Dáil Éireann Debate, Thursday - 10 April 2025
9. Deputy Paul Murphy asked the Minister for the Environment, Climate and Communications his views on the role of data centres and capacity payments in pushing up the cost of energy for households and privatising the energy system; and if he will make a statement on the matter. [17930/25]
View answerIt was recently reported that householders collectively paid approximately €454 million per year in capacity payments to data centres between 2007 and 2018. Since then, it has more than doubled to €1 billion per year. With 11 more data centres under construction and applications for 30 more, this massive subsidy form ordinary people to data centres is only going to grow. Is the Government going to do nothing to stop data centres from pushing up household energy costs?
I thank the Deputy for the question. The programme for Government acknowledges the increased energy cost pressures on households and businesses, and aims to bring forward a number of measures to help contain energy costs. These include bringing forward taxation measures to help contain energy costs. We have established a cross-government energy affordability task force to identify, assess and implement measures that will enhance energy affordability for households and businesses. We will also carry out a review of the regulatory framework with a view to increasing Ireland's overall supply and interdependence.
The Government also recognises that data centres are critically important infrastructure for our modern economy. They provide the foundation for almost all online aspects of life. Our intent is to deliver a balanced approach to facilitating additional demand for energy while also ensuring the competitiveness of our energy system.
It should be noted that the core driver of high energy bills for Irish households, consumers and businesses in recent years has been high wholesale energy prices. Ireland is a price taker on international energy markets and the rise in wholesale gas prices since the Russian invasion of Ukraine and the connections between gas and electricity prices has, therefore, had a serious impact on householders' energy costs. Delivery of modern, flexible, detachable generation capacity is important to support a high renewable electricity system. This new modern capacity allows for the integration of a large volume of wind and solar energy projects that displace the need to run fossil fuel plants and thus reduce wholesale market prices. This capacity is procured through competitive auctions in the all-island capacity remuneration mechanism, and the most recent auction delivered a range of technologies, including long duration storage and demand-side responses which lessen Ireland's dependence on fossil fuel imports.
That sounded like an admission that data centres are pushing up household energy prices. The Minister of State might confirm that the Government accepts that is happening. That means the crazy data centre policy of the Government to allow big tech to come here and dump as much of this 21st century toxic waste as it can is not only driving us further from our climate goals, where the extra energy used by data centres is more than the extra renewable energy we have added to the grid through wind power since 2017, but is also driving household energy bills even higher. This is madness in the short, medium and long terms. We are prioritising the profits of big tech corporations and the need for data centres, which provide very few jobs. They guzzle electricity and water. We are putting them before people's needs today and the need for a habitable planet.
I thank the Deputy. I disagree with his comment that data centres create only a few jobs. The role that data centres play in the economy is significant for large tech and foreign direct investment, FDI. We will continue to support our commitment to working with key stakeholders in that area, including the IDA, to identify and support new approaches. That is important. We need to integrate large-scale demand and sustainability into our energy system but we also need to strike a balance. New data centre grid connections are now considered by system operators on a case-by-case basis. We are also in line with the Commission for Regulation of Utilities, CRU, around the direction to system operators around data centre grid connection. The CRU is also working to reprofile when and where to establish these data centres to ensure that the developments have access to a renewable source. The CRU has also completed its review of connections of large-scale energy users and the Government is reviewing the CRU's proposed direction in this regard.
On the question of jobs, the Minister of State might confirm how many jobs are directly in data centres. Would I be correct in saying that there are fewer than 3,000 jobs in data centres? For a sector that is going to be using 30% of our electricity by 2030, the waste of electricity and water, and the impact that has on housing construction and other issues, is quite incredible. We recently found out that by 2032, 9% of gas demand will be coming from just the 11 islanded data centres that are currently connected directly to the gas network. If the Government grants permission to the two dozen data centres that have applied for direct connection, that demand will quadruple to 36% of gas demand. We are burning fossil fuels directly to run data centres. We are looking at an increasingly privatised energy system where we pay through the nose for data centres to burn gas in onsite gas power plants. That is linked to the discussion we have already had about LNG. This is, of course, likely going to be fuelled by fracked US LNG.
The Deputy needs to consider that the tech investment going into these data centres and the AI revolution is leading the way around renewable energy solutions.
No, it is not. It is not at all.
Ireland needs to be to the fore in this regard. We all know that AI will unlock opportunities to produce solutions-----
Does the Minister of State know how much extra energy we are going to need?
Why does the Deputy interrupt people all the time?
-----to energy and efficiency measures. We are certainly committed and have said that we will ensure we have clear principles for sustained data centre development. We published our statement on the role of data centres in Ireland's enterprise strategy. We want clearer guidance for decision makers in the planning process. We also want to encourage the data centre sector to implement decarbonised energy solutions that not just increase efficiency but also decarbonise by design. That is important. It is our preference. We want to transition to a situation whereby we have renewable energy sources close to any of these new infrastructural developments.
