Mark Daly (Fianna Fail)
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I welcome the Minister of State to the House.

Lynn Boylan (Sinn Fein)
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Cuirim fáilte roimhe an Aire Stáit.  I wish to raise the issue of islanded data centres, which rely primarily on on-site fossil fuel generation and direct gas connections. This is a growing concern in our efforts to combat carbon emissions and keep within our carbon budget.

From the time that the Commission for Regulation of Utilities, CRU, precluded many new data centre projects from signing up to the electricity network, Gas Networks Ireland, GNI, started seeing increased requests for data centre connections to the gas network on the basis that data centres would operate their own gas-fired generation on site.

In July 2022, the Government adopted its statement on data centres. In many regards, the statement supports the status quoand does not go far enough to properly fix the mess that Fine Gael policy has got us into. However, one thing it did get right was to clarify that new islanded data centres would not be in line with national policy. Also, these would run counter to emissions reduction objectives and would not serve the wider efficiency and decarbonisation of our energy system. The next day the Minister for the Environment, Climate and Communications, Deputy Ryan, wrote to Gas Networks Ireland to indicate that it would not be appropriate for the organisation to sign any more contracts to connect data centres to the gas grid. I am led to believe that GNI responded and said that it was mandated under the Gas Act to supply connections to third parties.

In September 2022, I raised this matter with the regulator. I put it to CRU that the move to islanded data centres would blow our carbon budget out of the water. The regulator said they "need to look at the implications for the carbon sectoral emissions limits" and "there is a bit more work to be done but we are engaging with GNI on that."

In October 2022, I issued a statement calling on the Government to bring forward emergency legislation, that we need, to prevent data centres from connecting to the gas grid. I also said that whatever roadblocks there were preventing Gas Networks Ireland from following his instruction to stop connecting islanded data centres to the grid had to be cleared.

Unfortunately, a year has elapsed and my call has gone unheeded. In a brazen show of disregard to its line Minister, GNI issued a gas forecast statement which states: "Gas Networks Ireland believe that Data Centres connecting to the gas network could meet... [the principles set out in the Government’s data centre policy statement] ...through the increased use of biomethane and hydrogen” and that it would continue as normal.

The Oireachtas joint environment committee has written to the Climate Change Advisory Council, CCAC, seeking clarification on how a decision like the one to grant Microsoft a data centre in Tallaght could be avoided in the future. In the light of the Government’s Statement on the Role of Data Centres in Ireland’s Enterprise Strategy, the CCAC has now also recommended that the regulator should direct GNI 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's statement. If there is a legislative barrier, it is imperative that the Government take action to revise the Gas Act in line with national policy and the principles set out in the Government's statement.

The Minister of State present does not have responsibility for this area and I do not mean any disrespect when I say that I am disappointed that neither the Minister for the Environment, Climate and Communications, Deputy Ryan, nor his Minister of State, Deputy Ossian Smyth, could come here to answer my question because the issue I have raised is a real threat to our carbon budget. Does the Minister of State present, considering the response that her ministerial colleagues gave her, see any legislative barrier to preventing GNI from connecting more data centres in this manner? Is there any proposal to take the legislative action that is required to end this procedure where GNI basically ignores directions from the Minister and the climate Act, and continues to connect data centres to its gas grid.

Mark Daly (Fianna Fail)
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Before I call on the Minister of State, I welcome to the Gallery a group from St. Andrew's National School, Lucan. I welcome Senator Emer Currie, all the students along with Ms Owens, Ms Sweetman and Ms Harper and, most important, Senator Currie's daughter, Cordelia.They are most welcome and I thank them for coming to Seanad Éireann today. We hope they enjoy their visit. They are in capable hands. I thank Senator Currie.

Josepha Madigan (Dublin Rathdown, Fine Gael)
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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.

Lynn Boylan (Sinn Fein)
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I thank the Minister of State for the response. I note it states that GNI has since paused new connection agreements with gas-fired data centres. The Oireachtas Joint Committee on Environment and Climate Action has a letter from Gas Networks Ireland confirming that there are 13 data centres that either have been connected in the last year or are awaiting connection to the gas grid, and that GNI believes it is legally obliged to connect those data centres to the grid. Does this mean the pausing of any new contracts or will those 13 still get connected to the gas grid, which would have serious implications for our emissions targets?

I would be interested in hearing the Minister's response to GNI literally making public statements that are in direct contradiction to the programme for Government and the Minister’s own statements, which expressed the belief that data centres connecting to the gas network could meet the principles of the Government’s data centre policy through the increased use of biomethane and hydrogen, which we know is absolutely not a runner logistically. I am interested in hearing the Minister of State's response.

Josepha Madigan (Dublin Rathdown, Fine Gael)
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I will bring the Senator's comments about biomethane and hydrogen and Gas Networks Ireland back to the Minister. With regard to the legislative barriers to implementing the July 2022 statement, I understand the Department of the Environment, Climate and Communications is working closely with the Department of Enterprise, Trade and Employment, the Department of Housing, Local Government and Heritage and the Commission for Regulation of Utilities to implement that policy statement. That work would include the consideration of any legislative changes which may or may not be needed. I have outlined the work that the Commission for Regulation of Utilities is conducting in its review of future demand of large energy users. I also mentioned the Government policy seeking to enable the twin transitions of digitalisation and decarbonisation of our economy and society. The statement on the role of data centres in Ireland's enterprise strategy is to ensure alignment with Ireland's renewable energy targets, security of supply, sectoral emissions and climate priorities. I will bring the Senator's comments back to the Minister and the Department.