Reduced gas prices for data centres ruled out by energy regulator, Dáil committee told

CRU said considering a limit or cap on data centre development was not being considered, as it was 'not within our bailiwick'.

Discounted gas prices for data centres are not being considered, the energy and water regulator has said.

It had been reported the Commission for Regulation of Utilities (CRU) was considering offering contracts to data centres that see a reduced network tariff apply when the energy supply is interrupted in periods of high-demand.

Commissioner Jim Gannon told an Oireachtas committee the CRU was in the process of an "interruptible gas contracts" consultation as part of protecting future energy supplies.

He said considering a limit or cap on data centre development was not being considered, as it was "not within our bailiwick".

He then clarified the CRU was not considering a discounted gas price for data centres, but a discount on network tariffs was being considered.

"There is no discount being offered on gas as the commodity and the price of gas," he said.

"What is being considered is that if a gas connection is interrupted, there would be a reduction in the transmission or distribution network tariff should the interruption happen at the site."

He said network tariffs had increased by 175% for large energy users between 2020 and 2026, while the comparable increase in network charges for domestic users was 45%.

He said the CRU was carrying out a review of the drivers of network tariffs and costs.

"We are in the middle of a review of those network tariffs to ensure that people are paying their fair share, so to speak — cost-reflective tariffs."

Asked whether it was fair domestic customers pay twice per unit of electricity as data centres, Mr Gannon encouraged users to switch where they can.

"Larger energy users have the ability and do engage in direct negotiations with suppliers, whereas that is not the case for residential consumers who tends to operate in the market, and that is why we continue to encourage people to switch and to keep competition alive."

There are 72 data centre buildings in Ireland and 36 sites, according to a report from the Department of Enterprise published in January.

The majority of data centre buildings (69) are located in the Greater Dublin Area, which EirGrid's Errol Close told the committee would be viewed as a "constrained area" but where data centre proposals would be considered on a "case-by-case basis".

Tensions have increased over the rapid rise of data centres, which have grown from using 5% to 23% of Ireland's energy supply over 10 years.

New data centres must demonstrate they can provide 80% of their energy needs through renewable resources.

Mr Gannon said figures from the International Energy Agency indicate conventional data centres require between 10 and 25 megawatts of power, and AI-focused facilities can exceed 100 megawatts, comparable to the annual energy use of 100,000 households.

Nicholas Tarrant, managing director of ESB Networks, said he could not think of an example where new housing developments were delayed "where it directly links to data centres".

Asked whether a national education campaign should take place warning people about the amount of energy used by AI, Mr Gannon said: "I can't see that it would do any harm."