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Ireland’s power network needs €9bn investment by 2027 to sustain datacentre sector, claims report

Report by the Irish Academy of Engineering highlights how the expansion of Ireland’s datacentre industry has contributed to it becoming the country's biggest source of growth in terms of energy demand

Ireland’s power networks and infrastructure will require €9bn of investment between now and 2027 to cope with the datacentre community’s demand for capacity in the country.

A report by the Irish Academy of Engineering calls for urgent “analysis and debate” over who should be responsible for plugging this investment gap.

“The establishment of Ireland as the datacentre capital of Europe clearly brings considerable direct investment in the datacentres themselves, many of which are linked to the operations of major multinational employers, which have much of their non-US business serviced from Ireland,” says the report.

“However, much less attention has been paid to the very considerable investment in generation and network assets required for such a large-scale development of datacentres in Ireland.”

In particular, the report says more investment is needed to reinforce the electricity grid in the Greater Dublin area, which is home to hyperscale facilities operated by the likes of Amazon Web Services (AWS), Google and Microsoft.

Investment will also need to be allocated to support the generation of an additional 4,500MW of renewable power to underpin the growth of Ireland’s datacentre market.

“The issue of who will pay for this investment and how it will be funded urgently needs analysis and debate, as does the potential future development of the data industry itself,” the report adds.

The Irish government is aware of the issue, says the report, given that it is referred to explicitly within its Role of datacentres in Ireland’s enterprise strategy document.

But there are no plans in place to ensure that the datacentre industry’s major players will pick up the bill, despite the fact that their growth is putting increasing pressure on the national grid, says the report.

“No measures have been put in place to ensure that these costs are fully borne by datacentre developers,” it adds.

Data published by Host In Ireland earlier this year revealed that the country is now receiving €1.3bn of inward investment from datacentre operators each year.

Read more about the Irish datacentre market

The Irish Academy of Engineering report cites figures from state-owned power operator Eirgrid from 2018, which highlight how the expansion of the datacentre industry is set to become a primary driver for energy demand growth years to come.

So much so that, by 2027, the datacentre industry and other larger energy users will be responsible for just under one-third (31%) of the energy demand within Ireland.

“Eirgrid’s 2018 generation capacity statement highlights that the projected future growth in Ireland’s electricity demand is wholly due to datacentre demand and expansion by a very small number of large industrial customers,” says the report.

“This is because the anticipated improvement in appliance efficiency in other sectors is projected to compensate for the impact of forecast economic and population growth and moves to increased penetration of electrically powered heating and transport.”

The sustainability of Ireland’s power supplies, in the context of its growing reputation as a major datacentre hub, has previously been flagged as a concern, most notably in the problems Apple ran into when trying to secure permission to build a datacentre in Athenry, County Galway.

One of the objections raised to its plans – which the consumer electronics giant shelved in May 2018 – was how Eirgrid would cope with the extra pressure that supplying Apple with power would put on its national grid.

Read more on Datacentre backup power and power distribution

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