Should large technology businesses be the focus of energy plans in Ireland?

Leading academics have suggested that Ireland’s green energy plans have to focus on the challenge of technology data centres. The existing Climate Action Plan intends for Ireland to reach 70% renewable energy by 2030, predominantly through onshore and offshore wind farms. At the same time, the attention placed on data centres and their associated energy demand has led to some concerns about the ability of Ireland to reach these goals without making some significant changes to the tech industry.

At present, data centres are responsible for 1.6% of carbon emissions in Ireland and are forecast to use 29% of Ireland’s total energy by 2028. Eirgrid has warned that by 2026 the combined demand for data centres and electric vehicles could potentially exceed the energy supply available in Ireland.

Further pressure on leading technology businesses to reduce emissions has resulted in some big corporations committing to reaching 100% renewables over the next decade.
In the last month, the SEAI introduced a public consultation on the government policy on Corporate Power Purchase Agreements (CPPAs). These are the mechanism which enables large energy users, such as data centres to purchase power directly from energy developers, such as wind farms. The governments hope CPPAs will account for nearly 35% of all renewable energy generation by 2030.

The concept is that this will encourage costs to be diverted from consumers and increase the overall renewable energy supply. Critics suggest that it is difficult to be sure that CPPAs are not just taking renewable power from projects that would be going ahead anyway, something that is referred to as ‘additionality’ and has been an ongoing issue within climate change policy for some time now.

In regards to Ireland, there isn’t a lack of demand for wind energy on a national level. The lower costs associated with wind energy mean the market demand isn’t a concern, and there is continued interest from investors in Irish wind energy. Ireland is supportive of a rapid movement towards onshore and offshore wind energy between now and 2030 and is developing the necessary conditions for the expansion of the wind sector. 

There are concerns that if the power generated via CPPA is predominantly used by businesses to power new data centres, rather than mitigating existing emissions, then the national decarbonisation challenge will become even more complex as the best wind resources will be used up.

The main parties to benefit would likely be the corporates purchasing renewable energy. Critics highlight that there needs to be more focus on public interest and our commitments to decarbonise by 2030. Rather than focusing attention on CPPAs, there also needs to be a concerted effort to explore different energy systems that directly involve local communities and enable more balanced development. Community energy has not been a priority for the government, with the focus being more on social acceptance for wind projects, rather than communities having a direct impact on the development of future energy projects. Based on the existing and proposed CPPA policy, the role of communities will remain relatively low. There are, however, several community-related models which the government could implement and use to shift towards decarbonisation. 

The key point from the CPPA proposal is that agencies and governments continue to view public participation as an optional area within the movement towards a low carbon future. Industry academics are urging this to be reviewed and ensure that communities are directly involved in the low-carbon transition.