Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

I thank Deputies for raising these important matters. Clearly, the current security of electricity supply situation, together with high international price increases in natural gas, are a matter of serious concern to all. The Government will continue to help vulnerable customers by providing extensive supports for household energy costs via energy efficiency and welfare schemes. I expect to see further progress in that regard in the budget next week.

Energy and climate policy is rapidly changing, driven by the urgent need to tackle climate change. In Ireland, this means rapidly decarbonising our electricity grid to act as the linchpin for emissions reductions in other sectors. Under our new climate legislative framework, all sectors of the economy will have sectoral emissions ceilings and data centres must be within these sectoral ceilings. It is clear to me that these digital industries also wish to transfer to zero-carbon power and I am confident that working collaboratively with them, we can enable this transition.

The expansion of data centres in Ireland, particularly in the Dublin region, is projected to lead to a large increase in electricity demand, which gives rise to challenges for the energy system. Data centres accounted for 11% of electricity in 2020, and this morning EirGrid published its latest generation capacity statement, which projects that demand from data centres could account for 25% of all electricity demand in Ireland by 2030.

We are facing real short-term challenges to electricity security of supply, primarily driven by unplanned technical failures on two of our largest gas plants, both of which are expected to be back online shortly. To suggest it is solely down to increased demand from data centres is not borne out by the facts. The increase in data centre demand was forecasted and is increasing in line with forecasts.

In the medium term, to back up the additional 11 GW of new renewable power supplies we will bring online, we must replace our ageing high-carbon power sources with a mixture of batteries and a flexible gas power plant that can help us transition to zero carbon while also using gases like hydrogen. This has been challenged by a failure to bring capacity through recent market auctions. The Commission for Regulation of Utilities, which has statutory responsibility in this area, has outlined its plan this morning on how to address this system adequacy issue.

I have moved an amendment to the motion, which acknowledges there is increasing electricity demand from large energy users, including data centres, and that a range of actions are being taken by the CRU and EirGrid in relation to security of electricity supply over the coming winter and years ahead. It is acknowledged that the growth in the needs of large energy users must be managed within the electricity system regulation and sectoral emissions ceilings. Increasing electricity demand from industry, from electrification of both heat and transport, will be defining features of our future energy system. Increased electricity demand will drive the need for more onshore wind, more offshore wind, and more solar power as well as storage and grid infrastructure. We also need large users to provide demand-side response and flexibility services.

EirGrid has undertaken a comprehensive assessment of the future needs of the power system as part of its comprehensive consultation, Shaping our Electricity Future. That analysis would suggest that where there is existing grid capacity in areas with high levels of renewables, the location of large energy users there, including data centres, can provide stability and help balance the grid. The simple equation here is bringing the demand closer to where renewables are located, thus reducing the need for additional electricity grid development.

The ICT sector and data centres are part of the digital and communications infrastructure for many sectors of the economy and act as a hook for further investment and job creation. The technology sector in Ireland is a major employer and is also playing a key role in driving digitalisation of the Irish economy, which is core to increasing productivity, competitiveness, and innovation. Data centres enable remote working, which cuts transport carbon emissions, as has been evident in recent months. It is also worth iterating there is no direct State subvention of data centres, as the Private Members' motion alleges. All large energy users pay for their infrastructure through network charges. There is no subvention of data centres from either the State or household electricity bills.

Calls for a moratorium on data centre connections would be a blunt policy response. We are better served to enable the transition to a zero-carbon electricity system through policy and regulation. A secure, low-carbon and flexible energy supply enables Ireland to use our comparative competitive advantage in offshore clean energy to locate clean digital industries close to the power and to provide employment and livelihoods for citizens.

Working with the relevant State agencies, the Government wants to ensure there is a plan-led, regionally balanced approach to such developments. An example is the recent announcement by Bord na Móna of the 200 MW energy park near Rhode, County Offaly. It combines 200 MW of clean power, hydrogen generation and utilisation, battery storage and flexibility from large demand users. This maximises the value to society and minimises the costs. This is the fundamental underpinning of the just transition whereby we create clean jobs from clean power.

Finally, and importantly, the amendment affirms Dáil Éireann's support for a number of measures that will help manage data centre development and strengthen the policy and regulatory framework. I will shortly bring a revised climate action plan to the Government, which will set out a suite of actions that will address rising energy demand while facilitating sustainable growth in the digital and ICT sectors.

The amendment affirms the Government's intention that the policy statement on the role of data centres in enterprise policy will be reviewed shortly. The wider policy and regulatory context has shifted since 2018 and we now need to ensure better alignment with electricity emissions reduction and security of supply challenges. Most important to my mind, the amendment also affirms that the independent regulator, the CRU, also intends to publish its data centre connection policy later next month. That is the key response.

I heard Deputy Whitmore on the radio this morning. She is correct that we need to plan. We have been doing exactly that. We have tasked EirGrid to come up with the Shaping our Electricity Future plan, which it will publish next month. We have worked with the CRU to get the new policy regulations on how we connect data centres. That too will be published next month. Far from ignoring this issue, it has been centre stage in our plans to manage our energy system. The CRU and EirGrid have been developing the plans in the past year and they will be published next month. That is the best policy approach.

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