Category: Voices

Power Purchase Agreements – A green hedge for large electricity needs

Stockholm Data Parks recently had the opportunity to speak about PPAs with Charlotte Unger Larson at the Swedish Wind Energy Association and Paul Stormoen from wind farm developer OX2.

Wind power in Sweden took a surprising step in the second quarter of 2017, with 232 MW of wind power being committed for new projects. In recent years, Sweden has seen growing interest in traditional and renewable PPAs with large corporations such as Google and IKEA driving development of capacity and business models.

Charlotte and Paul, what is a Power Purchasing Agreement (PPA)?
– It’s an agreement between a buyer and a producer of electricity. These contracts are outside Nordpool, the standard market for electricity in the Nordic region. They are typically used for large contracts over longer time periods: anything from seven to 20 years. For these types of time frames, it is difficult to secure predictable prices on the standard market. PPAs can be based on any type of energy source, but their recent surge in popularity has been driven by renewables and primarily wind power.

Different companies have different reasons for concluding PPAs. All companies engaging in a PPA want to get a predictable price over a longer time period than what is typically available on Nordpool. Some companies, like Google and IKEA, are also focused on sustainability and want to ensure that their consumption is matched by additional renewable capacity in the system.

In the build out of renewable wind power, the data center industry, notably Google, has been playing a key role. Since 2012, Google has contracted around 450 MW of renewable wind PPAs in Sweden. In energy terms, that corresponds to close to 1% of Sweden’s total electricity consumption.

How are PPAs connected to Sweden’s system to promote renewable energy?
– In Sweden, new renewable energy production is promoted through a market-based mechanism where producers of renewable energy receive a tradeable certificate for every MWh they produce. Electricity consumers are required to purchase such certificates in proportion to their usage. Price is determined by demand and supply on SKM (Svensk Kraftmäkling), an independent marketplace. By regulating the amount of certificates that consumers need to acquire, the Swedish Parliament influences the price and, thus, the subsidy to renewable energy.

The current scheme aims to make some 28.4 TWh of renewable energy available to 2020, most of which will be wind power, including capacity in Norway. Counting on-going wind projects, this objective has already been reached, corresponding to a capacity of around 9 GW. For 2030, the ambition is that the system should generate an additional 18 TWh.

The increase of renewable PPAs tend to accelerate the build out of wind energy, leveraging the tradeable certificates as part of the PPAs. PPAs reduce the risk for the parties involved and, thus, lower the threshold for a positive investment decision.

Paul, how are PPAs structured?
– Over the past year, the structure of PPAs has developed significantly. They have become longer and involve more parties to handle different types of risks. OX2 acts as a combination of broker and producer. We bring all parties to the table and match demand, financing, finance structure and ownership, and ensure construction as well as operation and maintenance. Typical ownership would be a pension fund with the support of bank loans in what could be a 50/50 mix.

To handle the intermittency of renewable energy, the deals most often require a third-party energy provider of some sort, with responsibility to ensure the energy balance when there is insufficient wind to fulfill delivery obligations.

In these deals, demand and price are fixed, and contract terms will determine how price risk is divided between the producer and the balancing party. To get an idea of price, the Nordpool forward market gives an indication, even though the timeframe and volume traded on Nordpool is shorter and lower, respectively.

Note from Stockholm Data Parks: prices are confidential, but considering Nordpool forward prices and current fierce competition, it can be assumed that long-term PPAs come in below EUR 30/MWh.

Sometimes, even an insurance company can become involved to handle counterparty risk, in case a consumer or producer would be unable to fulfil their obligations over a contract period.

For a customer who wants to ensure renewable energy for all volumes under the PPA, deals can be complemented with Guarantees of Origin for all electrical power that originates from other sources than wind.

Charlotte and Paul, in conclusion, what should we expect for wind and PPAs in the future?
– Now that the new framework for reaching an additional 18 TWh of renewable energy has been agreed, we are set for a continued expansion of wind power in Sweden, as evidenced by the strong figures for the second quarter. With the energy transformation going on in Europe and global warming looming, predicting energy prices for the future will remain a challenge. With that background, and wind power production costs expected to continue to decrease, it is likely that renewable PPAs will increase in significance in the years ahead.

China Telecom opens faster routes to Asia

Stockholm Data Parks had a chance to speak with Fred Jiang, Chief representative for China Telecom in the Nordic region. China Telecom is the largest fixed-line and the third largest mobile communications provider in China. The company provides services to more than 216 million subscribers, making it the biggest fixed operator in the world.

