Investment of €9bn may be needed to power data centres

Demand for electricity will increase as large energy users such as data centres expand or grow in number

Some tech companies are already doing deals to fund renewable electricity generators. Photograph: iStock

Some tech companies are already doing deals to fund renewable electricity generators. Photograph: iStock

 

Experts say the growing number of data centres in the Republic could require spending of more than €1 billion annually for the next eight years on new electricity plants to ensure these facilities have enough energy.

The Government wants to attract more data centres to the State to help anchor existing hi-tech investors such as a Google and Facebook here. Currently there are more than 20 such facilities in the greater Dublin area alone and that number is poised to grow.

Professional body the Irish Academy of Engineers published a report on Thursday estimating that an “investment of €9 billion” will be needed in the Republic’s electricity sector over the next eight years to meet increased demand for power from data centres. The organisation’s figures assume that 70 per cent of the electricity will come from wind and solar power combined.

“It is not currently clear how this investment will be funded, and this is an issue that we believe urgently needs analysis and debate,” said the academy’s chief executive Gabriel Dennison.

He added that the future development of the data centre industry itself also needed further scrutiny in light of Government policy on climate action and the increase in greenhouse gas emissions likely to result from a growing number of data centres.

These facilities consume large amounts of energy. The Irish Academy of Engineers’ report shows that this year Irish people will use around 30 terra watt hours (TWh) of electricity, enough to power 30 million homes. Data centres will boost this to 40 TWh by 2027, an increase of one third.

Those figures are based on an assessment of the Republic’s future energy needs by national electricity grid operator Eirgrid. The State-owned company did not contest the engineers’ calculations of the likely cost on Thursday.

Spokesman David Martin confirmed that electricity demand would increase as large energy users, including data centres, expanded or grew in number.

Older power plants

He explained that the increased demand, combined with the shutting down of older power plants that emit large quantities of greenhouse gas, would require new electricity generators.

“We are working with relevant Government departments to implement the Government statement on The Role of Data Centres in Ireland’s Enterprise Strategy, published in 2018,” Mr Martin said.

Some tech companies are already doing deals to fund renewable electricity generators. Earlier this year online retailer Amazon agreed to back a wind farm in Donegal developed by Invis Energy, a joint venture between engineering firm Craydel and €12 billion fund HG Capital.

Meanwhile, energy companies such as Airtricity, Norway’s Statkraft, German group Innogy, Belgian operator Parkwind and State-owned ESB plan to spend a total of around €6 billion on building offshore wind farms in the Irish Sea, partly to cash in on growing demand driven by new data centres.