Just because Ireland is good for data centres does not mean they are good for us

The third largest worldwide hub for data centres is Ireland, according to a recent study by US-based Synergy Research. In gold and silver medal positions are the US state of Virginia, which is next door to Washington DC, and Beijing. Between them those two locations make up 22 per cent of the global hyperscale data centre capacity. There are good reasons why they are major hubs for data storage – huge quantities are generated nearby and there are security issues relating to where much of the local data is stored.
Ireland is a minnow when it comes to generating data, so most of what is being stored in the State’s massive data centre infrastructure is generated elsewhere.
There are a number of reasons why Ireland is a preferred location. Our geographical position means being well served by cables between the United States and the rest of Europe, making it easy to access data stored in Ireland from these major economic centres. We are EU members, so data protection legislation is strong. Our temperate climate is a plus. It’s also possible that having data centres gives “cover” to their parent firms who locate their profits in Ireland.
However, just because we are attractive for data centre operators does not mean that unlimited investment is a good idea for those of us living on the island.
Data centres, wherever they are located, require huge amounts of electricity. In Ireland’s case they account for more than a fifth of our usage and that share is growing fast; in 2015 it was just 5 per cent.
It’s already proving challenging to produce more green electricity, especially with new wind farms facing planning obstacles. However, the huge increase in electricity demand from data centres makes it harder to achieve overall reductions in emissions from electricity generation. We need to increase the capacity of the generation system and of the grid, given the extra demand, while at the same time trying to replace old fossil fuel plants. That’s a big job and isn’t easy to achieve.
[ David McWilliams: Ireland should not be blocking data centres, we need more of themOpens in new window ]
But not only that – the cost of doing so is affecting everyone’s electricity bills. It is only fair that data centres should pay the full cost of expanding electricity capacity in a carbon-neutral manner, so that they don’t impose costs on the rest of us.
Data centres also require vast amounts of water to cool the storage devices. To give a sense of the scale involved, the water used by data centres in the US is equivalent to that used by a modern city of three million people. The demand for water from the data centre industry is already giving rise to serious concerns in Virginia.
In Ireland up to now, data centres’ appetite for electricity rather than their water consumption has been seen as the main problem. There is of course potential to reuse the water – and recoup some of the energy loss – by district heating schemes, but this has only been done on a small scale to date.
In the short run the construction of data centres can provide substantial employment, although when up and running they employ relatively few. However, in a country with a major housing shortfall and other infrastructure deficits we would be better deploying the limited supply of construction workers and building expertise to provide more homes and fix other infrastructural problems, rather than in adding to our stock of data centres.
So Ireland should not allow any major new data centres to be built in the next couple of years. Any that are already authorised should pay a special price to cover the costs their arrival on the system will impose on the rest of the economy.
Ideally, these decisions should be taken by the public bodies with expertise in the area, rather than by local authorities. Last week planners in South Dublin refused permission for Google to build a new data centre. This decision was made because of “insufficient capacity in the electricity network (grid) and the lack of significant on-site renewable energy”. This was the right decision, for the right reasons – but the local authority was the wrong body to adjudicate on energy capacity matters.
The expertise in assessing electricity capacity issues lies with EirGrid, and its regulator, the Commission for Energy Regulation. The Environment Protection Agency is the State body with expertise to regulate environment matters. Local authorities are not experts on electricity capacity, nor on greenhouse gas emissions, so it does not make sense to have them deciding on matters where the expertise lies with other official regulatory bodies.