Finnish data centre projects stall over proposed grid access law

Many early-stage data centre projects in Finland are on hold because a proposed change to the Electricity Market Act could make it harder to secure a connection to the power grid, Yle reports. The industry association warns that some projects could be cancelled or moved elsewhere.

Early-stage projects are those without a construction permit or a grid connection agreement. Antti Poikola, executive director of the Finnish Data Center Association, said a large share of these projects are now waiting for clarity.

Scale42 has paused plans for a data centre in Puhos, an industrial area in the city of Kitee in North Karelia. The company is still committed to the project, according to Kitee Mayor Pekka Hirvonen, but uncertainty over securing a power connection requires further consideration. Yle was unable to reach Scale42 for comment. The newspaper Karjalainen first reported the delay.

The proposed law, due to take effect at the start of next year, would divide applicants for grid connections into four categories. The planned liquid-cooled artificial intelligence data centre in Kitee would be placed in the third category, near the back of the queue. The company would not receive an assessment of its connection agreement until the end of next year, and has therefore not proceeded with construction preparations.

“Project developers need to know in advance whether they will get a grid connection and the capacity they need,” Hirvonen said.

Kitee’s city government granted the project a deviation permit in July, allowing the company to apply for a construction permit before a zoning change is completed. Scale42 had originally planned to start construction around the turn of the year but has not yet applied for a permit.

The city has leased the company a 10-hectare plot in Puhos and carried out groundworks. Under the agreement, the city will sell the plot to Scale42 before construction begins. Hirvonen said the project has not cost the city money: Scale42 is responsible for construction costs, while the city has received income from selling soil removed during the groundworks.

If completed, the data centre could bring the city hundreds of thousands of euros a year in property tax revenue and around 50 direct jobs, as well as indirect employment. The city also has plans to use waste heat from the centre. Hirvonen said Kitee has contingency plans if the project falls through but did not disclose details.