China Telecom is responsible for more than 62% of China’s internet bandwidth and has around 300,000 employees with a revenue close to $50 billion. Founded in 2002, the company is listed on the Hong Kong and NYC stock exchanges, with the Chinese government holding a majority share.

The company is present on all key markets, with nine offices in Europe, and recently decided to enter the Nordic region with Stockholm as the HQ-location.

Fred, why did China Telecom decide to enter the Nordic market?
– China Telecom’s strategy is to be present on all major markets. The Nordic countries are among the most developed markets with a high a penetration of services and appetite for new offerings. In the Nordic countries you find, on the one hand, more and more companies doing business with China and, on the other hand, more and more Chinese companies establishing themselves in the Nordic region. All these companies need high-speed, high quality connections to China, within China and to the rest of Asia. This is a great business opportunity for China Telecom.

Stockholm has been chosen as the Nordic HQ since it is the key node to collect and transfer all Nordic traffic to the China.

What are the key services that China Telecom are offering on the Nordic market?
– China Telecom has a very broad product portfolio addressing Enterprises as well as Operators. For Enterprises, we offer the full range of voice, IP and data services, including managed and cloud services. For any company having operations in Sweden and China, we can offer the best total solution for high-speed, low latency connectivity and data storage services. Throughout Europe, we back up our services with strong SLAs in cooperation with local partners. We are also expanding our offering for Internet of Things, like smart locks and smart windows, together with Swedish partners.

In a similar manner, we help global operators to secure high quality connectivity to China and other Asian countries.

What are the key advantages of the China Telecom offering?
– With our own, dedicated connection to China, we can offer the best low latency link connecting Stockholm with China in less than 110 milliseconds roundtrip delay. Over this link, we offer all types of connectivity at very competitive prices. In addition, we ensure the most efficient connectivity to all major cities on China main land.

What is China Telecom’s view on sustainability?
China Telecom views all dimensions of sustainability as very important – economic, social and environmental sustainability. Historically, we have been much focused on economic and social sustainability, including governance and transparency. China Telecom was elected “No. 1 Overall Best Managed Company in Asia” in Euromoney’s “Best Managed Companies Survey 2016”. In addition, China Telecom was also named as “No.1 Best Managed Company in Telecommunications Sector in Asia”. This is the seventh year in a row that the company has won the award from equity analysts at leading banks and financial institutions across the globe. China Telecom also strives to achieve an environmentally friendly development to assist the green development of the economy and society. Here we believe the Nordic countries are very advanced and are inspired by your countries’ solutions.

Amazon Web Services opens Data Centers in Sweden – interview with Torbjörn Bengtsson, head of ICT division at Invest Stockholm

Stockholm Data Parks had the chance to speak with Torbjörn Bengtsson at Invest Stockholm. Torbjörn heads the ICT division and is Invest Stockholm’s representative in Stockholm Data Parks. He played an important role in bringing Amazon Web Services to the Stockholm Region. 

What are the advantages of establishing a data center in the Stockholm Region?
The Stockholm region combines all the great things Sweden can offer ie lowest power cost in the EU, reliable power grids, green power and a great connectivity to the rest of Europe with the added advantage of being a major city. Here you are close to the customers. Stockholm is the head quarter of many large multinational firms as well as producing tech unicorns at a level not seen anywhere outside Silicon Valley. Being an internet hub with 125 connected networks and all major carrier allows datacenter operators and content providers to connect redundantly to end users across the Nordics & Russia.

What are the key reasons Amazon decided to invest in the Stockholm Region?
The adoption of cloud has matured to an advanced stage here and we have a high density of cloud-dependent companies, many of them using Amazon Web Services. For example, iZettle, King and Mojang rely on AWS for their infrastructure. Quoting from the Amazon press release,  “An AWS Region in Stockholm enables Swedish and Nordic customers, with local latency or data sovereignty requirements, to move the rest of their applications to AWS and enjoy cost and agility advantages across their entire application portfolio.”

In general, datacenter operators look for the right conditions in terms of low energy costs, a strong renewable energy base and robust fiber connectivity. From a site perspective they are look for locations that will have as much of the permitting in place as possible and will allow them to scale up ie have plenty of power and room for expansion.

How will this benefit the Stockholm Region?
Apart from the obvious capital investment, head count in operations and construction at three different locations in the greater Stockholm region (the cities of Västerås, Eskilstuna & Katrineholm) this is a major addition to the Swedish IT infrastructure and will support customers across the Nordics in their digitalization, migration to the cloud and to grow their business. To attract a player like Amazon will of course also put Stockholm on the map for other investors and build a larger ecosystem around the datacenter and cloud industries.

