Iceland Takes Hard Look at Tech Boom Sparked by Its Cheap, Bountiful Power

Steaming geysers, dramatic waterfalls and icy landscapes lure millions of tourists to this country every year. Now its geology is fueling a computer tech boom.

But the voracious electricity demand of Iceland’s proliferating data centers is testing the island nation’s environmental ethos.

Iceland’s Nordic climate and the geothermal steam rising from the tectonic fault line that runs beneath it provide two things the computers that run world’s economy need in seemingly endless supply: cooling and electricity.

By 2030, data centers and all internet-related activity—from streaming video to analyzing financial data to storing software, photos and emails—could use more electricity than all of China did this year, according to a study from the Western Norway Research Institute and Huawei Technologies Co. Iceland is becoming the bleeding edge of the world’s newest power-hungry industry.

Iceland’s first environmentalist government is now considering ways to slow the rise of data centers in the country by reviewing its rulebook for adding new power plants. Many lawmakers say they worry the tech boom is putting Iceland’s pristine nature at risk—the crux of its crucial tourism industry.

“When you get down to it you are dealing with extremely rare and beautiful places, delicate places,” said Andri Snaer Magnason, a poet, activist and third-place finisher in Iceland’s last presidential election. “The expansion of the current grid is quite painful.”

The…

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