In 2025 there have been a slew of major investment announcements in the Nordic countries, including OpenAI’s Stargate Norway initiative and TikTok’s planned 1 billion euro data centre in Finland.

The Nordic countries have become a preferred destination for data centre investment because they offer multiple complementary advantages. Chief among these are abundant renewable energy, unusually favourable cooling conditions, increasing market demand, and stable infrastructure. Below, we explore each of these in more depth, including climate data from Norway to illustrate the “free cooling” benefit.

Abundant & Renewable Energy as a Foundational Asset

Renewable power is not marginal in the Nordics; it is central. Norway generates almost all of its electricity from hydropower. Iceland relies heavily on hydro and geothermal sources. Sweden and Finland combine hydro, wind, nuclear, and biomass to deliver large baseloads of low-carbon electricity. The availability of renewable energy underpins many of the data centre companies’ sustainability strategies and allows for long-term Power Purchase Agreements (PPAs) that lock in green energy at stable prices. An example of this is Google’s investment of €1bn in a Finnish data centre to improve its AI capabilities, where the expansion will make use of green power and also send waste heat into the local district heating network.

Energy generation in the Nordic countries is not just sustainable, it is also plentiful. Whereas grid capacity is a major challenge in many other markets, in the Nordic countries there is often excess capacity that new data centre projects can draw upon, and a greater potential to increase renewable energy generation to meet future requirements.

Climate-based Cooling Benefits: “Free Cooling” and Small Temperature Extremes

Climate conditions in the Nordics allow data centres to exploit what is often called “free cooling”—using ambient air or cold water rather than energy-hungry chillers for much of the year. Data centre facilities like Green Mountain’s OSL-Hamar in Norway illustrate this clearly. The average temperature in the Hamar area is around 5.8 °C which means that even in summer (with July averaging about 16.8 °C) cooling demand is much lower than in hotter climates.

Because cool conditions persist for much of the year in Scandinavia, facilities can maintain high energy efficiency and low PUE (Power Usage Effectiveness). The example of OSL-Hamar shows a facility using free-cooling chillers and fan arrays to achieve a PUE of around 1.2, which is very low compared to global averages. This minimises the running costs and the carbon footprints of data centres built in the region.

Heat Reuse and Circular Energy Systems

Nordic countries already have developed infrastructure and institutional support for capturing and reusing waste heat. Instead of letting server cooling waste dissipate into the environment, many data centres are being designed to feed their excess heat into local district heating systems or nearby industrial processes. This model both reduces net carbon emissions and benefits local communities, and provides another reason for eco-conscious businesses to invest in data centres in Nordic countries.