Large data centres must be forced to cover rising cost of electricity, says environmental body

The Friends of the Earth Ireland has also called on Government to rule out any public subsidies or financial supports for new data centre developments. File picture

Households must be protected from rising electricity bills by forcing large data centres to pay a substantially greater share of electricity network costs, a leading environmental advocacy organisation has said.

The Friends of the Earth Ireland has called on the Government to use Budget 2027 to reform how the costs of Ireland’s energy system are shared.

The charity also said that public investment must deliver lower bills, cleaner energy, and greater energy security for households.

The call follows news that households will face another increase in their electricity bills from October, after the energy regulator approved higher network charges to fund upgrades to Ireland’s electricity grid, adding further pressure to those already struggling with the cost of living.

While the Public Service Obligation (PSO) levy will decrease this year, Friends of the Earth Ireland said this reflects higher wholesale electricity prices rather than any reduction in the need to invest in renewable energy.

Friends of the Earth is calling on the Government to:

• Ensure data centres pay a substantially greater share of electricity network costs.
• Rule out any public subsidies or financial supports for new data centre developments.
• Ringfence additional revenues from the sector for home energy upgrades, renewable energy and public grid investment.
• Prioritise electricity connections for housing, public services and productive industry over speculative developments.
• Introduce a moratorium on new data centres until the electricity grid can accommodate further growth without increasing costs for households or undermining Ireland’s climate targets.

Data centres now consume approximately 23% of Ireland’s electricity, one of the highest proportions anywhere in the world. 

Research by economist Dr Seán Fearon has estimated that data centre growth has already added approximately €715m to household electricity bills over the past decade, with costs expected to continue rising if expansion continues in its current trajectory.

Rosi Leonard, data centre campaign lead with Friends of the Earth Ireland, said: “Households are once again being asked to pay more for electricity while some of the world’s richest technology companies continue to expand their energy use at an unprecedented rate.

“The reduction in the PSO levy is welcome for consumers, but it should not distract from the bigger picture. We urgently need major investment in renewable energy and in our electricity network. The question is who pays for that investment and who benefits from it.

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“At the moment ordinary households are carrying far too much of the burden while data centres continue to place enormous pressure on the electricity system. That is neither economically fair nor socially sustainable.” 

Friends of the Earth Ireland said Ireland should follow international examples where governments and regulators are taking action to ensure large electricity users contribute more fairly to the costs they create.

Britain’s energy regulator has proposed introducing a new “Data Centre Commitment Fee” designed to discourage speculative projects that reserve grid capacity without using it, helping protect consumers and free up electricity connections for housing and other businesses.

Similar measures are also being introduced in several US states, including changes requiring data centres to bear a greater share of network infrastructure costs.