News: Verne and Landsnet launch high capacity substation

19 May 2025 – Keflavik, Iceland 

Verne and Landsnet today switch on the largest privately owned substation on the Reykjanes Peninsula. The move marks another milestone in building scalable, sustainable infrastructure for high performance computing (HPC) and data centers in Iceland.

“This substation unlocks our next phase of growth and support the increasing demand for compute capacity. The Keflavík community and Landsnet’s engagement in this really show that this is the right country for data center investment. But this is about more than responsible growth for us – it's about putting down deeper roots in Keflavik long-term and strengthening our ties to the community,” said Styrmir Hafliðason, Managing Director, Verne Iceland.

As AI, machine learning and HPC workloads accelerate, access to large-scale, reliable low‑carbon power is becoming critical. According to Íslandsbanki, Iceland’s data center sector is already seeing strong momentum: export revenues from telecommunications, computer and information services reached around ISK 110 billion in 2025, up 50 percent year on year. With colocation demand set to more than double by the end of the decade, the need for new capacity is only increasing.

“Landsnet welcomes the new substation as part of the continued development of infrastructure in the area and looks forward to continuing our 15-year business relationship with Verne. The data center industry is growing in Iceland, and Landsnet will keep engaging with local municipalities and relevant stakeholders to ensure the grid is prepared to meet future demand,” said Ríkarður Ríkarðsson, Deputy CEO of Landsnet.

The wider sector is expanding rapidly. Data from Íslandsbanki shows export revenues from telecommunications, computer and information services reached around ISK 110 billion in 2025—up 50 percent from 2024. The colocation market is also set to grow strongly, with estimates pointing to a doubling in value by the end of the decade, supported by occupancy rates above 95 percent.

The new 1,500 square meter substation connects to Landsnet’s existing substation and will deliver up to 240 MW of installed capacity, meeting the fast-rising demand for sustainable data centers.

Kjartan Már Kjartansson, Mayor of Reykjanesbær, welcomes new investments that enable the future growth of data centers.

“Data center development on the scale that Verne brings is highly significant for Reykjanesbær, not only because it creates new jobs and supports additional tax revenues, but because it also opens up new opportunities for local businesses and supporting industries, from construction and logistics to IT, education and specialist”, Kjartan Már Kjartansson.

Construction of the new substation began in summer 2023 and now enters its first operational phase. The facility has been designed to deliver robust, zero-emission, high-capacity power to support the next generation of energy-intensive workloads.

Additional information
Verne
Jonas Eklund
jonas.eklund@thepr.network
+46704-939697

Contact, Landsnet
Sindri Rafn Sindrason
sindrirafn@landsnet.is 
563 9300 

Mayor’s office and Reykjanesbær municipality
kjartan.mar.kjartansson@reykjanesbaer.is
reykjanesbaer@reykjanesbaer.is
+354 421 6700

Additional technical information on the new substation
The substation is connected via transmission lines from Njarðvíkurheiði and will also connect to Landsnet’s Fitjar substation by the end of 2026. The project includes approximately 1,600 [insert unit] of integrated cable infrastructure. This dual connectivity ensures a stable, redundant power supply from Iceland’s 100% renewable energy grid.

It will reach a total capacity of 240 MW by the end of 2026 according to plan, with an initial 120 MW already operational.

The substation is purpose-built across two levels: a basement and a ground floor, with clearly defined zones designed for resilience, safety and operational efficiency:

• A dedicated 11 kV switchgear room with an integrated control center on the western side of the building
• A centrally located high-voltage hall centrally managing incoming power distribution.
• Transformer rooms in the eastern section, each equipped with advanced flood protection systems.
• A cable basement and multiple sprinkler and pump systems, supporting five independent fire protection systems across the facility.

All transformer areas are equipped with flood protection systems, while critical operational zones such as control rooms, entry areas, and staff facilities are insulated for efficiency and safety. Heat-generating electrical components are housed in non-insulated high-voltage and transformer halls to optimise thermal management.

The facility also incorporates multiple access and safety features, including controlled entry from the north, internal basement access via the control room, external access to fire protection systems, and clearly defined emergency exit routes.

About Verne  
Verne provides low-carbon high-density data center solutions that enable organisations to cost-effectively scale their digital infrastructure while reducing their environmental impact. The company’s Nordic data centers, located in Iceland and Finland, are powered by 100 percent renewable energy, optimised for high-performance computing (HPC), artificial intelligence (AI) and other resource intensive workloads, and supported by a dedicated team of onsite experts. Verne also operates a hyper-connected data center in central London, which serves as a strategic hub for applications requiring low latency and robust connectivity. 

About Landsnet  
Founded in 2005, Landsnet hf. owns and operates all major electricity transmission lines in Iceland. The transmission system consists of power lines with voltages of 66 kV and higher, some 33 kV lines and all major substations in the country. The vast majority of the company’s transmission lines are overhead lines, and the largest part of the Grid’s transmission infrastructure operates at a voltage from 66 to 220 kV.

A large part of Landsnet’s business involves the operation and maintenance of the electricity transmission lines and transformer stations that it owns. As a Transmission System Operator (TSO), Landsnet also has a system-wide responsibility for the entire Icelandic electricity system.