Why build data centres in Ireland at all?

My latest piece in The Currency

I’m optimistic about Ireland. Owing to high trust institutions, high skill levels, low corporate tax and an American-European culture, Ireland is arguably the strongest bridge across the Atlantic. Unlike many developed countries, Ireland’s population is growing, and aging is that bit less of an issue.

However, that Ireland is unable to support the connection of new data centres, nor protect undersea cables is undercutting both reality and brand.

Ireland has been unable to jointly weigh and confront decisions around security, economic strength and the environment. In one part, this is because decision making is siloed across independent bodies, with limited Dáil (parliament) authority to resolve decisions that interact. In other part, we do not often provide the arguments for how to weigh these decisions, because it is easier - in the short term - to pretend there are no conflicts at all.

In this piece in The Currency, I start with why Ireland should continue, not just have data centers, but many more data centers per capita than other nations. This is both specialisation and strategy at work:

“From Ireland’s – and the EU’s – standpoint, there are strong strategic reasons why Ireland should want more data centres. This starts with the strategic benefits of data and compute sovereignty. In a geopolitically reorganising world, countries slowing or blocking the build-out of data centres are blocking today’s primary avenue of economic growth and relative economic strength.”

I note how this challenge is the same as faced by households with high energy prices:

“The challenge faced by households and by data centres is the same, namely that the power supply is held down.”

I move on to the reasons why data centers largely cannot connect to the grid, namely, barriers to building new power generation:

“New data centres are unable to obtain a grid connection because the Government decided to transition to a renewables-powered grid, while throttling the ability to build new natural-gas plants and liquid natural gas terminals. The key motivation for the shift to renewables was to reduce carbon dioxide emissions. The under-appreciated challenge (although not by grid operators!) with renewables is that Ireland is not located near the equator.

…Ireland [has] more wind than sun, and we also have seasons. We see hourly variability, multi-day wind lulls, and strong seasonal variation because North Atlantic wind is stronger in winter and weaker in summer.

…For these reasons, and this was true prior to the latest surge of data-centre growth, a grid with increasing renewables penetration is reliant on natural gas.”

And finally, I move to my recommendations around liquid natural gas terminals, weighing grid incentives for renewables towards availability, and removing the ban on nuclear development in Ireland so we deeply evaluate all possible options for our energy future.

I’m not fixed on my recommendations or views on the above. In writing the piece, some of my views changed, including what is possible or not with a carbon tax, and whether renewables contribute or hurt energy prices and independence.

I conclude:

“Data centres are not a play for jobs, they are a play for data security and reinforcement of a reputation where other nations can entrust their data and their compute. Balancing security, economic and climate issues is not an easy task, but it is important.”