Background

Ireland’s attractiveness for data centres is down to a mix of a cool climate, tax incentives, and access to transatlantic data cables. Today there are 82 data centres with 14 more under construction and a further 40 have already secured planning permission. Data centres will account for 33% of electricity usage by 2026.

Despite a frenzied focus on the importance of green energy, we’re making very little real progress in Ireland. Of the extra energy created by renewables in 2023 was consumed by data centres. The supposed “energy crisis” we see today is an extraordinary, manmade mess and one that could have been avoided with proper planning and oversight. The challenge the data centres pose from an energy consumption perspective did not materialise overnight.

As early as 2013, Microsoft invested heavily in adding 4 acres to their data centre in Dublin. 4 acres of computer servers – that’s a lot of servers. In 2015, according to the Central Statistics Office (CSO), data centres accounted for 5% of all of Irish electricity. By 2016, Ireland had 33 multinational data centres.

The runaway train

In 2018, the government published a policy statement on data centres, recognising them as critical infrastructure. Launching the Statement, Heather Humphreys, the Minister for Business, Enterprise and Innovation, said that data centres are key enablers for the digital economy:

“The demand for data centres is there and this Policy Statement is about having a coherent strategic plan in place to deal with that demand. This is a joined-up, cross-government approach on their development in Ireland.”

A “coherent strategic plan to deal with demand“, “a joined-up, cross-government approach“.

It all makes for a pretty press release and nice sound bites but let’s take a look at how that coherent, strategic, joined-up, cross-government plan played out in reality over the next few years:

• In 2019, the Commission for Regulation of Utilities warned that the rapid growth of data centres could lead to supply challenges. What exactly they did to address or pre-empt this challenge at the time isn’t clear.
• By 2020, data centre consumption had more than doubled to 11% by which point they had already matched rural dwellings which consume 12%.
• In 2021, data centre consumption rose again to 14% and the CRU recommended an additional 2,000MW of flexible gas fired generation amongst other measures.
• By 2022, the % of metered electricity consumed by data centres was 18% in 2022. It was at this stage, in 2022, that Eirgrid – the company who operate the national grid – laid the blame firmly at the door of the Commission for the Regulation of Utilities (CRU). Eirgrid however, are responsible for managing consumption, so it seems to be a case of the pot calling the kettle names. One government agency blames another – no accountability.
• In 2023, in the Government’s 2023 Climate Action Plan, it states on Page 17: “The linkages between fossil fuel use and economic progress must be decoupled.” Where then, is the energy for 136 data centres going to come from? They said we’d be the Saudi Arabia of wind energy production – but again, progress is glacially slow. The Saudi Arabia of hot air seems more appropriate.

Between Eirgrid, the CRU, the ESB and the Department of Environment, Climate and Communications, it should have been as clear as day a long time ago that we were going to have a problem on our hands. Electricity is a vital ingredient for data centres – not having enough would be the equivalent of building a drinks factory in the Sahara desert. Common sense seems to be in even shorter supply than electricity.

So where are we know?

Since late 2023, there has been a moratorium on new data centres, even though there are 40 more data centres with planning permission beyond those currently under construction.

The Sustainable Energy Authority of Ireland (SEAI) National Energy Protections 2023 publication stated: “To meet our climate obligations, we need to ensure that new energy demand in the industry sector does not lock in fossil fuel use for decades to come.“

Amongst all of the data centres that have set up shop in Ireland, 11 are contracted to connect to the gas network. We have a Green Party Minister, Eamonn Ryan, signing off on connecting multinationals to fossil fuel plants for the long-term future. In fact, 8 of the 11, will have direct access to burn gas as “islanded data centres”.

The moratorium illustrates that this coherent, strategic, joined-up, cross-government plan is in fact a train wreck. Eleven data centres are contracted to connect to the gas network, while our Climate Action Plan and SEAI Energy Protections say we shouldn’t lock in fossil fuel use – does this look like joined-up thinking?

The latest figures for data centres (2023) published in July 2024 show the demand from data centres have increased further to 21% – this is now more than double the consumption of rural homes, which sits at 10%. As mentioned above, that’s headed for 33% next year.

Effectively what this means is if there were no data centres in Ireland, by 2026 we would have a 50% energy surplus. We’re not suggesting getting rid of data centres entirely, but they should only have access to surplus green energy. We probably shouldn’t be fuelling them with gas and certainly shouldn’t be building new fossil fuel power plants to provide extra power, which will be mostly consumed by these data centres.

Taxpayer foots the bill

Now it’s time to upgrade the infrastructure and consumers are being told that they will have to pay an extra €100 per year for electricity – to fund works on improvements to the national grid. This continuous increase in electricity costs has been given many disguises down through the years but the origins of this fiasco can be traced back to 2011, when the government agreed to part-privatise ESB as a condition of the famous EU/IMF bailout or maybe even further back to 2001 when Eirgrid was created to stimulate competition in the energy. Has the consumer benefited since? You’d have to wonder.

Don’t forget that in 2023, FOI records showed that Meta (Facebook) were undercharged for their enormous electricity consumption. Perhaps its time for the biggest consumers of electricity in Ireland to pay the biggest chunk of the costs of infrastructure upgrades?