Data Centers in Reykjavik

Reykjavik – Europe's Green Power & Cooling Hub

Reykjavik is a specialized market for high-performance computing (HPC), AI, and sustainability-focused enterprise workloads. Its key advantage lies in offering nearly 100% renewable energy and natural free cooling, which significantly lowers operational costs and supports corporate green initiatives. This makes it a prime location for companies prioritizing sustainable and cost-effective data processing over ultra-low latency to major European hubs.

Reykjavik: At A Glance

Network & Connectivity Ecosystem

Carrier Density & Carrier Neutrality: The Reykjavik market is served by over 10 network carriers, as of September 2025. Multiple carrier-neutral data centers provide connectivity options via diverse submarine cables linking Iceland to North America and Europe.

Direct Cloud On-Ramps: There are no public cloud on-ramps located directly in Iceland, as of September 2025. Businesses require private network extensions or IP transit to connect to cloud provider networks in major European hubs like Dublin, London, or Amsterdam.

Internet Exchange Points (IXPs): The Reykjavik Internet Exchange (RIX) is the primary IXP in the market. It facilitates local traffic exchange between Icelandic networks, improving performance and reducing reliance on international transit for domestic data.

Bare Metal: Bare metal server options are available from providers operating within Reykjavik's data centers. These services are often tailored for compute-intensive tasks that benefit from Iceland's power and cooling advantages.

Power Analysis

Average Cost Of Power: Iceland offers some of the most competitive and stable power pricing in Europe. Industrial electricity rates are estimated between €0.05–€0.08/kWh, as of September 2025. This low cost, derived from 100% renewable geothermal and hydropower, provides a significant operational expense advantage for power-dense deployments.

Power Grid Reliability: The power grid is exceptionally stable and reliable, supported by a redundant generation and transmission system. Data centers in the Reykjavik area are well-supported by this infrastructure, ensuring high levels of uptime for critical operations.

Market Access, Business & Tax Climate

Proximity To Key Business Districts: Data centers are located in the broader Capital Region, including Reykjavik and nearby municipalities like Reykjanesbær. This area hosts Iceland's primary commercial, financial, and governmental activities, providing good access to local businesses and a skilled workforce.

Regional Market Reach: While latency to mainland Europe is higher than from hubs like Frankfurt or Amsterdam, Iceland serves as a strategic midpoint for transatlantic data. It is an effective location for disaster recovery, data archiving, and workloads that are not latency-sensitive for European or North American users.

Tax Advantage For Data Centers: Iceland offers specific fiscal incentives to attract data center investment. These programs can significantly reduce the total cost of ownership through tax credits and abatements, complementing the savings from low-cost renewable energy.

Natural Disaster Risk

Iceland has a Very Low overall natural disaster risk profile, with an INFORM Risk score of 1.6 out of 10, as of September 2025. While the country is volcanically and seismically active, its infrastructure and coping capacity are well-developed to manage these specific threats.

Key risks include:

• Coastal Flooding: The most significant rated natural hazard, though modern data centers are sited with this in mind.
• Earthquake: A known risk due to the island's position on the Mid-Atlantic Ridge, with building codes designed to mitigate impact.
• Epidemic: A low-probability, high-impact risk common to all developed nations.