IDA says power constraints should not lead to curbs on building data centres

IDA Ireland has called for action to avert the risk of power blackouts, saying questions over electricity supplies are “unhelpful” to efforts to market the State as a global business hub.

But the inward investment agency has also said that power system constraints should not lead to curbs on building energy-intensive data centres, arguing they are an integral part of the technology sector that employs about 140,000 people.

“It’s clearly less than optimal that we have a situation where there are amber alerts or the possibility of outages of any description,” said IDA chief executive Martin Shanahan in an interview with The Irish Times. “IDA’s view is that every step that can be taken should be taken in order to address this.”

His intervention follows moves by market regulators to prolong using coal and oil to generate power because of serious electricity “supply challenges” which are likely to persist for years.

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“The demand for electricity today in 2021 is not a surprise, and trying to manage demand that exists is obviously hugely problematic. The answer clearly lies in ensuring that we have the supply,” Mr Shanahan said.

Urgent repairs

Constraints on the network as demand surges have been compounded by low wind speeds and the closure of two of the biggest and most modern power stations on the grid for urgent repairs. One of those returned 12 days ago and the other is due back this month, but national grid operator EirGrid reported last Friday that there had been “forced outages” at three other power stations.

Mr Shanahan said international companies that need large amounts of power have told IDA Ireland of their concern at the constraints in recent times and he has relayed such anxieties to the Government and regulators.

“They believe it’s less than optimal and they want to see what the short-, medium- and long-term plan is in order to address the issues,” he said, adding that steps taken in September to tackle the supply crunch were welcome.

“IDA wants to ensure that the energy supply which has long been part of our positive arsenal to market Ireland remains part of our positive arsenal to market Ireland. That is hugely important – and questions over energy supply obviously are unhelpful in terms of marketing Ireland.”

Plans are already in train to procure emergency generation from winter 2022-23 until new capacity comes on stream.

Supply issues

Although a decision is expected soon from the Commission for Regulation of Utilities whether there should be curbs on building new data centres because of supply issues, Mr Shanahan said such a move would be wrong.

“We have set ourselves out as a technology hub. An integral part of that ecosystem is the availability of data centres,” he said.

“I would be concerned that we decide to limit enterprise activity, which ultimately is contributing to the economy and paying for the things we all enjoy as citizens and as a society, in the short term.

“You can’t turn it off and on. You can’t decide we maybe don’t want a certain type of investment today – data centres – but actually at the point where we have significant offshore wind available we want them again. It doesn’t work like that.”