Microsoft Ireland has been granted planning permission for what would be one of the largest data centres in Europe, at Grange Castle in Dublin, although the project has yet to be approved by Microsoft's corporate headquarters.

According to planning documents lodged, the two-storey data centre will have a total gross floor area of 51,155sq m and will employ up to 150 people.

Figures supplied to support an application for 80 parking spaces show there will be 50 staff on site at any given time, once the centre is fully operational.

The documents also say Ireland was chosen "largely on climatic conditions and strategic business considerations".

Ireland's climate - which does not experience extremes of temperature or humidity - makes it ideal for the location of data centres. These are high-density facilities of computers with multiple connections to the internet to support electronic commerce.

A Microsoft spokesman confirmed Ireland has been chosen as the "preferred" location for its new Europe, Middle East and Africa data centre and said he expected a decision on whether to proceed by the end of November.

The data centre will be developed in two phases, with the first phase going into operation in early 2009.

No date has been set for phase two.

An average of 250 construction staff will be employed during the 21-month building phase although this could spike to 400 at certain times.

The 18.9-acre greenfield site Microsoft has purchased for the project is at Grange Castle International Business Park. This is already home to three large pharmaceutical plants - Wyeth Pharmaceutical, Takeda and Gilead - as well as the headquarters of food group IAWS.

Site development works are scheduled to begin in November. When completed, the data centre will be one of the largest of its kind in Europe.

A major inhibitor of developing data centres in Ireland has been the availability of sufficient electrical power.

An environment impact assessment included with the application states Microsoft is endeavouring "to build a sustainable facility" and that it will be 50 per cent more power-efficient than other centres of a similar size.

The data centre will require 40MW of power which, it is believed, can be supplied by the existing local supply.

Rackfloor, an Irish company, is currently developing a data centre in Limerick for which it will generate its own power on site.

Tanya Duncan, general manager of the Irish operations of European data centre operator Interxion, said they are also planning to build another Irish data centre.

Microsoft has already begun construction of two similar data centres in the US. These will support Microsoft's change in business model, whereby it will provide software as a service over the internet rather than shipping it on DVDs or pre-installing it on computers.

Microsoft currently employs 1,200 full-time staff and another 700 contractors in south county Dublin.