Data centre a catalyst for Shetland

A £12 million data processing and storage centre proposed for Lerwick has been described as the “enabling infrastructure” on which Shetland is likely to build its digital economy.

Shetland Islands Council on Wednesday said it had signed a memorandum of understanding with the Inverness based IT developer Alchemy Plus to build the 1,200 square metre centre either at the Port Business Park or the Black Hill industrial estate.


The centre will be the first direct investment that comes as a result of the council’s plans to spend around £1.4 million on a connection into the Faroese high speed fibre optic cable that crosses Shetland near Sandwick.

Steve Chisholm, chief executive of Alchemy Plus, said the digital industry was the new heavy industry and Shetland was well placed to benefit from it.

He said both partners were confident that the building, its power supply and the high speed connectivity would be in place before the end of next year.


The company was attracted to come to Shetland because of its cold climate, which would keep down the cost of cooling the data facility, as well as by the fact that an island location offers additional security to storing sensitive information.

Mr Chisholm said the data centre would build on Shetland’s green credentials as it would be powered by renewable energy and would also feed its excess heat into the existing district heating system in Lerwick.

He added that the company’s engineers were working on a four megawatt renewables solution, which would probably be based on wind turbines combined with modern battery storage technology.


Data centre provision in the UK is almost at its capacity and the requirement for more centres is regarded as a major area for growth, he told the meeting.

The hub, which will be fitted with 300 so-called “high density racks”, will bring high speed connectivity to local businesses, provide computer services and act as springboard for further IT development.

Mr Chisholm said: “We decided to come to Shetland because of a combination of resources that Shetland has to offer: fibre optic connections to the outside world that match the best of any other data centre worldwide; renewable energy solutions that provide green and cost-effective energy; and a climate that is extremely stable and cool and which gives low operating cost for the data centre.

“Because Shetland has a very advanced district heating system in Lerwick, the opportunity to connect to that and make positive use of waste heat that traditionally data centres would just expose to the atmosphere.

“It is a very green and cost-effective solution and the islands represent a security and stability that is very attractive to data centre clients from around the world.

Head of economic development at Shetland Islands Council, Neil Grant, said the project was “truly unique”.


“It is very satisfying to see such a multi-faceted project benefit from our past and ongoing commitment to delivering high capacity fibre optic internet connectivity, our innovative district heating scheme and our acclaimed local renewables expertise.

“The data centre is a real catalyst connecting so many key components of our development plan for the future. As an island we may be disadvantaged by location and transport costs, however, within the digital sphere these constraints do not apply and our climate and green energy credentials position us very well within a growing international market for data services,” he said.

Vice convener Josie Simpson added: “We intend to utilise the data centre ourselves, not just to benefit from the financial and operational benefits that such a shared services facility can deliver, but also to ensure that we fully showcase the strengths of the facility to both local and international customers.”