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New H&M data center in Stockholm features large scale heat recovery

Leading fashion retailer H&M has decided to build a new data center in Stockholm with cooling and heat recovery integrated from the start. Energy company Fortum Värme will reuse the data center excess heat by distributing it to customers throughout the city. The new H&M data center is designed to handle an IT load of 1 MW and can heat some 2,500 modern residential apartments at full load.

H&M’s decision is a validation of Fortum Värme’s and Stockholm Data Parks’ ambition to attract and promote a data center industry where no heat is wasted. H&M has recovered heat from its Stockholm data centers since 2013, and the new data center, which will be operational in 2018, significantly extends and multiplies H&M’s contribution to heating the city.

“IT is at the core of H&M’s business, and it’s important for us to be as sustainable as possible in everything we do. Just as we collect second hand clothes for reuse and recycling, it will be imperative for future data centers to recover excess heat,” says Jan Lundin, head of H&M data centers.

The solution chosen by H&M uses heat pumps in an N+1 configuration. Excess energy is fed directly from the data center to the district heating network at the required temperature.

“It’s fantastic that a growing number of companies are connecting their systems to our district heating network and stop wasting data center excess heat. I’m particularly thrilled that H&M, which has been gaining experience of heat recovery in recent years, has decided to design its data center with a redundant cooling and heat recovery solution from the outset. It’s smart and profitable, and together we can make Stockholm even more sustainable,” says Erik Rylander, Head of Stockholm Data Parks at Fortum Värme.

Close to ninety percent of all buildings in Stockholm are connected to the district heating network. The Swedish capital is one of the few cities in the world where large-scale heat reuse from major data centers is possible. The objective is to meet ten percent of the city’s heating needs through heat recovery.

For more information, please contact:

Erik Rylander
Head of Stockholm Data Parks
Fortum Värme
erik.rylander@fortum.com
+46 70 693 51 84

For more information, visit Stockholm Data Parks. You can also follow us on LinkedIn and Twitter

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.

SDP in collaboration with the real estate industry

On June 20th Stockholm Data Parks attended the ULI Tech Conference in London to take part in a panel debate on “The 4th Revolution – Urban Evolution”. The Conference brought together cross sector knowledge sharing in the real estate and land development industries. In the panel Erik Rylander emphasised the need for systemic and collaborative thinking, plus the valued add that data center heat reuse can bring in urban development.

Please find a copy of the Speakers Bio’s and a the Conference Programme below.

ULI Tech Conference 2017, London

ULI Tech Conference 2017, London

ULI Tech Conference 2017, London

Stockholm Data Parks spread the word in Asia

Last week, May 24-25, one of Asia’s largest Data Center and Cloud events took place in Hong Kong. Stockholm Data Park was there.

Data Center World Hong Kong is one of the biggest events in Asia. Stockholm Data Parks, represented by Erik Rylander was there as speaker giving a presentation on “The next level of data center cost efficiency and sustainability”. Erik’s presentation attracted lots of interest and hopefully another step has now been taken towards the first major data center establishment by an Asian player in Stockholm.

View Erik’s full presentation: Stockholm_Data_Parks_DCW_Hongkong_May-17

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.

Stockholm-based companies describe the importance of access to an operator-neutral fibre infrastructure

Näringsminister Mikael Damberg – Amazon Web Services intåg viktigt för Sverige

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