According to the latest statistics from the Environmental Protection Agency, Ireland’s greenhouse gas emissions have dropped to their lowest rates in thirty years. Figures indicate a 6.8 percent decrease in emissions in the previous year, succeeding a reduction of 1.9 per cent in 2022. Notably, this substantial decline happened during a time of strong economic growth.
Regardless of this encouraging progress, it remains urgently necessary to lessen our dependency on fossil fuels and take meaningful steps to reduce carbon emissions. One simplistic approach could be to cut back on the establishment of data centres, often seen as energy-intensive facilities with benefits that aren’t instantly recognisable to the general populace or, indeed, Ireland plc.
However, rather than suppressing energy requirements, I argue that contemplating increasing them by endorsing the establishment of additional data centres could be beneficial. The consequent energy demand could catalyse the growth of renewable energy resources.
At Deloitte, we regularly collaborate with various stakeholders involved in the continuous discussion about data centres, including providers, tech companies, and energy sector businesses. Based on this experience, it is my belief that data centres – and the computational power needed to support artificial intelligence (AI) advancements – are set to become the bedrock of progressive economies.
Even though this rise in demand might be unwanted, it signifies an unstoppable tide that should be acknowledged for the strategic advantage it can offer.
It’s evident that the newly formed Labour Party government in the UK is striving to reshape Britain’s economy. Central to this plan is their ambition to establish an “artificial intelligence sector” and eliminate “hurdles to new data centres”. Spain has also actively pursued the development of its data centre industry, announcing investments of roughly €22 billion this year.
The increased processing capabilities that data centres support are predicted to become the production hubs for a significant portion of the AI innovations we will come to depend on in the future. Both Spain and the UK recognise and appreciate their strategic significance.
As stated by the Enterprise Minister, the opposition to data centres does not align with reality. The tech industry in the country is evolving continuously with advancements in artificial intelligence (AI) and the progress towards electricity decarbonisation. There is an incredible potential to revolutionise both industries by merging their developments.
At present, there is an effective pause on the initiation of new data centre projects in Dublin, Ireland. The cause of this halt is the current energy supply shortage which may persist for several years, risking the opportunity to seize crucial future investments.
However, instead of seeing the high energy requirements of data centres as an obstacle, they could be understood as a chance to reconcile the technology industry’s expansion with Ireland’s national decarbonisation objectives. If we invest in renewable energy sources and technologies that could enhance the energy efficiency of data centres, Ireland could establish itself as a globally recognised leader in both realms.
The importance of using new data centres to boost Ireland’s budding AI industry has been recognised in countries like the UK and Spain. With its well-established data centre developers, Ireland has a competitive advantage. However, there is a critical need to hasten existing legislation allowing data centres to integrate with renewable energy sources.
Developing a robust demand base would also facilitate the prioritisation and acceleration of the necessary expansion of our national grid. Similar to other nations, Ireland is grappling with a grid supply shortfall. The current strategy to contain this issue involves curbing demand, especially from data centres, which is simply an act of dealing with the effects rather than the primary issue.
Looking at per capita electricity consumption, Ireland is placed 33rd, and when considering overall energy consumption, it slides to 37th position. If we aim to be the global forerunner in renewable energy, we must envision broadening our generation facility and our energy demands. Long-term income guarantees that span decades are vital for the financial health of these projects.
To reach our climate objectives, as suggested by PwC, an investment in emissions technologies for data centres is essential.
In order to drive a transformational shift in carbon emissions and economy, a bold strategy requiring an adjustment in perspective and action from all stakeholders is necessitated. This radical approach lies in viewing data centres, usually seen as large energy consumers, as key drivers in decarbonising the country’s energy supply and transmission infrastructure.
For this to happen, the Government needs to invest, designate state-banked lands for data centres, and more importantly, endorse and implement the use of renewable energy sources like wind, solar, or green hydrogen supported by sufficient battery capacity. Additionally, the progress and facilitation of the necessary infrastructure to support these advancements is vital.
The reshaping of such projects should be recognised as of critical importance, and should be rapidly implemented. Current suggestions for an infrastructure department could pave the way for a more consolidated and effective management method for these projects.
The ideal principle should be for these sites to strive to generate excess renewable energy beyond what data centres need, which could then be fed back to an enhanced grid system, making a significant contribution towards the Government’s green targets.
The tech industry will need to broaden its ventures to include renewable energy production surpassing their necessary needs. The State should also proactively facilitate data centre parks and prioritise crucial grid infrastructure. This process treads a challenging path, yet it opens a distinctive chance to dramatically shift our carbon footprint and improve our economy.
This new strategy is proposed by Harry Goddard, the chief executive of Deloitte Ireland.