Curbs on new data centres are pushing big projects away from Ireland to other European countries, according to an industry group which is seeking Government intervention to tackle constraints on the State’s power and gas systems.
Three years after national grid manager EirGrid curbed electricity access in Dublin and two years after gas connections were stopped, the data centre operators say significant policy issues “risk unravelling the strength behind the Ireland Inc brand” in the global arena.
The restrictions followed concerns about the risk of electricity blackouts after surging data centre demand for power added the equivalent of 140,000 households to the grid in each of the four years to 2021. Minister for Enterprise Peter Burke was advised on his appointment last month of a need to “ration” electricity connections for data centres because Irish renewable energy availability will be “insufficient” to meet the sector’s demands up to 2030.
Digital Infrastructure Ireland (DII) said this “continued uncertainty is already driving investment to other European markets, particularly those with clear, enabling and incentivising policy environments”.
Tech giants such as Microsoft and Google, which use Ireland as their EU hub, have this year announced a series of investments in other European countries. Research by consultants Bitpower, an adviser to DII, shows Microsoft investing more than €7 billion in new data centre and artificial intelligence projects in Germany, Spain and the UK. New Google projects in Belgium and Norway are worth some €1.2 billion, while Digital Realty, a DII member, has signalled new investments in France and Denmark.
The need to meet climate targets is at the forefront of Irish energy policy, but data centre promoters argue other EU member states have facilitated the sector while facing similar challenges.
DII has called on Minister for Communications Eamon Ryan to establish a working group to allow the Government, regulators, utilities, State agencies and the data centre industry to confront barriers facing the sector. The group includes operators such as CyrusOne, EdgeConneX, EngineNode and Equinix. DII says its 10 members have collectively spent more than €10 billion in Ireland and could invest another €3 billion around Dublin “if the policy climate permits”.
Data centre operators are increasingly unhappy with the lack of progress on power generation and the absence of clarity on connection agreement policy for large energy users.
“Without swift and direct action on this uncertainty, Ireland’s position as a welcoming hub for foreign direct investment and a global technology leader is at risk, just as investment in AI is scaling around the world,” said DII chairman Peter Lantry. “If the uncertainty continues, particularly in the Dublin metro area, it will reshape Ireland’s standing as a choice destination for prominent global projects.”
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