Josepha Madigan (Dublin Rathdown, Fine Gael) | Oireachtas source

I thank Senator Boylan for raising this matter. She is correct that I am responding on behalf of the Minister, Deputy Ryan, and the Department.

I refer the Senator to the July 2022 statement on the role of data centres in Ireland's enterprise strategy. Government policy seeks to enable the twin transitions of digitalisation and decarbonisation of our economy and society. These transitions can and must be complementary. For this to happen, digital and climate change policies need to move in tandem. In July 2022, the Government published a statement on the role of data centres in Ireland's enterprise strategy to ensure alignment with Ireland's renewable energy targets, security of supply, sectoral emissions and climate priorities. This statement sets out principles for sustainable data centre development, which are as follows: economic impact; grid capacity and efficiency; renewables additionality; co-location or proximity with future-proof energy supply; decarbonised data centres by design; and SME access and community benefits. Officials from the Department of the Environment, Climate and Communications and the Department of Enterprise, Trade and Employment are working to implement the policy statement.

The Senator mentioned “islanded” data centres. The July 2022 Government statement sets out that “islanded” data centre developments that are not connected to the electricity grid and are powered mainly by on-site fossil fuel generation would not be in line with national policy. These would run counter to emissions reduction objectives and would not serve the wider efficiency and decarbonisation of our energy system. Growth in “islanded” data centres could result in security of supply risk being transferred from electricity to gas supply, which would be a significant challenge, given Ireland’s reliance on gas importation.

Following the publication of the statement on data centres, the Minister wrote to Gas Networks Ireland, GNI, stating that it would not be appropriate for Gas Networks Ireland to sign any more contracts to connect data centres to the gas network where the data centre would be powered mainly by on-site fossil fuel generation. Gas Networks Ireland has since paused new connection agreements with gas-fired data centres.

In its letter of 16 October 2023 to the joint committee, the Climate Change Advisory Council made a number of recommendations, including that the Commission for Regulation of Utilities, CRU, should direct Gas Networks Ireland not to sign any more contracts to connect data centres to the gas network where the data centre would be powered mainly by on-site fossil fuel generation under section 10A of the Gas Act to reflect the Government statement. It stated that if there is a legislative barrier, the Government should take immediate action to revise the Gas Act in line with national policy and the principles set out in the Government statement.

The Department of the Environment, Climate and Communications is working closely with the Department of Enterprise, Trade and Employment and the Department of Housing, Local Government and Heritage, together with the CRU, the energy regulator, to implement the July 2022 policy statement. This work would include consideration of any legislative changes which might be needed. In addition, the CRU is conducting a review of future demand of large energy users. Following the review, the CRU will publish new decisions on the rules for gas connections of large energy users. Prior to this, I understand the CRU intends to carry out a public consultation in quarter 4 of 2023 to inform its decision. I remind Senators that the CRU is independent in the exercise of its functions and, in terms of accountability, the CRU reports directly to a committee of the Oireachtas.