Data is like gold but data centres present dilemma, Varadkar says

Tánaiste says up to a third of all electricity produced may go to powering data centres

Tánaiste Leo Varadkar said the real value of large companies keeping their data in Ireland was that they were much more likely to bring other operations to the State. Photograph: PA

Tánaiste Leo Varadkar said the real value of large companies keeping their data in Ireland was that they were much more likely to bring other operations to the State. Photograph: PA

 

The development of data centres provides both a real strategic advantage for the Republic and a real dilemma in the short term given their energy demands, Tánaiste and Minister for Enterprise and Employment Leo Varadkar has said.

He told an Oireachtas committee on Wednesday that data was hugely valuable like gold or diamonds and suggested the establishment of such centres could effectively anchor large companies to the State.

However, Mr Varadkar said he had seen figures showing that as much as a third of all electricity produced in the country could be consumed by the facilities.

Replying to a question from Independent Waterford deputy Matt Shanahan, he said the development of data centres presented “a real dilemma in the short term but a real opportunity in the medium term”.

He said data was a really valuable commodity and it had to be stored somewhere.

“It is gold; it is diamonds – why would you not want it to be stored in your country?”

Mr Varadkar said the benefit of data centres being located in Ireland was not just about construction, supply chain or maintenance jobs. He said the real value of large companies keeping their data in Ireland was that they were much more likely to bring other operations to the State or to keep existing operations here if that is where their data was stored.

“It is your safe and you never move too far away from your safe. That is why there is an advantage for us in having data centres in Ireland.”

However, Mr Varadkar said the energy demands of data centres were “extraordinary”.

“I have seen figures that suggest as much one third of all electricity we produce would be needed for data centres alone and that is at a time when we have some trouble on the grid with a couple of power stations down. It is going to be a difficulty in the next couple of years. The opportunity in the medium term is the renewable energy and offshore wind producing gigawatts of electricity. And being the country where you build your data centre, and it is powered by green energy, it could be a real plus.”

Green cards

Separately Mr Varadkar told the Oireachtas select committee on enterprise and employment on Wednesday that he had often wondered if it would be better for Ireland to introduce some form of green card arrangement to facilitate the employment of workers from overseas .

He was replying to Richard Bruton of Fine Gael, who urged the Government to move away from a system where a worker who secured an employment permit was effectively tied for five years to one employer.

Mr Varadkar said: “I often wonder if a better system for Ireland might be something like a green card system where we let a certain amount of people in [to the country] and allow them full access to the labour market and all parts of it.”

He said the advantage of the employment permit system at the moment was it could be used to plug particular skills gaps in specific areas.

“It might be a fruit farm in north Dublin or a mushroom farm in Monaghan and the reason you give the work permit is to fill that skills gap.

“If you were not to do that, would you be able to fill that skills gap? The person might get the work permit and not want to work in that sector or in that part of the country and then we would have a new problem to solve. That is the difficulty.”

Mr Varadkar said instinctively he did not like “the idea of someone being invited into country to work here and being told they can only work for a particular employer as that creates a kind of power relationship essentially between employer and the permit holder who is a migrant who maybe does not have connections here and does not know their way around the system and would be more open to exploitation in those circumstances”.

Labour inspectors

Mr Varadkar also told Louise O’Reilly of Sinn Féin the Government aimed to increase the number of labour inspectors in the Workplace Relations Commission (WRC) to 60 and progressively raise the numbers further from there.

He said “rationally with between two and 2.3 million people at work, 60 inspectors was “not an awful lot”.

He said no figures had been agreed yet with the Department of Public Expenditure on the numbers ultimately to be employed.

Mr Varadkar said at present there were 54 inspectors at the WRC, which was below the level of 60 for which funding was available. He said a recruitment campaign was now under way to increase the number of inspectors to 60.