How large are these data centers and when should we expect them to be operational?
AWS never reveal their investments by region (sqm, power usage, headcount or USD invested) but Andy Jassy, CEO of AWS told Swedish DI Digital that this is a major investment not only in terms of the infrastructure itself but also in the staff they employ. “Over time it could mean billions of dollars if Stockholm is a successful region, and all the regions where we have launched so far have been successful”, he said.

What should we expect next for Stockholm?
We feel that the Nordics and Stockholm especially so are in the focus for datacenter investors after the tax cut as of Jan 1st 2017 which gives Sweden the lowest power costs in the EU. The investment by AWS will of course strengthen the case for Sweden and Stockholm even more so. We will together with Business Sweden and our partners in the Datacenters by Sweden project & Stockholm Data Parks continue to push this message to our potential investors.

I think that the offer that SDP represent, allowing datacenter operators to be climate positive and get paid for their excess heat, will be an even more attractive proposition during 2017 and 2018, and that we will see more companies following in the footsteps of Interxion and Ericsson that have chosen to resell their excess heat.

Why Stockholm is one of the best connected cities in World – interview with Mattias Fridström at Telia Carrier

Go to Stockholm – Get connected

Stockholm Data Parks had a chance to speak with Mattias Fridström, Vice President & Chief Evangelist at Telia Carrier, part of the publicly listed Telia Company that was previously the PTT incumbent in Sweden and Finland. Telia Carrier got off the ground in the late 1990s when it became possible for corporations to own and manage telecommunications and data cables across national borders. The company started to invest heavily in Europe and the United States, laying its own fibers as well as acquiring access to existing networks.

Today, Telia Carrier is a Top 2 world leader provider of Internet backbone connectivity, connecting global content providers and more than 680 operators throughout the globe. The company is present in most major cities in Europe and USA, with more than 220 points of presence worldwide in total. For example, 1.3 billion people play computer games that rely on Telia Carrier’s backbone connectivity.

Mattias, what characterizes a great fiber network?
– Assuming that all the basic technical requirements of a network are in place, the key aspect of a great fiber network is its redundancy. The choice of equipment is only a small part of this question. More important is a network’s geographical diversity. You need to ensure multiple routes between all large cities and countries.

For Telia Carrier’s major points of presence, we always have at least two access points, (called red point and blue point). This ensures very high availability for our customers and for their end-customers throughout the world. For transmission between Europe and the US, Telia Carrier has acquired access to over 10 different routes to secure the best possible diversity. For submarine routes this is especially important since repair times sometimes exceeds two weeks, compared to six to eight hours for a land connection.

What are important factors in a fiber deal?
– Closely connected to what makes a great fiber network, your ability to prove your network’s diversity will be at the core of any serious fiber deal. The more of a network that you own yourself the better, since for those parts you will be able to make credible commitments for SLA and repair times.
There is a considerable difference between deals for whole fibers and individual wavelengths, respectively. For wavelengths, prices have fallen significantly in recent years, with only small differences depending on distance between different locations. This is due to improvements in technology where laser signals need less frequent regeneration compared to just a few years ago. Today, a signal can travel 1,500-2,000 km without regeneration, depending on bandwidth. The price of a 10G wavelength from Stockholm to any major European city is around EUR 1,000/month.

Data center operators and their customers are looking for good connectivity. What does it mean and would you say that Stockholm meets those requirements?
In this sense, connectivity is the ease of access, on the one hand, to all content providers and, on the other, to all end-users through local ISPs. From this perspective, Stockholm is exceptionally well positioned. In addition to Telia Carrier being the largest Internet backbone carrier in Europe, 17 additional European backbone carriers are present in Stockholm. Of these, including Telia Carrier, 13 are global carriers – suggesting that you have excellent connectivity to all European markets at competitive prices. Already today, games and video streaming are provided from Stockholm to the European continent as well as to the US.

In addition, at the largest Internet Exchange in Stockholm, NetNod, with more than 125 connected networks, all the major carriers and ISPs are present together with all major content providers like Akamai, Amazon, Apple, Cloudflare, Edgecast, Facebook, GoDaddy, Google, IBM Softlayer, LeaseWeb, Limelight, Microsoft, Netflix, Riot Games, Twitch, Twitter and Vkontakte.

Finally, I should also mention that Stockholm has the best connectivity and connections in Europe for serving St. Petersburg and Moscow, and that Telia Carrier’s points of presence, of course, include the major cities in Asia.

