The enterprise agencies operating under the aegis of my Department - the IDA and Enterprise Ireland - undertake evaluations of grant-aided projects using a cost-benefit analysis model developed by my Department. However, data centres are not, in general, grant-aided by the agencies.
Environmental assessments of emissions are made through the planning process where an Environmental Impact Assessment is required for all developments of a certain scale, and further through an Environmental Protection Agency (EPA) licensing arrangement where a development is an industrial process with the potential for significant environmental impacts. The Deputy will be aware that policy responsibility for these functions lies with the Minister for Housing, Planning and Local Government (as regards the planning process) and with the Minister for Communications, Climate Action and the Environment (for the EPA) respectively.
In June 2018, the ‘Government Statement on the Role of Data Centres in Ireland’s Enterprise Policy’ was published by my Department, following consultation across Government, including with the Department of Communications, Climate Action and the Environment. The Statement sets out clearly that the existing demand for data centre development poses opportunities and challenges for Ireland, and that a planned approach to addressing these is required.
I am aware that data centres present challenges given that they are very energy intensive, and in the Dublin region in particular, there are grid infrastructure capacity constraints. Eirgrid have made clear that there will need to be limitations on connecting large new demands. However, data centres are also important to ensuring that Ireland continues to be a leader in the digital economy. The Government Statement sets out how we will strike a balance between the challenges and opportunities.
To address the subject of carbon emissions, while I cannot verify the projection raised in the Deputy's question, I would highlight that many of the large data centre operators in Ireland have made public commitments to using 100% renewable electricity as soon as practicable. Further, as Ireland increases the level of renewable energy on our electricity grid towards the 70% target set out in the Climate Action Plan, all electricity powered operations will by definition become more carbon efficient. I am also aware that a number of data centre operators in Ireland have chosen to sign 'Corporate Power Purchase Agreements' to buy electricity directly from renewable electricity generators. I believe that a more sophisticated 'Corporate Power Purchase Agreements' market in Ireland could act as a catalyst for investment in renewable electricity generation by large data centre operators and officials in my Department and in IDA Ireland are working with the Department of Communications, Climate Action and the Environment, as well as the SEAI, to enable that to happen.
Additionally, the Government Statement highlights that IDA Ireland has increased its emphasis on promoting a range of regional options for data centre investment. They have identified specific sites in regions throughout Ireland that are potentially suitable for accommodating the sustainable development of large scale data centre projects in terms of proximity to necessary energy and other appropriate infrastructures, subject to the required planning and environmental oversight. IDA Ireland only facilitate investment in projects that are deemed likely to deliver real regional economic benefits - and do not provide any financial supports for data centres in the Dublin region.
While the number of people directly employed in data centres may be relatively small, the fact is there are over 120,000 employed in the ICT sector. Data centre presence in Ireland raises our visibility internationally as a technology-rich, innovative economy, which, in turn, places Ireland on the map as a location of choice for a broad range of sectors and activities that are increasingly reliant on digital capabilities including manufacturing, animation, retail, medical devices and financial services – for both Irish- and foreign-owned enterprises. They also facilitate many other activities across the economy, enabling e-payments, securities transactions, banking, fraud protection, cloud telephony, inbound, streaming, video and outbound IP traffic. The storage, processing and analysis of data is a rapidly growing business sector in its own right, and is the equivalent for digital goods, of factories for physical products. Data centres securely store and manage the data which keeps much of our information-based economy and society moving.