Ireland can “absolutely” cope with the growing energy needs of data centres and, if the next government embraces the sector, can “mirror” the success of the aviation industry here, according to the largest owner of renewable assets in the State.
The International Energy Agency expects data centres to consume close to a third of total electricity in Ireland by 2026. They currently eat up about 21 per cent of all metered electricity here. By way of comparison, data centres worldwide consume 1-2 per cent of overall power.
The current boom in artificial intelligence (AI) is rapidly fuelling increased need for data centre capacity, as AI relies on vast consumption of data, and, by extension, energy. A ChatGPT query is said to consume 10 times more electricity than a Google search.
Responding to the alarm around this, Paul O’Donnell, partner with Schroders Greencoat, the investment manager that administers Dublin-based Greencoat Renewables’ portfolio, said Ireland could “absolutely” cope with more data centres if it upped its investment in renewables.
Mr O’Donnell told The Irish Times his company has invested about €1.5 billion in the Irish renewables market – wind and solar energy – but that the sector is going to require investment of €15-20 billion in the next decade.
He said Ireland “already has the basis of having 100 per cent renewable electricity on the grid by the time we get to the mid-2030s ... and is already in an incredible place in terms of being a low-carbon environment for building data centres”.
While Mr O’Donnell admitted the 32 per cent figure is “high”, he insisted the State would be able to “handle and manage” a growing demand for electricity from data centres through renewable energy and new technologies coming down the track.
“When you look at the other side of the equation, and the growing generation we will create in renewable electricity, we are super well positioned to have a very low carbon electricity grid by 2030,” he said.
[ Greencoat Renewables sees net cash generation decline by nearly 10%Opens in new window ]
“So we are able to handle and manage a growing demand for electricity from data centres, and the technologies that are coming – including things like longer duration batteries and biomethane – provide us with perfect conditions to build out net-zero data centres.
“Achieving that is not straightforward. It requires the technology companies to commit to using 24/7 renewable power. It requires renewable investment to sit alongside the data centres, and it requires innovation at all levels to make sure this happens.
“There isn’t an easy way to deliver 24/7 net-zero data centres all year round, but Ireland is starting from such a competitive advantage here that we have a real chance to be a world leader, mirroring the success we have seen in the aviation sector in the past 25 years.”
Mr O’Donnell said the potential size of the sector in Ireland over the next decade is “a question for the next government”.
“Right now there is essentially a moratorium on building new data centres in most parts of Dublin, and we have limited ability from the grid operator for them to be built in other parts of the country,” he said.
“The level we are able to build out – and that growth – is dependent on Ireland setting a policy as to how it sees growth in large energy users interacting with our growing renewable energy market.
“The alternative – not doing this – is that without building out large energy users on the island of Ireland and not starting to create electricity demand locally for what we’re producing, it essentially limits the ability for us to grow our renewables market.”
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