Irish consumers face €600 rise in energy bills due to data centres, report warns

“New data centres will continue to come online in Ireland throughout the 2020s and 2030s under current policy arrangements, in a world beset by extreme energy market volatility, and a lagging transition to a sustainable, decarbonised economy,” the report said.

“More ambitious expansion of renewables capacity in the future can reduce the wholesale price effect of data centres. [But] in the vast majority of scenarios modelled it is not sufficient to meaningfully displace the data centre-gas dependence cost effect associated with projected rises in data centre energy demand from 2025-2034, due to the projected scale of data centre demand.” 

The report comes as the Government has thrown its weight behind data centre 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.

A decision issued by the Commission for Regulation of Utilities effectively opened the door once again for data centre connections while mandating that 80% of the energy they use will have to come from new renewable sources.

Ministers subsequently denied that Ireland is “rolling out the red carpet” for data centres but said its new large energy user policy is providing certainty for the sector.

In this new report, it is argued that high data centre demand here, combined with our dependence on gas-fired power in the electricity market, is creating additional costs for households.

“Given the extraordinary volatility of fossil fuel pricing in recent years, and likely in the future, the dependency on gas in the power system combined with high and steadily increasing data centre energy demand makes Irish households further exposed to wholesale electricity cost increases,” it said.

The report said the average household may have paid €360 in additional electricity costs between 2015-2023 due to the intensity of data centre presence on the Irish Single Electricity Market (ISEM) grid putting upward pressure on prices.

Cumulatively for all Irish households, this data centre price effect was as high as €715m.

Depending on the future growth of data centres, the report estimates the average Irish household could expect to pay a further €295 in a low demand scenario, €461 in a median one and €644 in a high demand scenario cumulatively over the period 2025-2034.

Across all households, this would translate to total costs of between €633m and €1.43bn. If a future energy crisis were to unfold, this would raise the cost as high as €1.6bn to households, it said.

It added: Scenarios modelled in this report show that placing limits on data centre energy demand and pursuing more ambitious renewables development, even in the event of a price shock, could save Irish households an estimated €435 cumulatively from 2025-2034.”