Choosing Stockholm as a location, would latency be a concern?
Very few applications are sensitive to delays. In the industry, the general assessment is that latency would be a consideration for less than 10 percent of applications. Financial, computerized trading applications where a few extra milliseconds could make or break a deal clearly need to be close the trading centers. Otherwise, human users will not notice delays shorter than 30-40ms. Within that range of delay, you can reach far more than 100 million users in Europe and more than 50 percent of Europe’s GDP from Stockholm.

“Wasting hot air should be a thing of the past” says Henrik Palmgren, Head of Data Center Segment Europe

We are all under increasing pressure to reduce energy waste and the associated carbon impact and rightfully so! With today’s data centers consuming 30 times more power per square foot than the average office building and with the demand for electricity continuing to grow, putting ever more pressure on supply it is critical that we plan to use our resources more effectively.

That’s why the team at ABB really supports Stockholm Data Parks’ vision to create a place where the energy is green and excess data center heat isn’t wasted.

It’s something we’ve been committed to for years, through the development of ABB’s pioneering technology that ensures excess data center heat is used as a positive tool to fight climate change.

Our approach is simple; we design data centers that are greener and allow stronger integration of renewable energy resources. For us, it’s a win, win situation – we build efficient data centers where wastage and excess heat can then be used to warm homes across the city and conversely provide operators with free cooling.

We adopt a three-pillar strategy to reducing wastage:

  1. We don’t just see energy as electricity. It could also be hot and cold water. We use smart intelligent connections to get heat out and product cooling back to the data center.
  1. We all know that increasing energy demands lead managers to over-plan capacity from the outset. At ABB, we take a different view, by provisioning electrical infrastructure with more industrial thinking. The use of elastic critical infrastructure allows operators to purchase the required amount of capacity from day one, reducing costs and driving energy efficiency.
  1. We also develop more environmentally friendly data centers through deep component visibility. We all know that data centers can be complicated; they include a myriad of devices, from servers to fire extinguishers to cooling equipment, all of which need to be connected. By using industrial protocols that transfer more content and data we minimize the amount of cables and reduce complexity in the architecture.

It’s this vision and expertize that allows managers to take control of their infrastructure and visualize and control demand from day one.

Our ethos fits with Stockholm Data Parks’ aims. We’re committed to developing technologies for a ‘Better World’ and what better way than converting excess data center heat into power for a whole city?  It’s the future and we all need to work smarter to make sure that we use our resources more efficiently.

By Henrik Palmgren, Head of Data Center Segment Europe, ABB


Home of the Green Cloud

Some claim that timing is everything. Just before Stockholm Data Parks was launched, Forbes published its annual list of the Best Countries for Business. Sweden moved up four steps to the number one position.

Forbes ranking Best Countries for Business

Stockholm- a new business unicorn

It’s encouraging to read how the country has climbed from rank No. 17 in 2006 with Stockholm today being a new business unicorn creator on par with Silicon Valley, with names such as Spotify, King, Skype, Klarna and Mojang.

Since the objective of Stockholm Data Parks is to attract investments in large scale data centers, which engage in heat recovery, the Forbes ranking is important. But there are possibly even more important points to consider. Stockholm is in a good position to become the home of the Green Cloud.

Competitive electricity prices, an abundance of sustainable electricity and paid-for heat recovery lay the foundation for a sustainable and cost efficient hub for cloud services, where the reuse of heat can make the data centers net climate positive.

A European hub for FinTech

The vibrant startup community and the strong financial sector are important drivers for data traffic growth. Stockholm received 18% of VC financing to European FinTech during 2010-2014, and the city has become the financial center of the Nordics. Swedish banks have a 90% market share in Baltics.

The attractiveness of Stockholm has already been discovered by major companies. The city ranks third in Europe for Global HQ of Forbes 2000 companies, trailing only London and Paris. In addition, there are 127 regional HQs of Forbes 2000 companies in Stockholm.

80 million users- 30 milliseconds aways

The traffic-generating potential of the startups, the financial sector and the large corporations is augmented by the high appetite for cloud adoption and IT-outsourcing in the Nordic countries, as evidenced by the latest full scale report in 2014 by Eurostat.

Looking beyond the national border, Stockholm is ideally positioned as a hub for Northern Europe. Within 30 milliseconds of round trip delay from the city, there is an addressable market with more than 80 million data users. All these users could be served from Stockholm, with the plausible exception of the very most time sensitive applications that will likely be managed in edge data centers on a city-by-city basis.

