‘Smoke screens’ and ‘finger pointing’: Inside Irish data centres battle for connectivity

There is a battle over who gets access writes Emer Walsh.

‘Data is the new oil. Those countries that grasp the challenge will be the winners.”’ Picture: Sameer Al-Doumy

Amid existential warnings of falling behind and of hefty economic losses, Ireland’s data centres are battling it out for a future that supports their exponential growth on a grid struggling for capacity.

Lobbyists for the sector argue that Ireland’s data- centre ecosystem is under threat, and warn that the State could miss out on lucrative AI investments

At the forefront of the debate is Digital Infrastructure Ireland (DII), the business lobby group pushing for reforms that prioritise data centre expansion and dispel its “demonised” reputation across certain quarters in Ireland, with critics spanning from environmental groups to housing activists to — in DII’s view — Ireland’s national grid operator.

The Digital Infrastructure For The Future We Want report commissioned in May by the DII said data centres were essential for the modernisation of the public sector, for future foreign direct investment, and for the wider economy.

DII chair Maurice Mortell: ‘This issue is another one of EirGrid’s smoke screens to avoid finger-pointing.’  Pic: Larry Cummins

“Data is the new oil,” it said. “Those countries that grasp the challenge will be the winners.”

From an economic perspective, DII will argue that the value of data centres exceeds the direct employment they create and that they provide the critical infrastructure the economy most needs.

While the DII’s 37-page report is quick to alarm readers of the consequences of missing out, it does less to address the impact of data centres on water usage, land, the electricity grid, and housing.

With a construction sector already at full employment, and a housing crisis that needs all the builders it can to alleviate shortages, investments in data centre infrastructure often come at the cost of much-needed housing.

The Commission for Regulation of Utilities has also warned that it does not have the power to prioritise government policy objectives, such as housing, over data centres, due to a first-come, first-served connection approach, even in areas initially designed to support housing growth.

Greenhouse gas emissions from data centres cannot be ignored, given their constant
need to be on, which increases their reliance on fossil fuels on days without ample wind or solar energy.

With costly delays to the grid interconnector, long-lasting restrictions on nuclear energy, and roadblocks to developing offshore wind, Ireland’s push for data centres is outpacing its ability to power them with renewable electricity.

As a study by Friends of the Earth and Beyond Fossil Fuels argues, the high demand for data centres in Ireland, combined with our dependence on gas-fired power in the electricity market, is driving up costs for households.

The report, published just one day after the DII’s, said that Irish households bore an extra €715m on their bills between 2015 and 2023, as the intensity of data centres put upward pressure on prices.

It also warned that Irish households will be further exposed to wholesale electricity cost increases, amid continued volatility of fossil-fuel pricing and steadily increasing data-centre energy demand.

The report was published amid heavy support for data centres by the Government, which has thrown its weight behind their growth in the years to come. Such sites, which consume large amounts of water as well as energy, accounted for 22% of electricity consumption in Ireland in 2024. This was more than all urban homes, with their share projected to rise further beyond 30% by 2030.

Already, about 50% of the electricity produced in the Dublin/Meath region is consumed by data centres, according to the CRU.

But despite DII’s frustration with critics of the sector, its most significant battle is internal, with Ireland’s grid operator, EirGrid, which is struggling to keep pace with the rapid expansion plans outlined by Irish data centre operators.

Earlier this year, fears of electricity blackouts prompted authorities to propose new protocols for data centres.

EirGrid warned of a risk to grid stability from data centres, asking the sector to abide by new measures to protect Ireland’s power supply. Under the protocols — referred to technically as fault ride-through requirements — data centres would be expected to stay connected to the grid during millisecond-long faults that occasionally occur on the electricity system. Before this, data centres would disconnect immediately from the grid and switch to their own back-up electricity supply.

DII chair Maurice Mortell: “This issue is another one of EirGrid’s smoke screens to avoid finger-pointing."

That simultaneous disconnection, according to EirGrid, risks destabilising the entire grid as more data centres are added to the system, with a full blackout being described as a worst-case scenario. The same problem has already arisen in other countries, including South Africa and Mexico.

But the proposal has sparked opposition from data-centre operators, who warned of challenges in applying new requirements to existing systems and the subsequent financial cost of these upgrades.

The DII has sharply criticised the plans, with its chairman, Maurice Mortell, writing in a message to a government official that the publication of EirGrid’s draft — outlining these fault ride-through requirements — will not be helpful to the “already negative” narrative experienced for the sector.

In correspondence released under Freedom of Information, Mr Mortell wrote to the same government official —in the
Department of Climate, Energy, and the Environment — that there was “growing frustration within the sector” regarding EirGrid’s fault ride-through requirements.

“This issue is another one of EirGrid’s smoke screens to avoid finger-pointing that will inevitably happen when we realise we have missed out on billions of investment in digital infrastructure,” the DII chairman wrote in an email last September.

“While the industry can respond to this issue technically, I am not sure there is any appetite to reinvest in existing infrastructure, because of EirGrid’s failings,” Mr Mortell said.

“The frustration now centres around what is going to happen in the future, so our members can make informed decisions about new investments,” he said.

“As things stand, it looks like we are closed to new business for the next 10 years.”

In another email, to a government official in the Department of the Taoiseach, Mr Mortell said the EirGrid document on new fault ride-through requirements, while technical in nature, made the “negative message” on the sector clear, with the DII chairman arguing that it would be used as a “stick against the industry.

“We would like to get back on track with what the future looks like and not dwell on grid retrospection, which is a deflection at best.”

While the DII maintains that the expansion of data centres is tantamount to securing Ireland’s future, its internal battle with EirGrid and wider government stakeholders remains its largest hurdle.

But with grid constraints intensifying, continued housing pressures, and questions growing around renewable energy generation and climate targets, the battle over who gets access to Ireland’s limited infrastructure is only becoming more contentious.