Keeping the lights on: how energy alerts can impact FDI confidence

It has come upon us very quickly; Ireland went from being the bright data centre hub for Europe to threatened brownouts or indeed blackouts over the coming winter. It's not just data centres, but their growth and energy usage has only heightened the situation, leading to a potentially damaging international reputation, motions posted in the Dáil by the Social Democrats to halt the onslaught of new data centres, and a general concern for homeowners.

Eirgrid, the state-owned electric power transmission operator in Ireland, issued the warnings earlier in the year. Last month the warnings were softened as two gas generators at Huntstown and Whitegate previously out of action and needing parts, came back online, but increasingly Ireland is moving to a reliance on old-fashioned, less efficient and certainly less sustainable plants.

Retained

There is even talk of Moneypoint, the coal burning monolith, to be retained into the future to meet demand but only, according to the Minister for Transport, Eamon Ryan, as a last resort.

How serious are these reports? And how did Ireland go from being a high-tech centre to a country with energy issues? One indicator is the rise in system alerts; these occur when demand for electricity reaches capacity. While not actually resulting in a direct blackout, any unexpected event or the unplanned loss of power plant, and there may not be enough electricity to meet the country’s needs. This is a sobering thought.

Back in July, the fact that electricity demand was sparking these alerts, created unease in the multinational sector. IDA Ireland declared the alerts were "causing disquiet in the foreign direct investment community" in a submission to the Commission for the Regulation of Utilities (CRU).

Eirgrid says keeping the lights on in the coming winters is “likely to be challenging.”

There have been no less than eight such alerts since January 2020. Additional issues that may impact supplies are lack of wind, and the impact of Covid on maintenance.

Demand for electricity is generally on the rise, after the artificial reduction over the Covid inspired lockdown. People are moving away from fossil fuels and other polluting forms of heat and energy. Electric cars are being promoted and then there are the large data centres.

"It is clear from the [Eirgrid] report that a new, cleaner gas-fired generation plant is required now to address this issue, especially for when wind and solar generation is low," Eirgrid chief executive Mark Foley said.

“Appropriate volumes of dispatchable flexible gas generation are critical to support the transition to a low-carbon power system into the next decade, as we move to 70 per cent renewables by 2030 and, ultimately, a zero-carbon power system.”

That is why, in the Dáil last month, the Social Democrats introduced a motion calling for a moratorium on data centres. "We do not favour a ban – we want a pause to conduct an analysis of the environmental, economic and energy implications of the current explosion in data centres. It was a reasonable, sensible motion – which the government didn't support," explains Jennifer Whitemore, Wicklow TD for the Social Democrats.

But what is the answer? Like most complex issues it would appear to be a combination of elements. The country is shifting over to renewable energy sources with a target of 70 per cent of Ireland’s electricity powered by renewables according to Government targets.  But wind, solar and bioenergy need the assistance of other technologies to unlock their full potential.

Data centres, demonised by their consumption and yet used by everyone online, are expected, if unregulated, to be on track to consume almost three quarters of the national grid’s output by the end of the decade – whether that is from renewable energy or traditional. There is talk of datacentres investing in their own renewable energy plants, using the heat generated within the centre to heat neighbouring towns, using demand loading to avoid peak consumption times and even bringing in their own generators.

But it’s not a data centre problem, it’s a national grid issue. Managing energy production and consumption needs to be at the heart of the country’s management going forward – not just for the FDI sector but for the vulnerable at home facing into blackouts in the cold of winter.