Professor says data centres will raise household electricity bills

Data centres will push up household electricity prices even if new power generation is built to meet their demand, a professor said on Yle’s A-talk programme on Thursday.

Lassi Linnanen, a professor of environmental economics and management at LUT University, said the global investment driven by the artificial intelligence boom amounted to “one or two per cent” of global gross domestic product. He warned that Finland risked becoming a “banana republic” for data centres, supplying land and cheap electricity while the companies’ financial activity and profits went elsewhere.

Antti Poikola, executive director of the data centre industry, argued that the centres could support economic growth and exports by creating demand for companies that serve them. He also said they could enable new electricity generation. Google, he said, had played a significant role in the development of wind power built without feed-in tariffs.

Poikola said Finland had Europe’s cheapest electricity and that households concerned about market prices could choose fixed-price contracts at around 10 cents per kilowatt-hour.

Linnanen said higher electricity demand would bring higher prices even if it prompted new supply. Ilmatar, Finland’s largest wind power producer, has said contract prices must rise for new wind farms to be profitable. Those contract prices set the market’s minimum level, Linnanen said, adding that higher contract prices would also raise consumer prices.