GENEVA

A sharp increase in data center construction in Finland could raise average annual electricity prices by about 10% within the next five years, according to a recent government-commissioned study.

Public broadcaster Yle News reported that the study conducted by consulting firm AFRY assessed the economic and energy impacts of proposed data center projects amid growing political debate.eu

It found that if electricity consumption by data centers rises to around 2,500 megawatts by 2030, more than eight times the current level, power prices would climb even if electricity production increases at the same rate.

AFRY calculated that during approximately 100 hours per year, data center demand could push hourly electricity prices above 50 cents per kilowatt-hour, with peaks reaching up to 90 cents during about 30 hours. This would result in an overall annual price increase of roughly 10%.

The findings, according to the report, have sparked political scrutiny. Finance Minister Riikka Purra warned in parliament that large-scale projects risk driving up electricity costs, while Prime Minister Petteri Orpo told Kauppalehti that the government is considering tax incentives, stating that data centers are needed in Finland.

Finland currently hosts data centers that use around 300 MW of power, but interest from international technology firms has grown, partly due to the country having the second-lowest electricity prices in Europe last year.

AFRY said price rises could be avoided if operators commit to reducing consumption during peak demand or invest in their own energy production, such as batteries or backup generators.