After reading the blog ‘Can the Cloud save the environment?’, of fellow BIM student Joram van Rijn, I remembered an interesting news item which I saw a few months ago about the development of data centres in the Netherlands that run on renewable energy. Hence, I made a comment about this and shared my thoughts.
By chance, yesterday evening, the item about the development of giant data centres in the Netherlands using renewable energy was on the news again. In the Wieringermeer, a municipality and polder in the province of North Holland, data centres from Google and Microsoft have been built which fully run on renewable wind energy from the Prinses Ariane Windpark located nearby. For Google and Microsoft, locating data centres in the Netherlands is attractive as they can use renewable energy for making the company ‘greener’. In addition, using the Netherlands as their headquarters provides certain tax advantages.
At first glance, this seems like a very positive development. After all, using renewable energy for the powering of data centres is very sustainable and the fact that these large companies are located here could provide certain economic advantages. However, this does not seem to be the case:
While the development of the Prinses Ariane Windpark was originally meant for empowering 360.000 Dutch households, the data centres of Google and Microsoft currently use 100% of all of the wind energy generated. As a result, locals have been complaining about the fact that these companies use all of ‘their’ promised renewable energy and they only experience nuisance from the park without benefiting. The fact that these households are not able to use Dutch ‘green’ energy and an American company is, does not seem like a positive development to me. Accordingly, the question could be raised what the actual benefit is for the Netherlands if an American company builds a data centre here which uses our renewable energy sources?
One could argue that these data centres provide economic benefits for the government and the involved municipalities, through for example taxes, employment and residual heat. But apparently, Google has directly sold the acquired data centre in order to lease it back from another company via Luxemburg in order to pay as less tax in the Netherlands as possible. In addition, the Google data centre only provides 125 jobs and the temperature of the residual heat is way too low (between 25 and 35 degrees) in order to still use. Finally, the development of the Prinses Ariane Windpark has been heavily subsidized by the Dutch government; in total Vattenfall (the developer) will receive 660 million euros over 15 years. In other words, the Dutch tax payer is paying for the development of a windpark, of which the energy generated is only used by American companies whose presence here does not provide substantial economic benefits for the country as a whole.
In 2019, data centres in the whole of the Netherlands already presented around 3% (4 TWh) of the total electricity consumption (125 TWh). It is expected that by 2030, the data centres of Google and Microsoft in the Wieringermeer will use 8 times more electricity than currently, or around 3.5 TWh yearly. This could possibly provide issues for the Netherlands in concern to achieving their climate goals, as more renewable energy is needed.
Evidently, the development of giant data centres from foreign companies in the Netherlands has significant negative effects without providing significant economic benefits. Moreover, it is expected that under the current circumstances more new data centres will follow. In my opinion, the Dutch government should act as quickly as possible by changing existing regulations in concern to renewable energy use by foreign companies. Providing our own households and companies with ‘green’ energy should be a priority and without providing significant economic benefits for the Netherlands, foreign companies are not welcome.
To conclude, if our small country is to become the hard drive of the world, we certainly need to make sure that we profit from that.
Hollands Kroon. (2020). Zondag met Lubach slaat de plank mis over Prinses Ariane Windpark. Retrieved from: https://www.hollandskroonactueel.nl/2020/10/12/zondag-met-lubach-slaat-de-plank-mis-over-prinses-ariane-windpark/ (Accessed 12 October 2020).
NRC. (2020). Gebroken beloftes: hoe de Wieringermeerpolder dichtslibde met windturbines en datacentra. Retrieved from:https://www.nrc.nl/nieuws/2020/06/05/gebroken-beloftes-hoe-de-wieringermeerpolder-dichtslibde-met-windturbines-en-datacentra-a4001882 (Accessed 12 October 2020).
NRC. (2019). Datacenters verbruiken drie keer zoveel stroom als de NS. Retrieved from:
https://www.nrc.nl/nieuws/2019/05/14/datacenters-verbruiken-drie-keer-zoveel-stroom-als-de-ns-a3960091 (Accessed 12 October 2020).
Zondag met Lubach. (2020). Nederland als harde schijf. Retrieved from: https://www.youtube.com/watch?v=OiPoR9OvD0Y&feature=emb_title (Accessed 12 October 2020).
Hi Yara,
Thanks for covering this interesting subject! The choice of Google and Microsoft to build their data centers here is quite straight forward, hence the perfect circumstances (e.g. infrastructure, stable government, low taxes) in the Netherlands. You stated that the Dutch government must act quickly before all renewable energy is reserved for these multinationals. I totally agree with you that the government must do something about foreign ‘mailbox’ companies that only settle here for the beautiful tax environment, but how should they do that? Unfortunately, changing the tax regulations also means that a lot of other big companies like Shell or Unilever will move away to, for instance, England. These companies provide a lot of jobs and therefore are quite important for Dutch society. With this new development, it seems that the current government approach aims to attract Big Tech companies in the hope that they stimulate job opportunities.
Nevertheless, Lubach showed that this is not really the case. Therefore, I suggest implementing a tax for the renewable energy that Big Tech companies use on Dutch soil. Renewable energy that is being generated by Dutch wind is a quite new phenomenon, which gives possibilities to transform this into a new income stream for the government. Every mh that is used for the data centers should be taxed, which generates a new revenue stream that can be used for other renewable energy projects. Quite double, to be honest, but it seems like a fair way to capitalize on this trend of the government. Eric Wiebes (Minister of economic affairs and climate) probably has a vision for the Netherlands in becoming a perfect settle place for multinationals in the hope that these companies stimulate the job opportunities. Having important data centers for these companies is perhaps the first step before Google and Microsoft decide to open up new offices in the Netherlands. Accordingly, I do believe that we should transform this issue into a new possibility both financial and job-related. Taxes the mh’s that the companies use are a fair way to compensate for the investments of the government in these projects and will hopefully lead to more renewable energy investments in the future. What do you think about this idea?