Data centres must get at least 80% of their energy from renewables, regulator says

The Commission for Regulation of Utilities will give them a six-year lead-in time to develop new renewable electricity projects.

Data centres will need to meet at least 80% of their annual energy demand from new renewable electricity projects, but will get a six-year lead-in time to develop them, Ireland’s energy regulator has said.

In publishing its long-awaited new electricity connection policy for data centres here, the Commission for Regulation of Utilities (CRU) said operators like Eirgrid and ESB Networks will have to consider where a data centre is being proposed for and if the energy demand in that area is already constrained in deciding if they can accommodate it.

Furthermore, new data centres will have to provide generation or storage capacity to help supply electricity back to the wholesale market, essentially powering homes and businesses with the energy they generate or store.

“The objective of the new policy is to provide a pathway for data centres to connect to the electricity system, which takes into account existing constraints on the grid and the pace of delivery of network capacity; security of supply and generation adequacy; and national renewable energy targets,” the CRU said.

It added it is conscious of minimising “where possible” the impact on national carbon emissions.

Furthermore, new data centres will have to provide generation or storage capacity to help supply electricity back to the wholesale market, essentially powering homes and businesses with the energy they generate or store. File photo

Under what is currently contracted for, Eirgrid forecasts suggest that the data centre sector will continue to grow in Ireland. Between 2023 and 2034, the electricity demand for data centres is forecast to have doubled.

Having contributed to 22% of national electricity demand last year, this figure is expected to rise to 31% by 2034.

In terms of the geographical location of data centres, the CRU said system operators must consider whether a proposed data centre location is in a “constrained or unconstrained location” on the electricity network.

This will be a change from the current “broader regional approach”, the regulator said.

In terms of renewable energy requirements, the CRU said developers will be given a six-year “glide path for renewables to be developed and start generating”, to acknowledge the timeline associated with renewable energy projects.

Data centre developers will also need to give a “credible plan” to Eirgrid and ESB Networks for the development of these renewable projects.

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Both bodies must prepare an engagement and connection process for data centre applicants by the end of March 2026 to implement this new policy.

Digital Infrastructure Ireland welcomed the announcement and said it hopes this will “end the four-year de facto moratorium on data centres and begin to reset the digital infrastructure industry here in Ireland”.

Meanwhile, Noel Cunniffe, CEO of Wind Energy Ireland, said: “This new policy gives certainty to large-energy users and to the renewable energy industry.”