Government balancing AI growth and energy demand from data centres, says minister

The report highlights the heavy demand data centres place on Ireland’s energy system, with 21% of all electricity in the country used for data processing. File picture: Yui Mok/PA Wire

The transport minister has said the Government is “managing” the issue of data centres and their energy consumption.

Darragh O'Brien was responding to a new UN report on the environmental impact of Artificial Intelligence (AI) growth, in which Ireland was cited as a “cautionary” tale.

The report highlights the heavy demand data centres place on Ireland’s energy system, with 21% of all electricity in the country used for data processing. 

That figure is forecast to grow to more than 30% in the next few years as data centres expand to facilitate the huge processing capacity needed by AI, while proposed rules allowing them to generate their own electricity are expected to increase fossil fuel use.

Speaking on RTÉ Radio 1’s Morning Ireland, Mr O’Brien said the Government had published the Large Energy User Action Plan, “which means it's a plan-led approach to any future connections with regards to data centres".

“What that means is any new data centre coming forward would have to bring forward at least 80 pc of their own energy through new renewable sources before they would be given a connection agreement," he said.

The situation had to be managed, he said.

“We have to balance the need for continued investment. Do we want Ireland to be at the leading edge of new technologies? I think we do.

“That supports our whole economy and supports the jobs within our economy. Or do we want to actually pull down the shutters on this? I don't think we do. It needs to be managed and planned appropriately, which it is, ensuring that there are criteria around the connections, particularly around the requirement for 80 pc of energy being derived from new renewables.”

He added: "It was important to understand that the data sector in Ireland was a significant part of the economy, worth €2.2bn in 2024, the last year for which there was complete data.

“Actually, there's a lot of EU colleagues and a lot of colleagues across the world who look at Ireland with envy, with the amount of investment that we've received through data centres and through the companies who are investing in it.

“We've had really significant investments and foreign direct investment into leading-edge technologies that support our economy. On data centres, on ICT alone in this country, it's about 180,000 jobs in this country, dependent on the ICT sector. About 20,000 in data centres alone. So, this is very significant investment. I've already mentioned 3,300 people employed in data centres in Ireland in 2024.

“It is not an insignificant sector at all. I think anyone who argues that we should not have data centres or new leading technologies in our economy, I put it to them, are incorrect and they're being short-sighted. Now, what we have to do and what we are doing is managing that demand.”