“IT’S JUST INCOMPATIBLE with our climate commitments.”
Tim Hannon of Futureproof Clare, a climate conscious NGO that, along with several other environmental and social justice groups, is challenging Ireland’s rapidly expanding data centre industry and its growing carbon footprint.
The computer science student points to a proposed €450m data centre on the outskirts of Ennis that, at full capacity, would need 200MW of power, “as much electricity as 200,000 homes”, almost double the population of Clare.
Worst still, Hannon says, are plans for an onsite energy centre of 18 natural gas engines that can supply 120MW of its power needs, with a further 66 diesel generators as back-up. According to planning files, electricity use at the centre will produce 657,000 tonnes of carbon dioxide (CO2)-equivalent emissions annually.
While the company states in its application that the overall impact to climate from these emissions are “deemed indirect, negative, long-term and slight”, Hannon says this would equate to 1% of the current annual emissions for the entire country.
“I think this case will shape data centre policy nationally because it’s the largest one outside of Dublin, and it has major on-site fossil fuel infrastructure. I think it will dictate where things go going forward.”
The case is before An Bord Pleanála, but even if this project doesn’t get the go ahead, there are other large data centres in the pipeline. And as the industry rapidly expands, alongside its well documented energy needs, its emissions are growing in tandem.
As part of our LIGHTS OUT investigation into the energy crisis, Noteworthy examined planning files, emissions licence applications to the Environmental Protection Agency and energy data submitted to the EU, to pinpoint the emissions profile of the growing sector.
We also sent dozens of Freedom of Information (FOI) requests and examined State reports spanning a decade to chart when authorities became aware of the increasing power needs of the sector, and how they responded. We can now reveal:
- Noteworthy analysis of EU data finds direct onsite carbon emissions have ballooned to be over 35 times higher within the space of a decade
- The EPA has received a dozen emissions licence applications to use diesel emergency generators more often or build onsite gas plants
- Almost 350 back-up diesel generators are registered with the EPA that experts fear may be used during power shortages over coming winters
- EirGrid told data centre operators in 2019 that significant new power generation would need to be built to meet contracted data demand
- Concerns over the energy needs of data centres were flagged by EirGrid and the ESB to the energy regulator as early as 2014, yet major rule changes to limit grid access only came into effect in November 2021
- As the State tightens up on grid connections, more data centres are looking to switch to gas, with Gas Networks Ireland estimating that connected data centres account for 6% of projected gas demand in 2030
You can also explore our findings by listening to The Explainer x Noteworthy podcast on this investigation:
‘The Goldilocks zone’
From punch cards to floppy disk to CD-ROM, and now the cloud – Ireland has paid witness to all of the major data storage evolutions in the tech sector.
Now, with cloud computing growing globally by 550% between 2010 and 2018, our small island has seen unparalleled growth in the data centre industry, accelerating from little more than a blip on the international radar a decade ago to become Europe’s largest data centre market.
The traditional advantages of setting up shop in Ireland, such as political stability and an educated and native English-speaking workforce, are compounded by key advantages that Dublin holds – a transatlantic cable system and a 44 km fibre ring connecting all major business parks in the capital in close proximity to the offices of the leading tech companies.
In a 2014 presentation by EirGrid to the Commission for Regulation of Utilities (CRU), the electricity system operator said such factors put Dublin in “the Goldilocks zone”.
Another vital ingredient – a “safe, secure, reliable power system” – is also needed, EirGrid said. At the time, surplus capacity was predicted to be available for the next decade to meet energy needs.
Today, however, we are in a very different scenario, with the State scrambling to ensure the lights stay on this winter – and the growing power needs of data centres is at the centre of the problem.
A reduction in emissions from power generation was held up as one of Ireland’s key climate success stories in recent years, largely down to the reduced use of the ESB’s coal-fired Moneypoint station in Co Clare from 2015 to 2019.
Because of severe capacity shortages, Moneypoint is back fully fired up with a “huge amount of coal in the mix at the moment”, according to Paul Deane, energy and climate policy researcher at University College Cork (UCC).
Much of Ireland’s current energy woes stem from these capacity shortages as more frequent breakdowns in an ageing power plant fleet and failure to build out new stations come up against growing energy demand.
“That’s why our emissions are increasing at a time when they should be decreasing. And this is in part because of data centres,” said UCC’s Deane.
This is borne out in data from the Sustainable Energy Authority Of Ireland (SEAI) that found energy-related emissions – over half of all emissions in the State – were up 5.4% in 2021. Energy demand from the ICT sector, including data centres, increased by 17.9% and made up almost 4% of total energy use.
The key stress on the system is the growing power needs of the Dublin region at peak times, with much of the demand coming from data centres, some of which need as much energy as large towns.
