Apple’s data centre in Galway may be just the beginning

The decision by Apple to locate one of its first two data centres outside the United States in Athenry will provide a major investment boost to the Galway town. By their nature, these centres involve a massive capital spend – about €850 million in this case – although they provide relatively low levels of direct employment.

About 100 full-time jobs will be created when the centre is up and running, with a further 200 during the construction phase.

Welcome though the permanent jobs will be, the more important factor for IDA Ireland will be tying Apple – which already employs more than 4,000 people here – further into the Irish economy and getting it to invest a very substantial amount of additional cash.

Some of the investment will go on specialist equipment which will be imported, but the whole building phase will give a boost to the area.

There will be economic spin-offs to the local area in the long term, though the business of data centres is to manage large amounts of information, so they operate largely as standalone entities.

For the State, these kinds of projects are providing an ongoing source of investment from multinationals.

Google has four centres and will have invested some €900 million. Microsoft, Digital Realty and Telecity all have major centres here. The tighter data rules in Europe, springing from EU directives, have encouraged Apple and the other big tech companies to diversify their data centres outside the US.

Access to this data is a controversial subject, as underlined by a case taken against Microsoft by the US authorities, which involves data held here.

One of the main issues surrounding these centres has been their energy use – and the resulting carbon emissions created in generating this. Apple has said that the Athenry plant will run 100 per cent on renewable energy from day one. It would be expected to do a deal to buy renewably generated energy from one of the energy companies when it arrives – and then to work on developing local energy sources via wind or other renewables.

On the energy theme, Ireland scores well for data centres partly because of our temperate climate, also a feature of Jutland in Denmark where the second centre announced yesterday is to be located. A major cost of these centres is keeping the temperature down via air conditioning – and this will cost less here and in Denmark than it would in Spain or Italy for example.

Apple’s decision to locate outside Dublin – the home of almost all previous data centre investments here – will have been particularly welcomed by IDA Ireland. A key attraction of Athenry was the scale of the site, in an old Coillte forest. The plant, at 166,000sq m, will be the size of 11 Croke Parks.

Apple’s press release was full of information on this green agenda and the jobs it provides across Europe, but the company has recently been in the headlines for its tax arrangements, particularly here.

The European Commission is continuing an investigation into the tax deals reached here historically. The continued investment by Apple here – presumably funded from its lowly taxed store of profits earned and held outside the US – will encourage the Government to continue to fight this case as hard as possible.