EcoDataCentre snaps up Northvolt site for AI capacity

IT services specialist EcoDataCenter, today [10 September 2024], finalised the acquisition of a portion of the land previously earmarked for Northvolt's EV battery manufacturing facility in Sweden for a 240MW high-performance data centre.

The circa 20-acre plot was acquired from the Borlänge municipality, which assumed ownership of the Northvolt site after the EV battery specialist abandoned its plans for a new manufacturing facility earlier this year [June 2024].

The site benefits from a power supply agreement with Borlänge Energi for the entirety of EcoDataCenter's initial planned capacity of 240MW.

The capacity is expected to be deployed over the next six years and has an associated development cost of €2.5 billion (£2.11bn $2.76bn).

The area was first assessed by EcoDataCenter in 2019 but plans fell through after Northvolt acquired the site.

Northvolt's exit allowed the data centre developer to restart its development plans.

EcoDataCenter expects to finalise contract negotiation with Borlänge municipality by the end of this month [September 2024] and is set to take control of the plot in October.

The developer requires environmental authorisation before it can start construction.

The application for the permit is set to be lodged before the end of the year and has an average processing time of around ten months.

The authorisation is subject to the mitigation of concerns surrounding:

• back-up power generation
• disruption during construction

EcoDataCenter proposes to use Hydrotreated vegetable oil (HVO) – a biofuel – to generate back-up power instead of diesel, which is the current industry standard in Sweden.

The 240MW capacity is expected to be deployed in several tranches, each no smaller than 12MW, according to sources familiar with the matter.

The exact capacity of each tranche will be determined at a later date and will be dependent on the end user/s.

A large chunk of the capacity is expected to be set aside for AI computing.

EcoDataCenter has initiated talks with potential end users in anticipation of locking down agreements in the first half of 2025.

The first capacity tranche is scheduled to come online in 2027.

EcoDataCenter is backed by Swedish fund manager Areim and will use a combination of equity – fronted by Areim funds – and commercial debt to fund construction costs.

The project site is located close to (around 20km) EcoDataCenter's operational Falun campus and is part of a wider industrial estate which used to house the, now-decommissioned, Kvarnsveden Paper Mill.

Northvolt acquired the circa 60-acre plot from forestry manager Stora Enso in 2021 with plans to build an EV battery manufacturing facility at the site.

The project – named Northvolt Fem – was set to have a production capacity of 100GWh with the first delivery slated for 2025.

Northvolt scrapped the projects earlier this year [2024] after German car manufacturer BMW cancelled a €2billion EV battery supply contract over delayed delivery projections.

The site was handed over to the Borlänge municipality, which decided to hold on to 40 acres and sell on 20 acres to EcoDataCenter.

The cancellation of the BMW contract subsequently led Northvolt to also launch a strategic review into its global operations, the results of which were published yesterday [9 September].

In addition to the cancellation of Northvolt Fem, the manufacturer also decided to place its Northvolt Ett Upstream 1 facility in Skellefteå in "care and maintenance until further notice".

The strategic review also resulted in significant job losses at the company.