Foreign companies dominate data centre capacity
`As more and more players compete for scarce Norwegian electricity, we need to ask which data centres Norway actually benefits from´, says NHH Professor Øivind A. Nilsen.
NHH professor critical of data centre measures
A licensing scheme for data centres could create extensive bureaucracy, fears NHH professor Øivind A. Nilsen. He believes the authorities should instead use prices and taxation to steer growth.
On Monday, the government presented new measures to control the development of data centres in Norway.
One key measure is to establish a licensing scheme. This will set requirements relating to digital security, emergency preparedness and the need for AI computing capacity, according to Minister of Digitalisation Torgeir Micaelsen (Labour).
The scheme is due to be ready towards the end of 2027.
But NHH professor Øivind A. Nilsen is sceptical of the measure.
'A licensing scheme is a major intervention in business. I fear a great deal of bureaucracy and substantial resources devoted to control and monitoring, and I question what we will get in return,' he says.
Who will benefit?
Nilsen sits on the Norwegian Board of Technology’s expert group, which recently presented a report on the societal benefits of data centre development in Norway. He stresses that he is speaking here as a professor of economics, not on behalf of the expert group.
‘As an economist, I would rather use prices and taxation than try to regulate the scale of development through a licensing scheme,’ says Nilsen.
He is particularly concerned with how data centre development can generate revenue for both the state and host municipalities. Municipalities expect jobs and tax revenue, but he questions what they actually end up with.
Political pressure over data centres
The NHH researcher notes that the government has been under pressure to slow data centre development. Several parties are pushing for stricter regulation of the industry.
Norway has been attractive to data centre operators, partly because of its relatively low electricity prices by European standards, Nilsen points out.
‘Many have had high expectations of this industry, and the situation has escalated in a relatively short time.’