Welcome to Stockholm Data Parks!

Johan Börje
Head of Marketing and Sales
Data Center Cooling and Heat recovery
Fortum Värme


Peder Bank, MD Interxion Nordics, On networking clusters and heat recovery

It’s all about networking clusters

Stockholm Data Parks had a chance to speak with Peder Bank, Interxion’s Managing Director for the Nordic Region. Peder spends his time between Copenhagen and Stockholm where Interxion’s Nordic data centers are located. Interxion is a Carrier and Cloud neutral Colocation data center operator with 42 data centers in 11 European countries in 13 different cities.

Peder, the market for data centers and cloud is booming
– what are the most important trends and drivers that you see today?

– The spectacular growth in computing has been going on for quite some time. What is different now is the concentration of growth into the cloud and colocation data centers. In addition to Internet of Things, digital media and cloud applications, important technology in networking and security has developed considerably and this has allowed enterprises to seriously start the transition to data centers and the cloud. It is a true digital revolution going on.

Today, more than 75% of enterprises have their own data center, but this is changing rapidly and companies are moving more and more workloads into the cloud and choosing colocation instead of building their own datacenters. The key here is that being present in a colocation center, you can have direct access to multiple networks and several cloud services. In this transition, service providers will play an important role to frame the right offerings.

In this new landscape, how would you describe Interxion’s
position and competitive strength?

– In Stockholm, we have had a strong growth the last 4 years and today we have a strong connectivity hub in Kista giving access to more than 60 carriers and we are the only data centre in Stockholm that can provide you with direct access to both Microsoft Azure and AWS direct node. We have worked hard for 16 years to make our data center one of the best connected datacenters in Europe. The combination of this allows for simple and efficient access to all networks you need to connect to and overcomes concerns about latency and capacity bottlenecks.

Imagine if you have invented a new game and want to role that out in multiple countries. How do you do that? If you come to Interxion’s data center, you could immediately get access to all the networks in our hub and, via the 3 internet exchanges get access to more than 600 networks to distribute your content/traffic and you can get extra capacity from the big public clouds when you need it.

Today, half of all traffic is on mobile devices and our attention span is short – we typically expect a page to load completely in less than three seconds. As a provider of a service, you need to bring together all the content, perform all processing and present the result to the user in three second. By being present in our data center, you can maximize your network performance and access distributed servers and storage in the shortest possible time.

In addition, let me emphasize our local focus. We are a locally operated company with decentralized decision-making, which allows us to move fast and adapt to new customer requirements. We also provide a high level of service by maintaining a well-equipped and professional local staff.

Looking a few years ahead, what should we expect
from Interxion in Stockholm?

– We will continue to build on our strengths, that is to capitalize on our communication hub and to aggressively build out our campus here in Stockholm. The campus idea is important as valuable networking effects can be achieved. Our uniqueness is related to all the connections the Interxion group has established in all leading European Markets with a total of more than 600 netvorks PoP. We can dynamically offer them more capacity in our data center allowing them to meet growing demands from local customers in the Nordic region. By bringing in the international players, the value for the local customers increases. So, it is a virtual circle. My expectation is that a huge part of Swedish enterprises in the coming years will move to data center campuses for gaining operational efficiencies and direct access to cloud services, driving the need for new colocation capacity.

You are using Fortum Värme’s cooling service to cool your
data center, how has the cooperation been?

– In our data center, we have a chilled water based cooling system. Working with Fortum Värme has allowed us to complement that system to gain OPEX savings. We get paid several months per year when we use the system since Fortum Värme can recover the heat and use it for residential heating.

The cooperation has been excellent. The service has been reliable and issues have been resolved efficiently. We continue to work with Fortum Värme and are right now exploring how the cooling and heat recovery can be redefined for our future expansion.

Cooling as a Service from Fortum Värme comes with heat recovery.
How important has this been for Interxion in Stockholm?

– For me, heat recovery is part of making our data centers greener. Why should you waste the excess energy when it can be used for residential heating? Reuse of resources is important if we should combat climate change. I believe that all data centers should recover their heat.

Today, heat recovery is part of how I position Interxion in Sweden, and it has been important in attracting customers. For international clients, our heat recovery approach has clearly raised the customer interest in Interxion’s Swedish data center.


DISCLAIMER. All information contained herein and any opinions expressed in it is intended solely for information. The information does not in any way constitute any recommendation to invest or otherwise modify any information that has previously been given by Interxion. Any opinions expressed in this document are subject to change and may differ from those expressed by others in the Interxion group.