FDI

A New Frontier for Energy Intensive Industries

jamieharrison 15th October 2017

In the wake of digitalisation, globalisation and the call out for a sustainable future, a new type of international industrial landscape is emerging. Entire industries and infrastructures are being totally disrupted. New players with new ways of thinking are revising the way we, as global citizens, consume the services of tomorrow. In just a few years, new global players such as Amazon, Google and Tesla have become leading super-companies that are altering the very logic of the industries in which they operate.

But while digitalisation and electrification provide unparalleled opportunities for value capture,they also bring major societal challenges: How to construct and power the rapidly growing global digital infrastructure, how to handle exploding amounts of data being used and how to produce and provide the energy systems of tomorrow.

“Sweden has a history, as well as a future outset to spur growth and innovation.”

The problem is that emerging industries are extremely energy-intense, while today’s industries already struggling to reduce emissions to the extend necessary to avoid dangerous climate change..Behind the scenes however, a global race for industry leadership in this new paradigm is taking place. Decision-makers around the world are hunting for sites, cluster organisation companies with solutions that can offer large amounts of green and affordable energy. While the hard facts are important, competitive edge is also found in key competences and partnerships that support these companies in growing their operations, with the aim of global leadership.

A country looking to serve as a key node in this new emerging global landscape is Sweden. The vast country in the North of Europe has the vision to use its favourable location factors to facilitate and help accelerate the growth of global energy-intensive industries. A vision shared in strategy and activated in practice between national and regional governments, industry and academia.

Node Pole CEO Patrik Öhlund explains further:

“Sweden has a history, as well as a future outset to spur growth and innovation. It´s part of our genes and common culture to drive commerce on a global level. What we are doing now is simply to use opportunities from technology, combined with our strengths to make it even easier for global organisation companies to invest, innovate, grow and find new markets with Sweden as a global node” Via the dedicated investment support organisation and digital investment platform, Node Pole, Swedish investment sites and regions, the national investment authority, industrial partners and other stakeholders are all gathered under one roof, to make it easier for both larger corporations and smaller entrepreneurial champions to actually play a part, in the way that suits them best – and find solutions, sites and partners tailored to their own needs. With a tailored support organisation, one point access, and a dedicated digital investment platform, global investors can quickly find and set up operations whilst also being able to plan for the long term.

A proven business case that received much international attention was the establishment of Facebook’s first data center outside the U.S. in Luleå, in the north of Sweden, six years ago. Since then, growth has taken off rapidly in several sectors. Earlier this year, Amazon Web Services announced that they will open several data centers around Stockholm. Just this year Sweden was chosen as the location for Europe’s first mega scale battery production plant, with operations starting in 2018. Meanwhile, an impressive number of data centers, technology giants and startups are setting up shop in different clusters throughout Sweden. And there is more to come.

Green energy – a precondition for growth
The emergence of new industries in Sweden comes as no surprise when looking at Sweden’s electricity price as it’s the lowest in the European Union. This year, the Swedish government even decided to reduce the electricity tax for data centers – which are now included at the same preferential as other industries. As a result, a typically sized energy intensive operation (10MW and 8000 full load hours per year) saves ca €7.1 million each year on energy alone, as compared to locating in the U.K.

What makes Sweden even more interesting, is that almost all energy in Sweden is renewable. Wind, and particularly water power plants, produce vast amounts of energy, more than the country itself can consume today. This creates a strong financial case: Producing one kilowatt hour of electricity (kWh) in Sweden equals as little as 20 grams of carbon dioxide emissions, to be put into comparisons with e.g. China (900 grams), the US (200 grams) or Germany (425 grams). For Swedish hydro power, which powers most new establishments, the figure is as low as 0.4 grams per kWh.

Competence & market access
With the right preconditions for industry growth and dedicated resources to guide investors throughout their journey, the joint vision is to always offer growth conditions and solutions aligned to the needs of next generation entrepreneurs – incl. key competence, infrastructure and market access as well as opportunities for open innovation.

