Forecast of effects of Google’s Danish data centre

Google is establishing a large-scale data centre in Fredericia (Denmark). Google already operates four data centres in Europe in St. Ghislain (Belgium), Hamina (Finland), Dublin (Ireland), and Eemshaven (the Netherlands). Large-scale data centres, such as Google’s, represent very large investments, proven to have positive effects on the country and local economy. Google has announced to invest DKK 4.5 billion (EUR 600 million). in Denmark

This note forecasts the economic effects of the Google data centre in Denmark. Our forecast is based on Google’s planned investment for this data centre and past experiences from Google’s other data centres in Europe. We find that:

• The investment will contribute to the Danish gross domestic product and create jobs both in the construction and operation phase.
• Construction is forecasted to support GDP of DKK 1.4 billion per year (EUR 190 million) and will support 1,450 jobs per year (direct, indirect and induced) over the 2018-2021 period.
• Operation is forecasted to support GDP of DKK 590 million per year (EUR 80 million) and will support 700 jobs per year (direct, indirect and induced) from 2021 and onwards.
• Multiple channels of spillover effects in the value chain in the data centre industry are expected, e.g. knowledge gains amongst suppliers, local training activities and the international signalling of a good investment attractiveness for Fredericia and Denmark.
• In addition, Google is investing in better fibre networks, the so-called Havfrue subsea cable, which will improve Denmark’s internet connectivity to North America.
• Data centres are not only good for jobs and growth. Large-scale data centres are also energy efficient and use less energy to deliver a given level of computing power compared to dispersed computing.
• Finally, the data centre will use green energy as Google matches its worldwide electricity use with 100% procurement of renewable energy via PPAs.

We forecast until year 2024. Our forecast of economic effects in Denmark relates to the investment announced so far for Denmark; however, if the data centre is expanded in the future, further economic benefits would follow – as we have seen with Google’s other data centres in Europe.

The study is commissioned by Google

For any enquiries, please contact Managing Economist Bruno Basalisco