Data centres have branded as “unreasonable” a regulators’ call for them to use backup generators to supply electricity to homes and businesses.
The energy industry overseer, the Commission for the Regulation of Utilities (CRU), proposes that centres supply electricity to the Irish wholesale market from on-site power plants or batteries in return for grid connections.
However, the industry body, Digital Infrastructure Ireland (DII), dubs the plan unreasonable in a response to the commission, arguing that the market is not designed for smaller generators such as those data centres use for back up.
DII chairman Maurice Mortell said that building power plants suitable for this would boost the cost.
“You’re talking between 30 per cent and 50 per cent more to build that sort of capacity,” he said on Tuesday.
Mr Mortell added that other European jurisdictions competing for data centre investment were not seeking this concession.
In addition, he predicted that centres would also have to hire staff to work on supplying electricity to the market, a different business from the one in which they operate.
Data centres account for 20 per cent of Irish electricity consumption, putting them under fire as supplies were squeezed and prices rose in recent years.
The industry and its supporters argue that the centres underpin 160,000 jobs in the Republic’s information technology industry, its biggest services exporter.
The CRU’s proposed new rules for grid connections, published in February, attempt to balance the industry’s appetite for energy with its economic benefits.
The rules will only apply to data centres that seek grid access after they come into force.
They will not cover those that have already applied, or to which EirGrid or ESB Networks, who manage access to the electricity system, have pledged connections.
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DII maintains that preferable solutions include data centres directly funding more renewable electricity through power-purchase agreements, where businesses agree to buy electricity from wind or solar farms.
These deals allow green energy developers to raise cash to fund construction as they give certainty to investors and banks.
Mr Mortell also maintains that the industry does not believe there should be blanket rules governing connections in areas where electricity supplies are squeezed, including Dublin.
The DII said that many data centres locate close to the capital as their customers demand this. Those clients include State agencies and small business, added the organisation.
EirGrid and ESB Networks should judge applications for these areas on a “case-by-case” basis, rather than simply using the absence of one or other of the regulator’s requirements as grounds for rejection, said the DII.
Mr Mortell observed on Tuesday that the Government and State agencies were keen to resolve the problems that have stalled data centre development in the Republic.
“There’s been massive engagement, we’ve had lots of discussions with the CRU and with the various new Ministers appointed since the new Government was formed,” he said.
Meanwhile, US president Donald Trump’s pledge to levy 20 per cent tariffs on imports from the EU has led to some uncertainty about future investment here, Mr Mortell acknowledged.
“At a very high level some of the investments have either stalled or are focusing back on the US,” he said.
“But at the end of the day, digital infrastructure needs to be relatively close to where the markets are.”