“The key thing is to find the right balance between providing the right conditions and letting industry leaders lead the way, according to their own visions. In essence, it all comes down to securing both scalability and flexibility for actors who foresee immense growth in the years and decades to come. And from the global industries themselves, we know that it´s easy access and long-term growth conditions that they are looking for” concludes Patrik Öhlund.

About Node Pole:
Node Pole is a joint-venture owned by public power utility companies Vattenfall and Skellefteå Kraft working fully integrated with the Swedish investment authority, Business Sweden. Together with Sweden’s sites, municipalities, research institutions and government authorities, Node Pole serves as Sweden’s central commercial investment & development hub for energy-intensive industries.

• One stop shop for energy intensive investments

• Digital platforms as well as consultancy services to compare and develop investment solutions

• Dedicated expertise for establishment processing

• Fully integrated between sites, regions and Government authorities

• Team of experienced and dedicated professionals

• Node Pole Alliance – dedicated network of global and local industry leaders

• Node Pole Academy – certification and quality assurance of site and solution offerings

Explore & compare industrial sites – all in one app
Sweden’s location factors for energy-intensive industrial investments are among the best, if not the best in the world. However, the race to build the digital infrastructure is in full speed and many countries all over the world want to get a share of this quickly evolving market. In Sweden, key factors are giving investors the scalability and flexibility to establish operations quickly, as well as being able to grow long term..

Node Pole’s Chief Marketing Officer, Christoffer Svanberg, explains

“To set Sweden apart from the competition, we realised the importance of not only talking about Sweden’s superior conditions, but giving global investors the opportunity to find out for themselves.”

After having worked for several years, helping global investors to attain comprehensive and comparable site offerings and solutions within data centers, energy storage and material production, Node Pole and Business Sweden grew frustrated with the slow-paced global industry dynamics when it comes to global industrial investments. Slowly, the vision for a more investor-centric approach to industrial investments came together and the idea of a digital platform to serve as a one stop shop was born. Only months later, in October 2017, the Node Pole app and web-application is ready and launching as a first step towards this vision.

“This tool is unique worldwide and it is the essence of what Node Pole is about – making industry establishments into Sweden as easy as possible, while also promoting Sweden globally as the prime location for industry establishments”.

As Christoffer explains, the key thing is to find the right balance between standardising quality assured statistics and KPIs, while also making it easier for investors to ask their own questions and compare solutions according to their own particular needs. Using the Node Pole app, which is free for anyone to download and use, finally decision makers and investors get an industrial version of eBay or Amazon Marketplace in a sense. When the user of the tool wants to find out more about specific sites, regional or national conditions, a dedicated team is there to coordinate and respond to make the experience quick and effective between various actors.

Investments made as easy as 1 -2 – 3
Simply by using the Node Pole app, one can filter parameters, find suitable sites, compare them with each other and against the different sites all over Sweden – all based on a set of key parameters, e.g. site properties, logistical aspects, climate and latency. Importantly, the app also lets users flag interest and send requests for additional information – so-called Additional information Requests (AIR) – directly to site owners.

The app does not only show numbers, it also provides interactive content, such as aerial videos for each site, captured by drones filming each site and its surroundings – all in all providing a comprehensive comparison of investment options.

“The ambition for the app was to transport a feeling for each site beyond plain numbers, we also wanted to decrease the emotional distance between potential investors to Sweden. Our joint ambition is to connect people and businesses all over the world with Sweden as a key node. An important part of this is to increase transparency and decrease distance for investors”, Christoffer comments.

Investors range from small start-ups in tech industries to mega-scale production facilities, such as giga factories and data centers. A common challenge for all such actors is to get a comprehensive overview to find actual sites and solutions.

“Even if it is smaller firms looking for quick solutions or gigantic multi-billion dollar investments with several years of lead time and dedicated location consultancies, the common challenge everyone shares in the global investment community, is the difficulty to actually be able to identify location options about sites and clusters, and to assimilate quality assured information accordingly. We want to put this to the past and let tomorrow’s leaders focus on their growth and innovation instead”, says Christoffer.