Oireachtas Joint and Select Committees

Wednesday, 15 November 2023

Joint Oireachtas Committee on Climate Action

Future Licences and Contracts to Connect Data Centres to the Gas Network: Discussion

Ms Marie Donnelly:

Deputy Whitmore makes very valuable points on a number of aspects that I would like to come back on if I can. As a general approach, if our natural resource availability was limited I would agree with the Deputy 100% but, as it happens, our natural resource of both wind and solar is not limited, so it is not a limiting factor in terms of the roll-out of onshore renewables, be they either wind or solar.

In response to the question of whether it is data centres that are taking over from other wind farms, I think there is an element of natural justice in this. If data centres are going to use that much of our electricity, it seems logical that they should pay for the production of it and making it available. My understanding is that it is a possibility to go down that road. It is not being resisted by the data centres and in natural justice, as I say, it would seem to be quite equitable when the natural resources are sufficient to cover the demand.

Deputy Whitmore also raises an important point, which is that the costs of actually rolling out infrastructure in the current environment are increasing and that is a challenge. It is not just a challenge for data centres; it is a challenge for ourselves given that we want to see these rolling out. We do our annual auctions and if the auction is not filled, we suffer because we do not have enough of the issue. That is a general concern. It is happening. We have seen it not just in Ireland but, for example, in the United Kingdom where there were zero applications for their most recent offshore auction because of the pricing. We have seen where Ørsted has pulled out of two very large offshore construction facilities in the United States. Its share price dropped 40% on the basis of that but the pricing just got out of line, and it could not proceed with it because it would not have been able to fund it. There is an issue that we do need to look at, more as a consequence, shall we say, of what has happened globally in the supply chain, and the knock-on consequences of that on capacity and the cost of construction. Given that our source raw material is not in short supply, it would seem to be entirely coherent that data centres that will use electricity should pay for its production.

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