its hydropower supply, Norway has a long tradition of granting favorable tax rates on energy consumption to energy-intensive industries. The production of aluminum is one of the first examples. Data centers were not included in the tax system with lower tax rates for certain energy-intensive industries in its early days. But since 2017, data centers in Norway are considered an energy-intensive industry for tax purposes, which means that favorable tax rates now apply to data center energy consumption. This change put Norway at the forefront of total cost of ownership, with some of the lowest energy prices in Europe on data center power consumption.

Norway generally offers good power utilization efficiency (PUE) in its data centers. PUE is a metric used to determine the energy efficiency of a data center. It is calculated by dividing the total amount of energy entering a data center to be used to cool and sustain the facility as a whole, by the amount of energy used by the IT equipment itself, the ideal number being as close to 1.0 as possible. .

One of the main reasons for Norway’s good PUE scores is Norway’s cool climate, which allows for higher efficiency due to free automatic cooling of the environment. The high number of days with low temperatures results in better PUE than sites in warmer climates. Data centers in Norway also use cold sea water from nearby fjords for cooling.

Green and renewable energy

Norwegian electricity production comes almost exclusively from green and renewable sources, and mainly from hydroelectricity. Hydroelectricity is considered the cheapest source of renewable energy and accounts for around 90% of Norwegian electricity production. Norwegian renewable energy production already exceeds consumption, and Norway has long been a net exporter of renewable energy. In 2020, 98% of electricity consumption in Norway came from renewable energy sources, the highest rate in Europe.

Market leaders in the data center community focus on the origin of power and environmental, social and corporate (ESG) governance in general. Norway is consistently ranked among the most sustainable countries in the world in terms of ESG compliance. With its easy access to green and renewable energy in an increasingly environmentally conscious market, Norway has a competitive advantage.

And after?

In 2018, the Norwegian government launched the strategic document “Norway as a data center nation”. The strategy document included suggestions such as a favorable property tax on the sites, additional funding to further strengthen fiber connectivity to other countries, a new simplified legal framework for the digging of fiber cables on public lands and additional funding for higher education in the IT sector.

The 2018 strategy document was considered a success, and in August 2021 the Norwegian government launched a new strategy, signed by five different ministers, to invite international parties to establish data centers in Norway. Through the strategy document, the government has expressed the intention to:

  • focus on how Norway can help foreign companies get established with data centers;
  • increase competitiveness by ensuring stable and continuous framework conditions for industry;
  • facilitate sustainable development by introducing requirements for the use of excess/waste heat and creating a national heat map for better use of excess/waste heat;
  • increasing the effectiveness of development and permits;
  • increase cooperation between industry and educational institutions; and
  • strengthen digitalization.

As part of the 2021 strategy, and to highlight Norway’s attractiveness for data centers, the government has also published guides on how to establish a data center in Norway. The information material directly states that the Norwegian government wants more companies to choose Norway as the location for their data center, and that the government is committed to making the process of establishing a data center in Norway as smooth as possible.

After the September 2021 elections, Norway now has a new government. The new government has expressed no intention of deviating from the strategy launched before the elections. DLA Piper continues to monitor signals from the new government regarding the data center industry.