Misconceptions about data centers are spreading in Finland, says the professor

The public discussion about data centers is based on wrong figures and often misses the point, says the University of Helsinki report.

Several new data centers are coming to Finland, and in connection with the news about them, there are reports about the data centers’ power needs. This has raised concerns about the sustainability of Finland’s electricity grid.

“Estimates of power needs always come from builders or their representatives, and they probably won’t come true at least right away. From the server room user’s point of view, you should never build more than you need. Permits are indeed applied for large centers, but typically the centers start operations much smaller than advertised,” Professor of Computer Science at the University of Helsinki Jussi Kangasharju says in the university’s bulletin.

In general, there are a lot of misunderstandings in the public discussion about data centers, observe Kangasharju and Visiting researcher Mikko Pervilä in his report.

One such is the focus on the adequacy of electricity imports for data centers. According to Kangasharju, a much bigger issue is the capacity of the electricity transmission network, which runs out faster.

The report also draws attention to VAT deductions, which give data centers a big tax advantage almost by accident.

“Data centers can make large VAT deductions for their purchases, but since they do not sell taxable services in Finland, the right to deduct for accounting purposes turns into a direct subsidy,” notes Pervilä.

The report also says, among other things, that the number and size category of data centers are constantly overestimated based on license applications.

“By combining requests, we will reach proportions that will not be realized in Finland for decades, if at all.”