Electricity Prices May Soar – Google Wants to Build Massive Data Center in Timrå

Tech giant Google has expressed interest in establishing one of Europe’s largest data centers in the Torsboda industrial park outside Timrå. The plans are already raising concerns that electricity prices in the region could rise sharply.

According to reports, Google wants to purchase industrial land in Torsboda for 911 million SEK to build a facility intended for heavy AI computations. If the deal goes through, it would be one of the largest of its kind on the continent.

The background is simple: northern Sweden has historically had some of the country’s lowest electricity prices, and it is precisely this advantage that the tech company wants to exploit.

The energy requirement is expected to be enormous. The facility is projected to, in time, consume around 1,000 megawatts — equivalent to the electricity use of nearly three cities the size of Uppsala — with the potential to expand to a total of 2,000 megawatts.

MP Peder Björk (S) from Sundsvall sees the low electricity price level in the north as a competitive advantage that the region should leverage.

Risk of Higher Electricity Prices

The municipalities of Sundsvall and Timrå, which jointly own the industrial park, have not yet made a decision on the development. A decision is expected in the fall. But fears about what such a power-intensive facility would do to prices in electricity price area 2 have already emerged.

Daniel Gustafsson, head of department at Svenska kraftnät, is clear that a facility of this size risks affecting consumers unless it is combined with new electricity production.

He argues that the requirement for the developer should rather be to contribute with its own production than to let the market alone dictate the outcome. According to him, public concern in the area is fully justified.

Christian Söderberg, CEO of Torsboda Industrial Park, points out that this issue is already regulated in the agreement with Google. According to him, the company will reinvest in its own energy production for the benefit of the Sundsvall region.

Gustafsson also stresses that the price effect is inevitable if capacity is added without simultaneously increasing production.

– If you introduce such a facility without adding new production, it will affect the electricity price, said Daniel Gustafsson, head of department at Svenska kraftnät.

Visualization of Torsboda Industrial Park. Press image

Jobs Promised – Government Refers Further

The municipalities and Torsboda Industrial Park state that the establishment could create around 500 jobs, but Google itself has not provided any figures on employment effects.

Energy Minister Ebba Busch has declined to comment, instead referring to an ongoing government assignment where Svenska kraftnät, among others, is to ensure power supply for electricity-intensive companies without affecting household prices. Google has also not answered questions about why the company chose Torsboda specifically or how it views local energy supply.

Previous Failure

Similar attempts and hopes have occurred before. In 2023, Samnytt reported how the government admitted failure with the data centers, which did not generate any notable jobs. The previous Social Democratic government also gave IT giants massive tax breaks, which turned out to be costly for Swedish taxpayers.

In 2022, social media giant Facebook posted record profits in Sweden, close to SEK 4.5 billion. However, they paid basically no taxes — less than a regular newsstand.

The company’s servers consumed enormous amounts of electricity and got it almost for free while Swedes paid sky-high prices. The counter-performance was to create many jobs in Sweden, but this promise was not fulfilled — Facebook only employed 65 people in Sweden.