Concession power is a statutory right for municipalities to purchase a portion of electricity produced in local power plants at a reasonable price, often called cost price. The scheme originated in the early 1900s as part of a social contract between the state and local communities: when a municipality gives up valuable nature, dams rivers, and submerges large areas to produce power for the wider society, it should retain some of the value creation. The goal was for municipalities to have access to cheap power to build up local business and secure electricity for residents, making it attractive to live and run businesses in rural areas.
The law states that municipalities can only use concession power for what is called 'general electricity supply'. Until now, data centres have been considered as general supply. The government now defines data centres as industry, placing them in the same category as large factories such as Hydro or Elkem.
Heavy industry has traditionally not been entitled to concession power because their enormous power needs would swallow all the power available to the municipality. By moving data centres into the industry category, municipalities lose the right to use their cheap power quota as bait to attract such companies to establish locally. 79 TWh of energy in 2025, slightly more than one-fiftieth of the country's consumption.
4 GW for them, representing over 8% of installed capacity. The Norwegian government aims for the data centre industry to be sustainable with a low climate and environmental footprint, and the country has good access to renewable electrical power and a cold climate, making it well-suited for data centre establishments. According to the Norwegian Water Resources and Energy Directorate (NVE), Norway will continue to have a positive power balance in a normal year until 2030, though power consumption is expected to continue rising over the next five years, albeit at a slower rate than previously forecast.
Members of the Norwegian Data Centre Industry (NDI) have signed the Climate Neutral Pact, committing to be climate neutral by 2030, and nine of the 18 largest data centres in Norway have heat recovery, mainly local systems. 6% of Norway's total electricity consumption of 140 TWh, with data centres accounting for around 41% of that digital infrastructure consumption, according to the Norwegian Communications Authority. 79 TWh in 2025, making it difficult to assess the actual growth trajectory.
Global demand for AI is driving a surge in energy consumption. AI models, especially large language models and generative AI, consume huge amounts of electricity. The International Energy Agency (IEA) estimated that the power needed for computing increased a billion-fold from 2022 to 2024, and the entire global energy sector is changing because of high electricity demand to run and cool servers.
Polite but unnecessary 'thank you' or 'please' messages cost OpenAI tens of millions of dollars in electricity each year.
5% of global electricity consumption, and the IEA estimates that this will double in the next five years, reaching a level comparable to Japan's entire electricity consumption. Developments in AI are driven by just a few technology companies, with control concentrated in the hands of a few private enterprises, according to Sebastien Gros, a professor at NTNU. Companies supplying electricity to data centres do not disclose exact electricity usage figures, and AI providers have little interest in sharing this information.
com, Sam Altman described that polite but unnecessary messages cost OpenAI tens of millions of dollars in electricity each year. Norway's Minister of Energy Tina Bru proposes requiring data centres and large electricity-powered plants to analyse whether they can utilise surplus heat. The proposal sets stricter requirements than the EU, including data centres with output over 2 MW, whereas EU requirements apply to thermal plants over 20 MW.
However, the proposal does not make it mandatory to act on the analysis even if waste heat utilisation is profitable. The government notes that extensive electrification for the green shift will require more networks and increased power production, and electricity prices may increase. Data centres are considered a power-intensive industry and may receive energy tax cuts.
Major data centre projects are underway in Norway. TikTok hosts 50,000 servers near Oslo in a 90-MW facility, with plans to expand to 150 MW. Google is building a facility of up to 240 MW in southern Norway, slated to enter service this year, dedicated to cloud storage.
OpenAI plans to open a data centre of up to 290 MW in Narvik at the end of 2026. Green Mountain built the TikTok facility and also develops server farms in Germany and England; Aker is building OpenAI's Narvik project. In southern Norway, one kWh costs about 10 euro cents; the government introduced a fixed-price scheme capping price at 50 øre (5 euro cents) until end of 2026, allocating almost 1 billion euros.
In northern Norway, electricity is much cheaper at around 30 øre per kWh at market prices. The reclassification raises questions about how it will affect Norway's ability to attract future data centre investments compared to other Nordic countries, and what the expected impact on local electricity prices and grid capacity will be in municipalities that lose the ability to offer concession power to data centres.