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Speech on Data Centre Moratorium: Motion

29 September 2021

That Dáil Éireann:

notes that:

— the data centre sector in Ireland is undergoing a surge in development, with approximately 70 data centres constructed, representing a 25 per cent increase on last year, a further eight under construction and between 25-30 more in the planning stages;

— a substantial amount of public funding has been spent on construction-related investment for data centre and large energy user growth and the sector expects €6.7 billion in investment between 2020 and 2025, adding to the €6.2 billion that has been invested in the sector to date;

— data centres are energy and resource-hungry projects, requiring the same amount of energy as a large town or a small city like Kilkenny, using between 500,000 and 5 million litres of water a day;

— according to EirGrid, data centres and large energy users are expected to use 27 per cent of all electricity demand by 2028, up from its current 11 per cent share of the national grid, and energy use by data centres is expected to double over the next five years;

— electricity prices rose by almost 19 per cent in the year to the end of August as indicated by the latest Central Statistics Office Consumer Price Index;

— Ireland’s commitment to 70 per cent renewable energy by 2030 is in line with our decarbonisation goals;

— the contribution of data centres to job creation is unclear, as the Department of Enterprise, Trade and Employment currently does not collect this information and estimates that between 30-50 permanent jobs are created per centre;

— the Government is committed to developing energy efficiency standards for equipment and processes, particularly those set to grow rapidly such as data centres;

— the Government’s Statement on the Role of Data Centres in Ireland’s Enterprise Strategy (2018) is the only Government policy on the development of the sector and pre-dates global and national energy security concerns, and also notes the updated climate legislation and targets, and the recent surge in data centre development in the country;

— there are forecasts of an impending energy crisis this winter, with two separate amber alerts already issued by the Single Electricity Market Operator this month due to temporary electricity supply shortfalls, and seven such alerts have been issued in the past 15 months, compared with just 11 alerts over the previous ten years;

— the Commission for Regulation of Utilities (CRU) has warned of 'rolling blackouts' if action is not taken to deal with the power demand from data centres, recommending either a moratorium on the construction of data centres, or new conditions on construction; and

— the Industrial Development Agency has warned that the energy crisis has the potential to inflict 'considerable reputational damage' and negatively affect the country’s ability to attract foreign direct investment;

acknowledges that:

— in the context of a climate crisis, post-Covid economic recovery and ongoing energy security concerns, data centres must be managed sustainably through appropriate planning conditions, sustainable energy sources and all necessary economic risk impact analysis carried out on the development of data centres in Ireland;

— the Government has not carried out an environmental, economic and energy demand impact analysis on the development of data centres to date;

— there is little to no transparency as to how the Government is managing data centre growth in Ireland, and no single Government Department has taken ownership of the sector’s development or the collection of data in relation to data centres;

— Ireland is at risk of not meeting its renewable energy targets as a result of increased energy demand from data centres;

— there are concerns of higher energy prices as a result of data centres’ increasing share of energy demand, not only curbing post-Covid economic growth but leading to higher rates of fuel poverty, an outcome in direct conflict with just transition principles;

— there could be a potential negative impact on attracting foreign direct investment, which creates much larger numbers of jobs than data centres, if energy demand is not properly managed; and

— concerns have been raised that construction of data centres could take away necessary labour for the construction of much-needed homes during the current housing crisis; and

calls on the Government to:

— enforce higher standards as set out in the European Union Code of Conduct for Energy Efficiency in Data Centres, removing the voluntary nature of the code and putting in place obligations to prevent the industry from self-regulating during this rapid state of development of data centres;

— request that the CRU publish its findings on data centres from the recent public consultation and to outline a proposed direction on data centre connection to the electricity grid system, and publish its decision as soon as possible;

— consider the CRU proposals that EirGrid and ESB Networks would be required to prioritise connection applications from data centres in accordance with a series of factors, including whether data centres:

— generate enough energy on site themselves to support their demand for electricity;

— can be flexible in reducing their consumption at times of system constraint;

— have chosen a location relative to grid constraints;

— have the ability to provide onsite dispatchable generation and/or storage; and

— have the ability to reduce consumption when requested by the system operator; and

— enact a moratorium on the development of data centres and the issuing of planning decisions as an interim measure until an economic, environmental and energy impact risk analysis has been carried out.

