Don’t be distracted by data centres. Here’s the real reason we’re missing our climate targets

When the EPA announced recently that Ireland will fall well short of its carbon reduction targets, which are now legally binding under the Climate Act, there was widespread surprise. The fact that we have no hope of meeting the 2025 or 2030 carbon budgets has been apparent for some time.

Did anyone really believe we were in any way on track? If so, why?

One reason may be that we tend to think emissions reduction has a lot more to do with wind turbines than with banal realities such as how we travel to work. What is not generally known is that if we subdivide energy usage into three categories, namely transport, heating and electricity, the first two combined make up just over 80 per cent of our total energy demand. Electricity, on the other hand, is just under a fifth of our energy usage. These ratios have remained largely fixed over time. So even if we were to somehow manage to reach 100 per cent zero-carbon electricity generation, we would still have to address the bulk of our emissions across heating and transport, to say nothing of emissions in non-energy sectors such as agriculture.

It is certainly true that we have made great strides in renewable energy integration: according to EirGrid, 39 per cent of electricity on the island of Ireland came from renewable sources in 2022, and the target for 2030 is up to 80 per cent. The portion of energy for heat and transport that is met by renewables is, however, far more modest: 5.2 per cent and 4.3 per cent respectively in 2021, according to SEAI.

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Heat and transport

As long as the vast majority of our heat and transport needs come directly from fossil fuels, in car engines and home heating boilers, all the wind turbines in the world won’t get us where we need to be. We must either switch directly to low-carbon sources of heat and transport or we must electrify our heat and transport. Either option requires significant financial investments and behavioural changes by Irish households and businesses, and if those same households and businesses don’t understand this challenge, there is little hope of meeting it.

[ We don’t need fewer data centres. We need more electricity ]

We cannot simply ignore these other sectors and expect the electricity sector to fix everything – and yet so much of our energy policy debate still focuses on electricity. For example, a long-standing question that pops up again and again is whether we should pursue nuclear power instead of, or as well as, renewable power.

There are many considerations here: nuclear may not be technically compatible with wind and solar power, and the international evidence suggests that nuclear projects tend to take longer and cost more than expected. All this, however, should not really concern the average Irish electricity user, as it simply means that even if nuclear investment were a legal option in Ireland (which it currently is not), an energy firm would be unlikely to take the risk and invest.

In effect, the nuclear “debate” is largely a distraction. Even if we had followed the French example and invested heavily in nuclear in previous decades, we would still only have 20 per cent clean energy.

A new debate that has surfaced in the energy policy space is around the role of data centres on the power system. Increased demand from any source, data centres or otherwise, leads to higher costs and emissions, and also puts pressure on the ability of the power system to meet all demand at all times. These are two separate issues and should be dealt with separately.

Data-centre demand has been growing rapidly in recent years, which in turn has increased output and emissions from the electricity generation sector. Halting data-centre expansion would, therefore, reduce future emissions, all other things being equal – but this still leaves us with the challenge of decarbonising all our existing demand, the majority of which is nothing to do with data centres.

Focusing so much on the role of a small (albeit a rapidly growing) portion of our demand again distracts from the enormous challenges we face.

Energy policy

When it comes to secure electricity generation, we must ensure our energy policies and mechanisms are fit for purpose to meet all demand. The fact that this is in doubt is cause for alarm. Whether or not a portion of our demand comes from data centres is irrelevant – no matter what the source of demand, as long as the peak demand is predictable we should be able to source sufficient generation to meet it. Attempting to shut down a portion of demand because we are unable to ensure sufficient supply is not a good look for a modern power system.

The inability to meet electricity demand reliably is even more worrying when you consider that the current policy for decarbonising heat and transport relies so heavily on electrification. Policy envisages that we electrify heat by switching from fossil-fuel boilers to heat pumps, and transport by switching from petrol and diesel to electric cars. Our targets for both are enormous and if we meet them we will put further upward pressure on electricity demand, raising it significantly from its current 20 per cent of demand.

Decarbonising heat and transport therefore requires investment from households and businesses in a way that decarbonisation of electricity did not. The response from households so far has not been sufficient to meet the electrification targets we have set by 2030.

One welcome result that may come from the EPA’s report is a realisation that targets are not enough. Binding legislation also appears not to be enough, and focusing heavily on the smallest and easiest-to-decarbonise sector is also patently not enough. A proper understanding of the scale of the challenge across all sectors, as well as the speed at which we must meet this challenge, is by no means a sufficient condition to reaching our climate requirements. But it is certainly a necessary one.

Muireann Lynch is an economist at the Economic and Social Research Institute