November 5-7, 2019: ICT & Logistics
Amsterdam temporarily puts a hold on building new data centers
The number of data centers in the Amsterdam region has increased with large numbers in recent years. Amsterdam even has the largest cluster of data centers in Europe and is the most important data hub in the Netherlands. As we all consume more data, data centers have become an essential part of the digital economy. On the other hand, they also take up a lot of space and because of the high energy consumption they put a big load on the electricity grid.
The electricity network in Amsterdam is reaching its limit
Amsterdam’s electricity network is reaching its limits. This is the conclusion of a study of the energy infrastructure in the North Holland province by network controller Alliander and the municipality of Amsterdam. According to grid manager Alliander (2019), the data centers around Amsterdam already consume 15% of the total power capacity of the municipality of Amsterdam. As a result, data centers put great pressure on the capacity of the energy network in Amsterdam. Companies that provide electricity are currently struggling to provide households and businesses with new connections to the electricity grid in time.
The Amsterdam region has suffered several power failures in recent years, with major consequences. On April 29, 2018 a major power outage hit the Haarlemmermeer. This also affected Schiphol and thousands of passengers were no longer able to check in, which resulted in utter chaos. Before the construction of new data centers can proceed further, substantial investments must first be made in improving the electricity grid according to Alliander.
Lack of space
In addition, the municipalities want to retain space for housing, businesses, nature and recreational need. In order for municipalities to retain the grip of data center growth, it is essential to first formulate a clear policy.
In the press release from the municipality of Amsterdam, the alderman for Sustainability and Spatial Development of Amsterdam (2019, July 12), Marieke van Doorninck says:
The expansion of the amount of data centers is in a sense a consequence of our own consumption and lifestyle: we want to be online on our phones and laptops all day. To a certain extent we will have to accept the infrastructure involved, but keep in mind that the space in Amsterdam is scarce. As municipalities, we therefore want more control over the establishments of new data centers and we also ask them to contribute to the environmental challenges of the city. We are going to set requirements in the area of making available residual heat free of charge for the heating of homes and the use of green energy.
Read the full press release from the municipality of Amsterdam in Dutch (2019, July 12) here.
We are too dependent on Amsterdam
From an international perspective, the Netherlands has an important position as a connectivity node for the storage and processing of data. Because of the connection to the AMS-IX, many data centers cluster close to the internet node in Amsterdam. Because data centers cluster around Amsterdam, many companies depend on a relatively small area. This means that a disaster in this region can have major economic consequences. In order to spread risks and prevent damage in case of an emergency, it is wise for companies to separate their data storage in data centers in different regions. This serves as a backup. By spreading data centers geographically across the country, people become less dependent on the Amsterdam region.
Advantages of geographically spreading data centers
Various parties claim that the temporary halt to building data centers in the Amsterdam region will negatively affect the position of the Netherlands as a digital leader in Europe. However, by stimulating the construction of data centers elsewhere, new opportunities for other areas in the Netherlands are created to develop smaller datahubs.
The geographically spreading of data center locations throughout the Netherlands, will provide an economic stimulus to various regions in the Netherlands. International connectivity is very important for the positioning of a region and data centers attract (international) tech companies to a region. By spreading data centers across the Netherlands, the position of being a digital leader becomes stronger. In addition, this is a favorable development for a local economy because it creates a lot of jobs amongst other things. The spreading of data centers also ensures that the pressure on the electricity network and the spatial design of the landscape is more balanced.
The opportunities are there for the taking
The Dutch data center sector argues for a constructive solution to solve these challenges with regard to digitization and energy transition. Within the Spatial Economic Development Strategy, national and regional governments also made agreements about the growth of data centers. By drawing up a route map, they want to establish multiple data hubs throughout the Netherlands. The main objective is therefore to improve the international competitive position of the Netherlands.
The province of South Holland has already started a research study to gain insight into the economic niches of the digital economy in South Holland. They look for opportunities which contribute to the digital economy, such as the construction of the 5G network, fiber optic connections and the role of data centers. The municipality of Rotterdam, in collaboration with the business community, has started a lobby to recruit international technology groups to the region. In short, there are many opportunities, now is the time to address them accordingly.
Smartdc recently published an article related to this topic. Read the Rotterdam article as a digital data hub here.