I am glad to speak for the Labour Party in support of this motion and commend Deputy Whitmore and her colleagues on bringing it forward. I am glad to have the opportunity to debate the important and pressing issue of data centres in a measured, thoughtful and rational way. The wording of the motion is careful. It simply calls for a pause on the development of data centres and sets out very clearly and persuasively the reasons for doing so.

When I took up the brief for the Labour Party on climate very recently and started looking into the question of data centres, what surprised me most was the absence of an updated national plan or Government strategy. To me this is particularly surprising given the projections of massively increased demand arising from data centres which others have spoken about. We have seen from EirGrid's analysis that demand from data centres could account for 27% of all demand in Ireland by 2029. Others have spoken about that. It is a staggering figure. Given that data centres' demand is predictable, and that we can project demand and demand is steady, it seems even more surprising that the most up-to-date Government statement on the role of data centres is from June 2018. We need a clarity of approach from government at a national level as to how the demand for energy from data centres will be managed. Having listened carefully to what the proposers of the motion have said, I note they have not said they are not opposed to data centres. That is a sensible point. That ship has sailed. We are all utterly reliant on data centres and global connectivity. We all accept how crucial the tech sector is for Ireland. In Dublin Bay South, my constituency and that of the Minister, we are all very conscious of the enormous contribution the tech sector has made. Taking a measured and rational approach, I would agree with the Minister that we need a plan-led regionally balanced approach. Policy and regulation are required to enable the transition to a zero carbon electricity system.

What is currently lacking from the Government, both in the speech from the Minister and the Government's amendment to the motion, is clarity and a sense of how the growth of data centres is to be managed over the short and medium term. In his speech the Minister mentioned the publication of plans in the next month, but in the meantime we do not know what the position is. The wording of the Government's amendment states that it will set out "a suite of actions" and that the Government's statement on the role of data centres will ensure an "alignment with electricity emission reductions". We need to know how this is to be managed now.

The motion calls for a pause in further development as an interim measure until the sort of crucial assessments that we need into the environmental, economic and energy impacts have been carried out. That sort of risk analysis seems a sensible and measured approach.

There are two reasons that we need to support the motion and that the Labour Party will be voting for it. First, the motion recognises the demand on energy and, as we have said, the projected increased demand in energy demand as a result of the development of data centres. Second, the motion recognises the climate emergency within which we are all struggling with these issues.

In terms of the demand on energy, others have pointed out that there are 70 operational data centres in Ireland. Most are concentrated around Dublin. It is the largest data centre hub in Europe. That is not something to be dismayed about because if they are not here they will be elsewhere. The climate emergency is a global one. We have to bear that in mind when we are speaking about data centres. As the Minister said, many multinationals have stated their commitment to transition to zero carbon power and carbon emission neutrality.

That is all welcome, but we know, given what EirGrid has said today, that even where the energy that fuels data centres comes from predominantly renewable sources, as we hope it will, the demand still adds pressure to the grid. We are still reliant on non-renewable sources of energy, and demand becomes unsustainable without clear policy interventions and clear and urgent action being taken by the Government. The absence of an indication from the Government as to what that intervention will be is what the motion speaks to.

It is also important to note that, as I said, demand from data centres will be steady. We can project what it will be, but that is all the more reason to have a coherent national strategy in place. It is not just about energy and energy demand; it is also about the demand on our water supply. We know that most data centres use a huge amount of water to cool their servers.

In terms of the climate emergency, all present are very conscious of the fact that we are at a crucial juncture in the international movement to fight climate change. We are conscious of the IPCC report published last month. Tomorrow the Dáil will debate the upcoming climate action plan in anticipation of the COP26 conference in Glasgow at the end of October. There is a huge mobilisation of young people, in particular, many of whom were outside Leinster House last Friday.

Many are anxious to see us take urgent action to address climate change. It is because of this and the Government's commitments that commit us to reducing our emissions and reach a 51% target by 2030 with a net zero-carbon emissions target for 2050 and to reaching 70% renewable electricity by 2030, that we know this is simply not compatible with the projected increased demand in data centres unless there is a radical and urgent intervention by the Government and a clear and coherent plan as to how this demand is going to be met while aligning us with those ambitious but vital targets on climate emissions reduction.

To conclude, this motion simply calls for a pause. It is an essential interim measure to ensure that we meet climate targets and develop a sustainable policy on the location of data centres. It is crucial that we do this. We owe it to future generations, and to our young people who are out protesting every week, to do this. We are lacking currently from Government a clear strategy as to how this will be managed into the future. That is why the Labour Party is proud to support the motion.