The aim of this study is to determine whether Facebook's establishment in Luleå has increased welfare. The essay also gives possible suggestions on how the state can increase profitability when considering future establishments. The thesis focuses on the period when Facebook’s two data centers were established, that is 2011-2020. The thesis mainly uses data from various public inquiries and government agencies. An interview with a professor in electricity production is also conducted to create a deeper understanding of the server halls' impact on electricity production in Sweden. To determine whether the establishment of Facebook has increased welfare, a cost-benefit analysis is used as a method and theory. Furthermore, data centers and their impacts will be defined in chapters three and four as a basis for the calculation. In the calculation, we will compare benefits and costs. Benefits need to exceed costs for the project to be profitable. Whether the establishment has been profitable is examined from three perspectives: overall, national, and regional. Unlike the national and regional calculations, only costs are considered in the overall calculation. Based on assumptions that Facebook's data center has a lifespan of 10 years, with a discount rate of 3.5 percent, it can be stated that the total cost for the project will be - SEK 14 673 137 420 - H - W in the overall calculation. For Facebook's establishment to be profitable, the overall benefits need to exceed the costs. According to the national calculation, Facebook's establishment based on monetary posts. is profitable as the net present value is positive and equals SEK 12 636 712 128. The non-monetary effect, the risk of electricity shortage, leads to a decrease in the net present value in the national calculation. However, we believe that it is unlikely that the cost of the risk would exceed SEK 12 billion and thus we consider the calculation to remain profitable despite the risk. From a regional perspective, Facebook's establishment is profitable if the non-monetary benefits outweigh the costs of the destroyed landscape and the risk of electricity shortage. According to the sensitivity analysis, Facebook's establishment is a cost to the state as the costs for the public sector exceed the tax revenues. Marginal excess burden, MEB, is used to calculate whether the project loads the state budget. Since we choose to use a MEB of 0.3, it can be stated that the value of the overall calculation is increased with - SEK 2 855 377. The other effects in our calculations such as operating costs, maintenance costs, use of electricity, economic growth, and landscape image cause uncertainty in our calculations which is also described in the sensitivity analysis. Finally, the study proposes five different suggestions to have in mind when future data center establishments are being planned in Sweden.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:liu-176912 |
| Date | January 2021 |
| Creators | Högdahl, Emma, Lantela, Anniina |
| Publisher | Linköpings universitet, Nationalekonomi, Linköpings universitet, Filosofiska fakulteten |
| Source Sets | DiVA Archive at Upsalla University |
| Language | Swedish |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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