Between 2018 and 2021, annual increases in energy demand were equivalent to adding 140,000 households to the power system each year, and the sector’s needs continue to grow. EirGrid’s latest projections show data centres and other large energy users are expected to account for over a quarter of electricity use by 2031.
‘Fighting against fossil fuel expansion’
This is why, for Eoin O’Leidhin of Gluaiseacht, an environmental and social justice NGO, “fighting against data centres is fighting fossil fuel expansion”.
While accepting that, in 15 or 20 years time, data centres may be powered by offshore wind or battery storage, O’Leidhin said we are just not there at the minute as we are “still backboning the [power] system with increased use of fossil fuels”.
“We can see directly the emissions from electricity generation. It’s rising and it will probably continue to rise for the next couple of years because of the level that’s coming out of data centres,” argued O’Leidhin, who works as an energy research engineer.
In terms of the overall sector’s climate impact, the industry estimated that its emissions accounted for around 1 million tonnes of CO2-equivalent in 2020 or 1.85% of Ireland’s carbon emissions.
Alongside the emissions from electricity coming from the grid, there are also emissions from on-site power generation at data centre facilities that O’Leidhin and other climate activists fear will grow as the State looks to curtail data centre use of the grid.
Against the backdrop of the energy crisis, in November 2021, the CRU issued new directions to EirGrid and ESB Networks to factor in constraints in areas where the data centre would connect.
Now, in order to get a grid connection, data centres must reduce power consumption during times of power shortages and be able to power themselves from on-site generation and/or battery storage in times of capacity scarcity.
On-site generation on the rise
Current emissions from this on-site generation is seen in data that 20 of around 70 data centres operating in Ireland must send to the EU emissions trading system (EU ETS) every year due to the size of their operations.
A Noteworthy analysis of emissions data shows an increase just under 1,000 tonnes of CO2-equivalent emissions in 2012 to over 35,000 tonnes in 2021. This is mainly down to one data centre that has gas generation on-site and accounted for the vast majority of the Irish data centre emissions on the EU ETS system last year.
On-site emissions look set to steadily rise as power needs grow, with an increase in applications for EPA industrial emissions licences - required for centres that need over 50 MW of power or may need to use back-up fossil fuel generators for long periods of time. This shows “the scale has massively expanded”, O’Leidhin said.
To date, two data centres have received a licence. One centre, for example, has permission to operate gas units for primary power purposes that would emit almost 200,000 tonnes of CO2-equivalent emissions per year, roughly 0.33% of Ireland’s current total emissions.
The other facility is currently licensed to be powered with onsite gas generation for the first 24 months of operation, with plans to then switch to be predominantly powered by the grid.
As reported by The Business Post earlier this month, Microsoft also recently applied to the EPA for a licence in relation to a proposed 170MW gas power plant as part of a new data centre development.
We contacted Microsoft for comment. It did not reply to the specific questions posed but instead pointed us toward online material on agreements with wind farms, use of battery storage, and plans to reduce water use.
There are a dozen other live licence applications before the EPA. Nine of the 12 applications are linked to Amazon and run directly from the grid, while some of the data centres have battery storage and solar panels to cover a small portion of energy needs.
These data centres are not planning to install gas plants but are seeking EPA licences for their back-up generators which now need to be used to power their facilities when the grid is under stress. We contacted Amazon but it did not reply at the time of publication.
There are almost 350 back-up diesel generators currently registered with the EPA. Dr Patrick Brodie, an assistant professor in UCD researching the environmental politics of digital infrastructure, is concerned about the potential climate ramifications if these generators are used more frequently.
While to date, operators have rarely had to use their back-up generation, Brodie said that this is now “a very real possibility” with energy shortages coming up this winter.
“So, in a situation where they need to be running constantly on this backup power, that’s a huge problem,” according to Brodie.
UCC’s Paul Deane told us the idea that we would be speaking about the very real possibility of data centres using their back-up generators for more than just testing would have appeared “ridiculous” this time last year.
Supporting climate goals
Cloud Infrastructure Ireland (CII), an Ibec trade association that represents the likes of Amazon, Google and Microsoft, told us that climate concerns are unfounded.
CII pointed, for example, to research it commissioned from Baringa consultants this year that, it said, points to data centres as “critical enablers of decarbonisation”.
“They significantly reduce the emissions from computing [as] they typically use 80% less energy than traditional on-premises servers to do the same amount of work,” a spokesperson said. “They reduce the need for travel and physical goods, lowering emissions from transport and manufacturing,” they added.
In 2013, EirGrid was satisfied that State plans at the time to source 40% of electricity from renewables by 2020 “should be able to satisfy the Data Centre thirst for green energy”.
This is no longer the case, however, with an EirGrid webinar with data centre operators in December 2019 – released under FOI – outlining how contracted data centre load at the time would require new power generation to be built out.
