The backlash against data centres is growing in the US. An estimated $64 billion of new projects have been stalled following objections by local communities amid concerns over electricity and land usage as well as pressure on natural resources such as water.
Indeed, spiralling energy demand among data centres caused by the boom in artificial intelligence is shaping up to be one of the hot-button issues in the US mid-term elections in November. It is important to note however, that data centres account for only 4 per cent of the US’s entire consumption of electricity.
The latest figures for Ireland, published by the Central Statistics Office, show that data centres accounted for 23 per cent of all electricity consumed in 2025 – by far the highest among OECD member states. A report from a UN agency on the environmental impact of the exponential growth of AI, published last month, cited Ireland as a “cautionary tale”.
The Government recently lifted a moratorium on the construction of new data centres as long as a number of conditions are met, including that 80 per cent of the energy used comes from renewable sources. Its rationale is that data centres are a key component of Ireland’s digital infrastructure, which supports hundreds of thousands of jobs.
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However, as economist John FitzGerald recently pointed out in the Irish Times, this takes a very narrow view of the economic benefits of data centres. A more comprehensive assessment is needed, which includes the impact that data centres are having on the wider economy, such as diverting resources away from critical infrastructure projects and house building.
Even if data centres comply with the Government’s stipulation that they generate 80 per cent of electricity through renewables, the projected growth in the sector means that they will still be producing significant amounts of carbon, hitting Ireland’s chances of meeting its climate change targets. Data centres have a role to play in the economy, but more planning is needed to determine the scale that best suits the State’s interests.
