Government policies hindering data centres from using their own electricity supplies risk tipping the Irish technology industry into decline, the head of an industry body has warned.
Recently introduced rules require data centres to have their own backup electricity plants, which can supply the national grid when needed, while they must draw 80 per cent of their energy from renewable sources within six years of starting operations.
However, delays in getting national grid connections are creating problems that deter data centre developers from investing here, says Ronan Kelly, chief executive of lobby group Digital Infrastructure Ireland (DII).
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The Republic has already lost out on the first wave of AI investment, which went to Spain and the Nordics, but could still capture a share of the next if it deals with easy-to-solve problems, according to Kelly.
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Many of the 109 centres now operating here are more than five years old, so they are getting close to the point where their systems must be renewed, which is generally at 10 years, according to Kelly.
That could prompt their owners to move those facilities to other countries, if barriers to investing here remain, he explains, leading to an overall decline in the tech industry, with the loss of economic benefits, including corporation taxes.
“In 10, 15 years’ time, when the government comes to raid your pension pot, that’s when the chickens come home to roost,” he warns.
Government can solve most of the problems with “the stroke of a pen”, according to the industry advocate, who adds that they are largely the result of policy.
Data centres are not allowed to start operations without national grid connections, for which they have to wait five years, even while they must have their own electricity supplies, Kelly maintains.
His organisation wants this rule changed to allow centres to start operations using their own power sources, on condition that they immediately connect to the grid once that is possible.
Alongside this, data centres cannot count renewable power supplied through direct connections to wind or solar plants, known as private lines, against the 80 per cent requirement, which can only be met with green electricity from the grid.
Data centres could meet their renewable commitments quickly if they were allowed to count what they buy through private lines, Kelly argues.
This would also provide an outlet for wind and solar plants that are often prevented by a lack of capacity in parts of the national grid from supplying electricity to the market.
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DII argues that concerns that data centres will draw natural gas supplies away from new housing ignore the fact that policy dictates that new homes will use electricity.
The organisation has no difficulty with many aspects of the rules now governing data centre connection, stresses Kelly, who adds that the Republic has stricter regulations governing the industry than many jurisdictions.
Their presence here is a result of long-standing policy, he says. Government built the telecoms lines they needed in the late ‘90s. “We built the infrastructure and lo and behold, they came,” he says.