The industry, backed-up by Wind Energy Ireland, is keen to stress that it is now providing an alternative route-to-market for renewable energy through Corporate Power Purchase Agreements (CPPAs) that will help to decarbonise the Irish electricity sector.
A CPPA is an arrangement where a company procures renewable electricity through a direct contract with a renewable generator. According to Cloud Infrastructure Ireland, its members are “committed to sourcing our electricity from renewable sources”.
“We are (through CPPAs) facilitating 1350MW of renewable energy (wind and solar) coming on stream-with no Government or consumer subsidy,” a spokesperson said.
Although it is “good from a policy pull” to have data centre operators looking to go net zero in their operations, UCC’s Paul Deane said that, so long as they are connected to the power grid, and “it’s not windy, and it’s not very sunny, they’re using fossil fuel fired power generation, like all of us”.
CRU direction fuelling gas connections
A new government position on the industry also highlights the “undesirability” for data centres to have direct gas connections. Growth in this area, the policy states, “could result in [the] security of supply risk being transferred from electricity to gas supply”.
Yet, more data centres are now switching to the gas grid for their power needs as a result of the new CRU electricity network connection policy released last November.
The CRU’s Commissioner Aoife MacEvilly told the Committee on Climate Action in September that Gas Networks Ireland (GNI) “started seeing increased requests for data centre connections… from the time that we put in place the new connection policy”.
There were warning signs that this could happen, with the SEAI outlining its concern in a submission to the CRU “that a measure stipulating that data centres install fossil fuel-based generation facilities will have an adverse impact on national emissions”.
According to records released to our team, as of mid-September 2022, there were 14 data centres contracted to GNI, with an additional 12 formal enquiries and eight informal enquiries on the cards.
“Based on the assumption that all data centres currently contracted to connect to the gas network are fully built and are operating at full capacity,” GNI told us that the estimated annual demand from data centres is 6% of the total volume of gas demand in 2030.
Much like EirGrid and ESB Networks, GNI must offer access to the network in accordance with law and CRU direction, however, our analysis of public records show GNI and its parent company Ervia were openly marketing gas to data centre companies for several years before the recent direction from the CRU.
In GNI’s network development plan for 2016, for example, it said that it was developing a combined offering of natural gas, renewable gas and combined heat and power “as the primary source of energy for the data centre sector”.
An Ervia brochure, first released in 2018, also states that powering data centres with natural gas is cheaper than with grid electricity and that operators could seek fixed gas prices with an “abundant capacity for additional connections” at the time.
Eamon Ryan, the Minister for Climate, is not best pleased with increasing gas connections, and wrote to the CEO of GNI, Cathal Marley, in July 2022 outlining “it would not be appropriate” to sign any more contracts to connect data centres.
GNI informed developers of a temporary pause for enquiries in August but Minister Ryan’s instruction hit a legal snag as a change in legislation may be required to halt any further connections.
Records released under FOI show that there are ongoing discussions between the CRU, the Department of the Environment, Climate and Communications (DECC) and GNI as to the legal basis to disallow issuing new connection offers to data centres.
A spokesperson for GNI confirmed to our team that it is actively engaging with the Department and the CRU. It is also advising data centre customers that they should consider how they will demonstrate their pathway to decarbonisation in line with the new government position.
Shift in direction
The industry is clearly not happy with this development, according to an internal briefing for senior management released to our team by GNI.
The briefing from early September 2022 indicates that correspondence from data centre customers was already becoming “increasingly formal”. It stated that, the longer the “pause” in connections goes on, the more likely the “legal engagements and challenges to the GNI position” will increase.
The industry has also questioned the general shift in direction from the regulator and the State to curtail electricity grid connections as the power demands of the sector were known for years.
For example, in a submission to the CRU’s consultation on the grid connection policy, Cloud Infrastructure Ireland said that data centre growth was included in every annual capacity statement published by EirGrid since 2015.
While the business group recognised that demand was increasing, “this growth has been well known by the system operators for more than half a decade,” it said.
Our analysis of dozens of public reports shows that there is some validity to this argument, with EirGrid’s understanding of the growing demand dating as far back as 2013.
That year, in its Generation and Capacity Statement, it outlined ”significant expansion” of the sector. The overall tone, however, was positive, highlighting the “favourable conditions” Ireland offered as a location.
Yet, within a year, the rate of applications and the speed at which centres were being built started to raise some alarm bells for the transmission operator, and it let the energy regulator know.
A presentation delivered in October 2014, released to our team under FOI, shows that shrinking installation times and “significant growth” expected by 2020 left EirGrid concerned that it would be “challenging” to deliver connections to accommodate the industry’s power needs.
Further documents released under FOI show that ESB Networks also informed the CRU in August 2014 about potential difficulties in meeting growing demand from data centres that “require large tranches of capacity to be delivered within very aggressive timelines”.
