Facebook joins the Arctic crowd

(CNNMoney) NEW YORK -- -- The northern Scandinavian landscape is dotted with fjords, lingonberries and, if you believe some locals, elves. But another sight is increasingly common on the Arctic horizon: data centers.

Drawn by the promise of lower electricity costs, a growing number of tech companies are harnessing the region's abundant cold air to cool their servers, cutting expensive air-conditioning out of the equation.

Facebook, the latest tech company to take the polar plunge, announced this week that it will build a data center just south of the Arctic Circle in Lulea, Sweden, where the average low in January is 3 degrees Fahrenheit.

The facility, a set of three 300,000 square foot buildings, is the social networking site's first data center outside the U.S. It's scheduled to be operational by 2012.

Lulea's dry, frigid weather "definitely is a big part" of the company's decision to build there, Facebook spokesman Michael Kirkland said. Using outside air to cool servers is "absolutely beneficial not just from an environmental perspective, but also from a cost perspective."

Analysts agree. There are "overwhelming financial advantages" to building in the far north, according to Rakesh Kumar, an analyst with Gartner.

Utilizing free outside air can result in "tens of millions, if not hundreds of millions [of dollars], of savings per year" for each site, Kumar said.

Data centers are among the most ravenous energy eaters around. They were responsible for about 1.3% of the world's electricity use in 2010, according to a recent study conducted for the New York Times by Jon Koomey, a consulting professor at Stanford's Department of Civil and Environmental Engineering.

And it usually takes roughly as much electricity to cool the servers as to power them. Conventionally, data centers have been cooled via chillers: heavy-duty air conditioners that pass air across cold pipes.

"For every kilowatt hour of electricity that goes to the server, there's another almost one kilowatt hour that goes to cooling and fans and pumps," Koomey said.

Facebook's Swedish data center will have company from other tech giants in Scandinavia.

In 2009, Google (GOOG, Fortune 500) bought a defunct paper mill in Hamina, Finland, and converted it into a data center that cools the servers it houses via seawater pumped in from the Bay of Finland.

And later this year, British data center developer Verne Global will open on a former Icelandic NATO base a large facility it bills as the first "zero emissions data center."

Ragnar Horvardarson, a spokesman for the Iceland Chamber of Commerce, said that the Verne Global facility is Iceland's first data center, but he's aware of four more in various stages of development.

It's not just the brisk air that's luring Silicon Valley to Scandinavia. Relatively abundant renewable energy options make building there attractive. And for an American company like Facebook, housing servers in Europe can cut down the number of milliseconds it takes a Czech Facebook user to "like" a friend's status.

Conventional incentives like tax breaks may be at work, too, Kumar speculated: "I wonder if this is perhaps more driven by some commercial considerations than perhaps what's good for the environment."