Data centre growth triggers backlash in Norway over power deficit concerns

Norwegian Policymakers Debate Data Centre Growth and Power Deficit Risks

Debate Intensifies Over Data Centre Expansion and Energy Concerns

By Nora Buli

Rapid Growth in Data Centre Power Demand

OSLO, Oct 29 (Reuters) - Forecasts published on Thursday of rapid growth in power demand from data centres in Norway have further underscored concerns among policymakers and energy market operators, with one political party calling an emergency debate in parliament next week that may lead to a ban on new data centres.

The data centre sector, which barely existed three to four years ago, now accounts for between 3 and 4 terawatt hours (TWh) of demand, about 2.5% of the total, and is set to continue growing fast, Kjetil Lund, the head of the the Norwegian Water Resources and Energy Directorate (NVE), the energy regulator, told Reuters.

International and Domestic Reactions

Norway is the latest country where the rapid growth of data centres is meeting resistance, with critics saying the largely foreign-owned industry provides few jobs and will push up power prices. Data centres are also a major topic ahead of midterm elections in the US.

Economic Impact and Employment

A study commissioned by the Ministry of Digitalisation and Public Governance said data centres accounted for a direct value creation of about 3.2 billion crowns ($345 million) in 2025, and employed the equivalent of around 600 full-time positions.

Future Projections and Power System Risks

By 2035, the industry may consume 25 TWh based on already approved grid connections, a NVE report published on Thursday showed. 

Hydropower Dominance and Potential Deficit

Norway's electricity system is dominated by hydropower generation, and the country typically has a power surplus of about 15 TWh, but with little growth in generation capacity, there is an increasing risk of a power deficit, the report added, in line with a recent warning from transmission system operator Statnett. 

Political Response and Policy Measures

Calls for a Halt on Data Centre Permitting

Some politicians are calling for a halt to data centre permitting and construction, with the far-left Red Party saying it will propose such a motion next week. Other parties have shown support for a halt, but it is not immediately clear whether the motion has enough support to win a majority. 

Government Actions and Strategic Considerations

The minority Labour Party-run government is already working on both short-term and long-term measures to bring the situation under control, energy minister Terje Aasland told Reuters.    

Ensuring Strategic Data Centre Development

"It is about ensuring the right kind of data centre establishments in Norway, those that are strategically important at a national level. I am also examining how these developments affect the power system," he added.

(Reporting by Nora Buli in Oslo; Editing by Xevi Fontdegloria)