This “step change” in industry interest continued into 2015, with EirGrid pointing to “applications and queries for an unprecedented increase in large scale demand”. Connecting all these data centres, it said, had the potential to almost double Dublin’s electricity load built up over 90 years.
By August 2018, EirGrid was starting to see the writing on the wall, according to a report it sent to the CRU. The level of load increase as a result of data centre inquiries, it said, was “effectively a level of industry ‘disruption’ that could not be easily accommodated”.
This, it said, left it facing a challenge of offering contracts for connection in Dublin “above the power capability” of the region, a dilemma that raised “legitimate concerns for customers about reliably servicing their future power needs without further action”.
The paper set out a range of short-term measures in response to the identified issues and proposed longer-term solutions that could be considered.
Some of these proposed measures made their way into a new connection offer process by EirGrid in June 2019, that was updated a year later. It set out flexible demand options in constrained areas like Dublin whereby electrical load must be reduced on instruction when power capacity may not be readily available.
Despite these changes, EirGrid told the CRU in May 2021 that the measures were ultimately insufficient to address the challenges data centres pose to security of supply, leading the regulator to issue the new direction last November, eight years after exponential demand growth was identified.
A spokesperson for EirGrid told Noteworthy that, every year dating back to 2016, it has highlighted the growth in demand for power from data centres and “their impact on the supply and demand balance”.
“However, it is not EirGrid’s role, and it does not have the necessary powers to intervene. That rests with the regulatory authorities and policy makers,” they added.
The CRU told us that successive EirGrid Generation Capacity Statements since 2014 indicated that, while overall electricity demand growth and data centre connections were likely to increase, “it remained within acceptable parameters and reported a generation surplus”.
It added that, at broadly the same time that EirGrid wrote to it in May 2021, there was the drop out of a number of generators meant to come online by this winter.
“The failure of these units, exacerbated by continued growth in data centre demand,” it said, contributed to the CRU, Eirgrid and DECC taking a series of security of supply actions, including the decision to “adjust the assessment criteria for data centre connections”.
State support encouraged expansion
According to Dr Patrick Bresnihan, a political ecology lecturer at Maynooth University examining data centre expansion, delays to reign in the sector points to the State’s wider support for tech sector growth, as well as “wishful thinking” that we would find a solution to the growing energy needs of the industry.
“The overriding message you see from the government is that ‘this is a blip but give it 10 years, and we’ll have all of this offshore wind, and we can be the data centre capital of the world’.”
UCC energy expert Paul Deane would agree. He said that it’s important to remember the growth of data centres “wasn’t something that happened organically or accidentally”.
“This is a policy that we had as a government to encourage data centres to come here, to develop here and to grow here. And we were incredibly successful at it and still are. It has led to huge growth in data centre demand with a big increase in electricity demand.”
This is seen in the previous government’s position on data centres as part of Ireland’s enterprise strategy in June 2018.
Despite all the public and private warnings exchanged between EirGrid and the CRU at this stage, the paper was overwhelmingly supportive of data centre development as a “key aspect in promoting Ireland as a digital economy hot-spot in Europe”.
Problem not going away
Despite the recent changes in the State’s position, the energy needs of the sector are not going away anytime soon, with many planned data centre facilities already in the pipeline prior to the policy shift.
A recent independent analysis on behalf of the SEAI suggested electricity demand from data centres may grow in line with EirGrid’s estimates for highest demands on the grid if current trends continue.
Minutes from an October meeting of a steering group on security of supply, released to our team, show that participants, including EirGrid, ESB Networks, the CRU and DECC, noted a “risk” that existing data centre contract holders could grow their demand beyond current estimates.
This, they noted, could see demand rise to “a greater level than we are currently seeking to mitigate through the existing [security of supply] programme of work”.
This may compound the need to keep power stations fuelled by the dirtiest of fuels operating, increasing emissions further. It may also necessitate the widespread use of back-up generators at data centres.
For Eoin O’Leidhin, this shows that the State, in its support of data centres, put the cart before the horse, with a clarion call for a halt to further expansion until we have an energy system to match the sector’s needs.
“If we have loads of renewables in 10-15 years time, then make an argument for connecting your data centres powered by renewables but that is certainly not there at the moment,” O’Leidhin said.
“It’s so clear that short-term economic gain is being placed over our emissions, so no matter what is said about how we are going to reach [climate] targets in 2030 and 2050, we’re still adding new energy demand that requires increased fossil fuel demand – and you can’t get around that.”
INVESTIGATING IRELAND’S ENERGY CRISIS - FULL SERIES OUT NOW
Part one reveals how staff shortages have left the energy regulator scrambling to keep the lights on. Part three looks at how the State failed to get enough power on the grid to avoid the energy crisis.
Have a listen to The Explainer x Noteworthy podcast on our findings.
By Niall Sargent of Noteworthy