The Government has unveiled a welcome, if belated, plan to address the growing gap between the energy needs of the high-tech sector, particularly data centres, and Ireland’s legally binding commitments to reduce greenhouse gas emissions.
The Large Energy User Action Plan (LEAP) published by Ministers Peter Burke and Darragh O’Brien on Tuesday is detailed, though it leaves some important questions unanswered.
Data centres have become controversial in recent years because they are highly energy intensive. They accounted for 22 per cent of Ireland’s electricity usage last year compared to an EU average of 3.1 per cent.
There was an effective moratorium on the construction of new data centres from 2021 until last month because of concerns that the pressure they were putting on the national grid would lead to electricity blackouts during peak winter months. As a result, Digital Infrastructure Ireland, a lobby group, warned the Government that the State risked losing billions in investment.
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The Commission for the Regulation of Utilities (CRU) ruled last month that new data centres could proceed, as long as 80 per cent of their annual energy needs are supplied through renewable sources. The LEAP strategy is designed to attract investment not only in data centres, but also other energy intensive industries such as pharmaceuticals and semiconductors. New projects in these sectors would be encouraged to locate facilities adjacent to “green energy parks” planned for a number of locations throughout the State. This would enable these companies over time to meet 80 per cent of their energy needs from renewable sources.
LEAP is certainly a welcome departure from the ad hoc system that existed up to 2021, which resulted in half of all data centres in the State being located in the Dublin region. However, it is still unclear whether these new incentives for energy intensive industries are compatible with Ireland remaining within its carbon budgets.
A Government paper released to Sinn Féin MEP Lynn Boylan showed how a data centre in west Dublin required ten times as much energy as a local pharmaceutical plant employing 2,000 people, putting pressure on a local electricity substation. Can Ireland produce enough clean energy in time to meet demand, even if data centres eventually generate much of their own energy? And can the electricity network be upgraded quickly enough to cope?
Ireland’s energy transition is based on a switch to renewable sources. To date, the development of renewables is much slower than hoped for and the energy network needs billions in new investment. Speeding all this up, and reducing the risk of damaging fines after 2030 for not meeting climate targets, must be the Government’s priority.
