Alan O’Reilly is a political activist based in London.
A recent study by Ireland’s Central Statistics Office (CSO) pointed out that data centres accounted for almost a fifth of all electricity used in Ireland in 2022.
Almost every major data technology company, including Facebook, Google and Amazon, have data centres in Ireland. Put simply, they are large-scale, industrial sized units housing thousands of computers that allow processing and storage of massive amounts of information quickly and efficiently.
Data centres are what allows the cloud – and indeed much of the web – to work as it does. Streaming services such as Netflix, Amazon Prime, and Spotify require them to allow the quick access demanded by consumers.
Ireland has quickly become a global leader in data centres: its strategic location between Europe and the United States, combined with its well-developed telecommunications infrastructure, has made it an ideal hub. Dozens are already in place, with more in either planning or under construction.
The country’s business-friendly policies, including attractive tax incentives and a supportive regulatory environment, have further enhanced its appeal.
To Ireland, the benefits of all this are obvious. The sector has created numerous job opportunities, both directly and indirectly, driving employment growth and contributing to the country’s GDP. Skilled IT professionals, engineers, and construction workers are in high demand, benefiting the local workforce.
Investment in data centres has also spurred investments in supporting industries, such as renewable energy, telecommunications, and construction.
However, this trend is not without controversy or consequence.
For starters, the strain on the national power grid has become immense. Earlier this week, the CSO reported that data centres accounted for more than 5,200 gigawatt hours (GWh) of usage in 2022, out of total metered consumption of 29,500 GWh.
The growth since 2015 has been huge: the percentage of metered electricity consumed by data centres rose from five per cent in 2015 to 18 per cent in 2022. This is expected to increase further in the coming years; the electricity system operator predicated that data centres could account for a quarter of the country’s electricity usage by 2030
In 2022, the government said that “data centres are core digital infrastructure and play an indispensable role in our economy and society”. But the challenge obviously arises: how does Ireland square this huge growth in an energy-intensive sector with the need to hit its renewable energy and carbon emission targets?
Earlier this month, the Environmental Protection Agency said that Ireland will achieve a reduction of 29 per cent in Greenhouse Gas (GHG) emissions by 2030 – compared to a target of 51 per cent. It added that the electricity sector was on course to miss both its 2025 and 2030 emissions goals.
In the past there have been temporary bans or delays on new projects as Ireland has struggled to balance generation capacity with demand. A country-wide moratorium was considered, but ruled out.
However, the system operator has imposed one in Dublin, and the energy regulator has tightened rules.
The long-term economic benefits are clear, and the trend shows no sign of changing. The ongoing digital transformation, accelerated by emerging technologies such as artificial intelligence, Internet of Things (IoT), and cloud computing, will continue to drive the demand for data centres.
But that just makes the challenge of balancing the growing needs of this important sector with Dublin’s climate objectives even more pressing.
Some of this will be facilitated by a switch to more sustainable and renewable forms of electricity generation. But at present, demand on the Irish grid looks set to grow much faster than the grid can be de-carboned. Irish governments will be grappling with the tension between Ireland’s economic interests and her environmental commitments for some time to come.