Data centre group Echelon ‘frustrated’ at slow pace of grid connection

Data centre developer Echelon is growing “frustrated” with the slow pace of talks on connecting a planned project to the electricity grid, industry insiders say.

Echelon’s €500 million planned Dub20 complex at the old Irish Fertiliser Industries site in Arklow, Co Wicklow will require 90 mega watts of electricity in its first phase, rising to 204MW over several years.

The Irish group announced the project in 2019 and has been in talks with State company Eirgrid for about two years on connecting the project to the national grid. Sources say there is no immediate signs of a conclusion to the negotiations.

Echelon quashed speculation that it had begun legal action against the State over the delay, saying on Friday that it continued to engage with Eirgrid in relation to an application for a grid connection for the Dub20 project.

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“This process is ongoing and is commercially sensitive,” said a statement. “Echelon cannot comment on any course of action that may be open to it in the future.”

However, industry insiders say the company is growing frustrated with what it regards as the slow pace of progress on processing its grid application.

Echelon maintains the Arklow site, whose first phase will employ 90 people, fulfils all the criteria set out by the Commission for the Regulation of Utilities (CRU).

The project is outside an area where electricity supplies are constrained, will have its own power generator capable and supply the national grid at times of peak demand and will be able to manage its demand to cut electricity consumption when requested.

According to Echelon, the Arklow site’s own facility will be able to generate up to 293MW of electricity. It is also close to where SSE Renewables plans to build an offshore wind farm capable of producing 800MW.

The regulator set out these criteria in November 2021 following a backlash against data centres sparked by a squeeze in electricity supplies that resulted from a delay in building new power plants.

Eirgrid said it did not comment on specific applications. The State company confirmed that it considered data centres on a case-by-case basis, subject to the CRU’s criteria.

The grid operator pointed out that it was aware of the role that data centres played in Government enterprise policy. It also noted it was aware that the CRU was shortly due to publish a consultation paper on large energy users, which was likely to have ramifications for data centres in the Republic.

Eirgrid raised concerns almost three years ago with the regulator over the rate at which data centres were seeking connections to the national grid as these facilities consume large amounts of electricity.

Government policy encouraged data centre construction in the Republic on the basis that they helped “anchor” multinational high-tech companies that employ large numbers of people.

The CRU’s consultation resulted from the subsequent controversy and pressure on electricity supplies that at one point led to Eirgrid warning several times that power reserves were lower than ideal.

Fianna Fáil TD Barry Cowen recently demanded that the regulator hold off on publishing its paper until a Government-convened energy industry forum had reviewed it.

Mr Cowen argued that data centres were vital to the Republic’s ability to lure high-tech investment and warned that the Government should not allow the CRU to be “the arbiter of whether Ireland’s digital industry should grow or not”.