The new municipal council in Time municipality on Jæren is under pressure. Recently, the company Green Mountain came up with an offer that could have major consequences for the region: Green Mountain will build Norway’s largest data center, create 500 new jobs and funnel a staggering NOK 50 billion into a gigantic project on Jæren. Svein Atle Hagaseth arrived on 9 October with big news at the Jæren Hotel. Photo: news But: Green Mountain will again have a dispensation from the municipality to build on Kalberg, an area which, among other things, contains topsoil and red-listed species. And: The politicians do not get to know who will store data in the data center – and they only get about a month to decide. Do data centers actually create lasting jobs? At the press conference, when the news was revealed, Green Mountain CEO Svein Atle Hagaseth gave a resounding “yes”. – The computer industry in Norway delivers between four and five jobs per megawatt. That is four to five times more than traditional industry in Norway makes, said Hagaseth. The calculation sounds impressive. But the experts news has contacted are not as impressed. Will pay 100,000 fines for every computer job that doesn’t come – Figures we shouldn’t care about Torfinn Harding is professor of social economics and finance at the University of Stavanger. He struggles to understand why the political debate should be about as many jobs as possible. As an economist, he believes it will be wrong. – These are numbers we should not worry about. What we care about is value creation per megawatt and value creation per workplace. Then I would say that it is an advantage to use a little labour, not a lot, says Harding. Torfinn Harding, economics professor at the University of Stavanger. Photo: UIS Like the Green Mountain manager, business association manager Harald Minge in Stavanger also emphasized that data centers lead to “almost three times as many jobs per megawatt as power-intensive industry”. Where do the numbers come from? And which power-intensive industry is used in the comparison? The figures come from a calculation made by the interest organization Abelia. The power-intensive industry in question is the aluminum giant Hydro’s power plants in Sunndal, Karmøy, Årdal, Husnes and Høyanger. Because while the data center that Green Mountain plans to build for Tiktok in Hamar will have 3.4 employees per megawatt, each megawatt employs only 1.1 employees at Hydro’s smelter. Hydro in Sunndal is described as Europe’s largest facility for the production of primary aluminium. Photo: Marius André Jenssen Stenberg The comparison causes Hydro to react. – It will be like comparing apples and pears. Comparing direct employment in two very different industries is imprecise at best, says information manager Anders Vindegg at Hydro. Aluminum from Hydro is used in Europe for, among other things, construction, transport and food – and the computer industry. Director of Communications at Hydro, Anders Vindegg. Photo: www.gudim.no / www.gudim.no Chief Information Officer Vindegg believes it will be too easy to reduce a large export industry to a calculation of jobs and local electricity consumption. – We don’t want to think too much about other people’s investment needs and investments. But it is clear that we will respond when our business is dragged into such a calculation, says Vindegg The data industry’s calculations – and what they don’t tell you Behind the statement “The data industry in Norway delivers between four and five jobs per megawatt. That’s four to five times more than traditional industry in Norway does”, are calculations from the interest organization Abelia: Number of employees per MW in the data center industry: 4.4 Here, Abelia has taken as a starting point the data industry’s overall total consumption of 1.18 TWh in 2018 and the number of direct employed in the computer industry in 2021 – around 600. Number of employed per MW in “traditional industry”: 1.1 Here, Abelia has calculated the electricity consumption of the aluminum giant Hydro, which is 18 TWh, and the number of directly employed, which is 2,244. The same number of employed per megawatts you get if you reduce electricity consumption and employees at the Hydro Sunndal smelter. However, if you do the same calculation with other players in the “traditional industries” category, you get completely different employment: Norske Skog (3.6 TWh, 2140 employees): 5.1 employees per megawatt Elkem (4 TW, 1587 employees): 3.28 employees per megawatt Green Mountain’s planned data center in Hamar will have 3.4 employees per megawatt. Correspondingly, there will be 2.5 employees for the data center at Kalberg. Green Mountain will invest NOK 50 billion in a Kalberg establishment. That is as much as the new hospital in Oslo is likely to cost, and around twice as much as the new hospital in Stavanger will cost. Photo: Odd Rune Kyllingstad Business policy director Nils-Ola Widme at Abelia acknowledges that a value creation effect would be a better goal. – But that is a completely different discussion that will require completely different and more complex calculations, says Widme. Read his full answer further down in the article. NTNU expert: – A big hoax Gaute Bjørklund Wangen is associate professor at the Faculty of Information Technology and Electrical Engineering at NTNU. He has investigated the various data centers that Green Mountain has established in the past, on Rennesøy in Stavanger, Rjukan in Telemark and in Oslo. He does not believe that there will be 500 permanent jobs at Jæren. – Data centers are infrastructure. It is not driving jobs. There will be many jobs in construction and the establishment phase, but in the operation and maintenance