Future of 30 Irish data centres uncertain as regulators propose curbing development

A question mark hangs over the prospects of more than 30 data centres getting promised electricity grid connections after regulators proposed curbing their development.

The Commission for Regulation of Utilities (CRU) has told national grid manager, Eirgrid, and ESB Networks, to prioritise applications for connections to the electricity system from data centres in locations where power supplies are not squeezed.

Sources questioned whether the regulator’s move this week would prevent Eirgrid from going ahead with agreements to connect an estimated 30-plus data centres to the national electricity grid.

Fears are growing that the number of data centres operating in the Republic will put electricity supplies under increased pressure, particularly in the Dublin area, where demand is highest.

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Eirgrid has agreed to connect data centres, likely to require 1,800 mega watts (MW) of electricity in total, to the grid, while it has applications from similar businesses seeking a further 2,000 MW.

It is understood that Eirgrid’s connection agreements are with data centres in the Dublin area, where electricity supplies are under greatest pressure.

Consequently, industry figures argue the regulator’s direction, that the grid operator prioritise data centres in areas where supplies are least constrained, could prevent it going ahead with these agreements.

Future grid consents

The average data centre needs 50MW of electricity, indicating that more than 30 data centres that have agreements, but which have not yet been connected to the grid, could be affected.

The regulator’s direction could effectively rule out future grid consents for any applicants based in or close to the capital, observers say. However, it has no consequences for data centres already connected to the electricity supply system.

Laws dating back to 1999 oblige Eirgrid to connect customers such as data centres to the grid, while agreements that it has entered into with developers, but not yet fulfilled, are likely to be legally binding.

The CRU issued the directive in a document launching a consultation on data centre connection in response to concerns raised by Eirgrid about their overall impact on security of electricity supplies.

Eirgrid spokesman David Martin confirmed that the company has "engaged extensively" with the CRU on the impact that data centres have on security of electricity supplies.

He noted that the CRU had begun a consultation on the issue. “The outcome of this consultation will provide clarity to Eirgrid and the data centre industry on next steps in terms of the future facilitation of data centres on the electricity system,” he said.

“We look forward to processing connection applications for data centres in line with the resulting policy once the outcome of this consultation is determined by CRU.”

Eirgrid itself suggested limiting new data centre connections to locations outside the capital when it sought public views on the future development of the national grid earlier this year.

In a letter published with the CRU consultation document, Eirgrid's group head of regulation, Bill Thompson, warned that the Republic faces a more acute security of supply problem than it has had in the past.

He confirmed that Eirgrid has connection agreements for 1,800MW and applications for a further 2,000MW.

"To put this in context Ireland has a current demand peak of around 5,500MW," he said.

“A data centre with a load of 60 MW would be comparable to the load usage of a large town/small city such as Kilkenny.”

He adds that cities including Amsterdam and Singapore have halted or limited data centre development.

Gary Connolly, founder of data centre industry body, Host in Ireland, said members have not found regional locations suitable, as they need electricity supplies and "world-class resilient fibre".