My Oulu: Data centre investments set to transform the Oulu Region

Several major data centre investments have been announced in the Oulu region during the autumn. Given the scale and number of the projects, it might seem that North Ostrobothnia is about to become saturated with data centres.

In international terms, however, Finland’s data centre capacity remains relatively modest.

”In reality, Finland does not have very many data centres – and that will still be the case even once all the projects announced so far are operational. London alone has five times more operational data centre capacity than the whole of Finland. Even when all the data centres currently under construction in Finland are up and running, we will still be behind London”, says Excecutive Director Antti Poikola of the Finnish Data Center Association.

Poikola says two things are particularly important when discussing data centres: scale and time.

”An entirely new industrial sector is emerging in Finland, and it is here to stay. Data centre projects are developed over a long time frame. Construction of Google’s data centre in Hamina began in 2009, and today Hamina accounts for half of Finland’s data centre capacity. With its latest investment, Google will double its capacity in Finland”, Poikola says.

Several projects are now in the pipeline across North Ostrobothnia. Five data centre projects are planned for Ii, while Google is preparing a data centre project in Muhos and AmpTank is developing one in Utajärvi. Further details about the international operators coming to Utajärvi are expected later in the autumn.

Two data centres are also planned for Oulu, with the aim of strengthening Europe’s digital sovereignty.

The number and scale of the projects have already given the Oulu region a strong claim to the title of Finland’s data centre valley.

Northern Finland well positioned

The European Commission also wants to significantly expand Europe’s data centre capacity, partly to reduce dependence on major US technology companies.

”European Commission’s aim is to triple Europe’s data centre capacity over the next five to seven years. Member states will be expected to identify acceleration areas where data centres could be built quickly. Key criteria include access to electricity, the availability of renewable energy and sufficient transmission grid capacity”, Poikola says.

By these criteria, Northern Finland is well positioned to become one of Europe’s data centre acceleration areas.

Electricity grid capacity will also play a major role in determining where projects can be located within Finland. In practice, data centres can be developed where sufficient electricity and grid capacity are available.

”There are understandable concerns about whether too many data centres could be developed too quickly or without sufficient control. At the same time, areas with particularly favourable conditions for data centres will become part of the regional policy discussion as acceleration areas are identified. Northern Finnish municipalities should pay close attention to this,” Poikola says.

He also stresses that the effects of any location policies will take time to emerge. Whether data centre development is steered nationally or acceleration areas are promoted at EU level, the impact will unfold over years and even decades.

Investments reshape local economies

The economic scale of the projects is substantial.

In Utajärvi, the investment is estimated at EUR 7.5 billion. In Muhos, several billion euros of Google’s announced EUR 13 billion investment in Finland could be directed to the municipality. In Ii, the five planned projects could represent investments of up to EUR 30 billion if all the planned capacity is realised.

The final totals may still change by billions of euros, but the overall scale is already clear: data centres could drive a major structural transformation in the Oulu region.

The precise impact on employment and tax revenues is still difficult to estimate, as international technology companies disclose relatively little about their plans. For small municipalities, however, even an increase in property tax revenue could have a significant positive impact on municipal finances.

The employment impact also reaches beyond the data centres themselves. According to Finnish Data Center Association, for every megawatt of data centre capacity, approximately one job is created within the operating company and another in businesses providing services to it, such as security, catering and cleaning.

Municipalities prepare together

Investments on this scale create very practical needs for municipalities. During construction, projects require labour, accommodation and services. Later, they create demand for housing and skilled employees in permanent roles.

With several major projects progressing at the same time, regional cooperation becomes increasingly important. Labour availability, education, housing and infrastructure must all develop at the right pace, while municipalities also seek to ensure that as much as possible of the investment and employment remains within the region.

Data centres may also act as anchor investments that help unlock other projects. A large number of green transition energy projects have already been included in land-use plans across North Ostrobothnia and are waiting for investment decisions. Growing electricity demand from data centres could help accelerate some of them.

A transformation measured in decades

The energy needs of data centres must also be viewed over the long term.

”The economic impact of construction will be spread over many years, and the same is true of the projects’ energy demand. If we look back 15 years, Finland’s energy mix still relied heavily on peat, natural gas, coal and imports from Russia. These have since been replaced in particular by wind and nuclear power”, says Janne Hietaniemi, Cleantech and Industry Key Account Director at BusinessOulu.

”Data centres also operate on a long time horizon. That gives the energy system time to develop and keep pace with growing demand”, he adds.

Mayor of Oulu Ari Alatossava points out that North Ostrobothnia has experienced large-scale industrial change before. It has simply been some time since the region last faced a transformation of comparable scale.

In his view, the development of the data centre valley can be compared with the rapid growth of the sawmill industry in Northern Finland in the 19th century.

This time, the transformation is not limited to one industry – data centres. Projects linked to the hydrogen economy and the green transition are also turning North Ostrobothnia into a magnet for international investments worth billions of euros.