phase, there are not many permanent jobs, says Wangen. Gaute Bjørklund Wangen is an associate professor at NTNU, and is described as an expert in information security risk management. Photo: Frøydis Barstad Wangen also reacts to Green Mountain’s suggestion about how many jobs the data center industry creates per megawatt. – This calculation is a big hoax. What do you want to achieve by comparing the number of employees per megawatt, asks Wangen and continues: – There is no linear correlation between megawatts and employees. It says nothing about value creation. It doesn’t make sense, says Wangen. In a report written on behalf of Green Mountain and Lyse from 2020, consultants estimated that a data center at Jæren could create up to 8,300 jobs. By 2023, Green Mountain promises at least 500 jobs. Photo: Ole Andreas Bø Green Mountain: – At best based on a lack of knowledge Svein Atle Hagaseth in Green Mountain confirms in an e-mail to news that the figures he showed about megawatts and employment came from Abelia. – These figures are also in good agreement with the experiences of our own organisation, writes Hagaseth. The Green Mountain summit has previously disagreed with NTNU expert Wangen in the media (external link). Hagaseth points out that data centers are advanced infrastructure that need daily follow-up and that cannot be controlled remotely. Then many employees are needed on the ground. – As regards the statement of Gaute Bjørklund Wangen, it is at best based on a lack of knowledge about the type of data centers we operate, writes Hagaseth. The data center manager gives several examples of what he needs people for at Jæren and Hamar/Løten (see fact box below): This is what Green Mountain needs in its data centers: Most people who want to work at Green Mountain’s Tiktok data center in Hamar will be operating technicians. These are professionally trained people who will work day, evening and night on a rotating basis in: Electrical, mechanical, automation, computer electronics, cooling technology, pipes/HVAC, telecoms, fibre, high voltage and major infrastructure. In addition, data centers need other professional groups to keep operations going: Round-the-clock staffing in cleaning and security. On top of this are employees in: finance, HR, managers, training, canteen and administration. Source: Svein Atle Hagaseth (CEO of Green Mountain). To keep the data centers running 24/7, all year round, people are needed for power supply, cooling and physical security. Professionals are needed from Green Mountain, the customer and a range of support services in cleaning, canteen and administration. – There is nothing that just happens by itself continuously in a data center. Thinks power-intensive industry will come out better Earlier this year, Menon Economics delivered an analysis to Green Mountain about the ripple effects that a data center establishment in Hamar would bring. However, that does not mean that Green Mountain and Menon Economics have reached the same conclusion about what data centers bring with them in terms of jobs. While Green Mountain claims that the data center industry employs more people per megawatt than power-intensive industry, Menon partner Jonas Erraia’s calculation shows the opposite. – In an analysis for the county council in Nordland, we found that the employment effects for traditional industry are several times higher than those for data centres, says Erraia. The table from Menon Economics provides an overview of ripple effects per gigawatt hour (GWh) of energy consumption for four power-intensive industries. Here data centers come out worse than traditional industry measured in workforce per GWh. Photo: Menon Economics (2021) He thinks Green Mountain’s estimate of 500 employees in the data center establishment sounds realistic. If anything, the margin appears conservative, says the Menon partner. But employment is not the primary benefit you should look for in a data center. There are other factors that should weigh more heavily. Jonas Erraia is a partner in the consulting company Menon Economics. Photo: Menon Economics – There is a great need for IT infrastructure today, and this will only grow in the years to come. This requires significant investment in data centres, says Erraia, who points to renewable power and greater control over stored data as the main advantages of setting up in Norway. Abelia: – Our figures have been created as a response. Abelia is behind the calculations used by, among others, Green Mountain and the Business Association in the Stavanger region on the employment effect of data centres. The interest organization believes the figures are relevant. – Electric power is a scarce commodity in the Norwegian economy, which must be used where it has the most value. Such a return target will be an employment effect, says business policy director Nils-Ola Widme. Nils-Ola Widme is business policy director at the interest organization Abelia. Photo: Ilja C. Hendel / Ilja C. Hendel Is it relevant to compare a data center with traditional industry? Yes, says Abelia, who believes that data centers are more like traditional process industry than an IT company. Widme points out that data centers are workplaces that require people with the same qualifications as employees on an oil platform. – Our figures are created as a response to a claim that data centers create few jobs. It’s wrong. Beyond the fact that data centers are crucial infrastructure in an increasingly digitized society, we believe the figures debunk the myth that data centers do not contribute to employment, says Widme.
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– It’s like comparing apples and pears – news Rogaland – Local news, TV and radio
