Dublin is no longer a growth market for Amazon and other computing giants looking to build data centre capacity, with many “no longer planning future growth” around the county and “pivoting away” from Ireland altogether, a industry report has said.
However, DC Byte, a global data centre market intelligence company based in the UK, said the Greater Dublin Area, Ireland’s most concentrated data centre cluster, remained among the biggest metropolitan hubs for the industry in capacity terms in western Europe.
Among five big western European cities, Dublin accounted for 15 per cent of total data centre capacity, behind London, on 39 per cent, and Frankfurt and Paris, both accounting for 18 per cent.
Still, DC Byte said the market here was being “reshaped by power availability and grid access”.
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Last December, the State moved to lift an effective moratorium on new data centre connections to the electricity grid, which had been in place since 2021.
The Commission for the Regulation of Utilities (CRU) ruled that new data centres could be built if they also generated and supplied power to homes and businesses through the national electricity grid.
New data centres will also eventually be required to generate 80 per cent of their energy supply annually through renewable sources of power generation.
[ Plans for €1bn Westmeath data centre stalledOpens in new window ]
The rollback of the moratorium is being seen as an attempt to capitalise on the recent global boom in data centre construction as tech giants look to build the computing infrastructure necessary to develop and support artificial intelligence (AI).
DC Byte said that some “industry stakeholders” believed the Government’s 80 per cent rule and the “self-generation” requirement were “potentially trailblazing”.
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Still, the Dublin metropolitan market remained “constrained” by grid capacity, the report’s authors said. The firm also noted that “public sentiment towards data centres is strongly negative, making Government support politically sensitive”.
Yet there was still strong underlying demand for data centres in the region, “because Ireland has historically been attractive to hyperscalers” because of “low corporation tax, workforce availability, strong US-Ireland business ties”.
[ Data centres account for almost a quarter of Irish electricity usage in 2025Opens in new window ]
Those dynamics were shifting, however, because of “poor readiness”, while under the Coalition’s new policy, new data centres would have to be located in less-constrained areas of the grid.
“Hyperscalers still need capacity in Dublin because of existing cloud regions, but they are no longer planning future growth around the city in the same way,” the report’s authors said. “Microsoft, Amazon and Meta are all pivoting away from Dublin, with Microsoft looking towards the Nordics as an alternative.”
Against this backdrop, DC Byte said: “Hyperscalers and suppliers are likely to keep exploring alternatives such as the Nordics, while speculative development in Ireland becomes significantly riskier unless power, planning and location risks can be addressed early.”
The CRU’s ruling on new data centre connections is facing legal challenges from environmental groups, concerned about the industry’s increasingly large energy footprint and the impact on carbon emissions.
Recent Central Statistics Office figures showed data centres accounted for almost a quarter of the electricity consumed in Ireland last year, up from 5 per cent in 2015. The sector is expected to account for more than 30 per cent of Irish energy consumption by 2030.
