2026-06-11

4. Deputy Ciarán Ahern asked the Minister for Climate, Energy and the Environment his response to findings in a recent report by Friends of the Earth that data centre energy demand added a cumulative €715 million to household electricity bills between 2015 and 2023 and could add a further €1.6 billion over the next decade; his response to a recent report (details supplied) on data centres commissioned by the Department of Enterprise, Tourism and Employment, and whether he accepts its claims regarding employment numbers and economic value; and if he will make a statement on the matter. [44852/26]

I ask the Minister for his response to findings in a recent report by Friends of the Earth that data centre energy demand added a cumulative €715 million to household electricity bills between 2015 and 2023 and could add a further €1.6 billion over the next decade; his response to a recent report from KPMG on data centres commissioned by the Department of Enterprise, Tourism and Employment; and whether he accepts the claims in that report regarding employment numbers and economic value.

Data centres represent critical digital infrastructure that is central to Ireland's modern economy. They strengthen Ireland's position as a strategic, knowledge-intensive regional hub for the ICT sector and also support broader retention and expansion of existing investment that supports billions of euro in economic value for Ireland via high-wage employment, tax receipts and the supplier ecosystem. The Government's policy is supportive of continued sustainable data centre developments that are consistent with our twin digital and green transitions. The Value of Data Centres to Ireland is an independent report commissioned by the Department of Enterprise, Tourism and Employment that clearly demonstrates the significant role data centres play in our economy and draws on extensive consultation with relevant experts. It reports that there are over 19,500 directly employed in the industry. As detailed in the large energy user action plan, Ireland's technology sector, underpinned by digital infrastructure and data centres, accounted for employment of over 180,000 people in quarter 4 of 2024, equivalent to 7% of Ireland's total workforce. This highlights that beyond their direct contribution to construction and operations, data centres play a critical role in enabling access to a wide range of digital-intensive sectors, enhancing the competitiveness of the Irish economy. While data centres are large energy users, Ireland's industrial electricity demand – unlike that in other European countries, which are heavily industrially based – is primarily concentrated on the digital economy. This is a core energy-intensive sector and, as such, it reinforces the effectiveness of a plan-led approach for future development of the most energy-intensive industries, including data centres, as set out in the Government's large energy user action plan. The environmental NGO report referred to by the Deputy is consistent with the Government position by underlining the importance of accelerating the deployment of renewable energy to remove gas-related cost effects driving energy prices. The Government has introduced a number of initiatives, including unprecedented investment in PR6 and ongoing co-operation in the acceleration of the infrastructure task force to support increased roll-out of renewables.

I thank the Minister of State. Of course, data centres have a role in modern society. No one would dispute that, but there is an important conversation starting about the costs and benefits. The benefits must be in proportion to the costs. Many of us in this House fear that the balance is being lost here. The Friends of the Earth report spoke to the costs that data centres are adding to our energy bills. We know of the strain that they are putting on our electricity grid, and that they are undermining our decarbonisation goals. What we are trying to do here is scrutinise the Government's industrial policy as much as its climate and decarbonisation strategy. The Minister of State mentioned that data centres are important in retaining jobs and industry here, but the job figures quoted in that report were frankly embarrassing. There were 876,000 jobs linked to data centres. Was the Minister of State not at all embarrassed about that kind of figure coming out? The real figure – the Minister of State mentioned 180,000 jobs – is more like 19,500, half of which are in construction. I would like the Minister of State's response to that.

Again, we have done extensive evidence-based analysis. If the Deputy examines the Department's KPMG report, he will note it reflects the reality of Ireland being recognised as a global digital hub. I accept that the future pathway needs to be different, and that is exactly what we are implementing. We will no longer be in a position where the sector will be unmanaged. We will introduce a plan-led framework based on the large energy user action plan. That will align energy demand with renewable supply and ensure we have grid stability that is protected. We are also very much focused on accelerating renewable delivery. We will see onshore wind, offshore wind and solar generation capacity rapidly increase, with a target of over 80% by 2030. Along with that, we are introducing affordability measures, and the Deputy will see that in the energy affordability action plan that will be published in quarter 3 of this year.

We welcome regulation and planning in this area. Currently, 22% of our energy is going to data centres. That is going to be 30% by 2030. Even under the Government's current plans, it looks like 55% of our energy will be going towards data centres, if all the data centres that are in planning are built. What does the Minister of State believe is an acceptable proportion of our energy going to data centres? Is it 22%? Is it 30%? Is it 55%? Even 22% means we have five times more energy going to data centres than in the USA. It is 20 times more than in China. The Minister answered a question earlier on energy security, but data centre strategy is undermining our energy security by increasing the gas demand in this country. Even if only 20% of the energy going into data centres is associated with gas and not renewables, it will double the peak demand for gas in this country. Again, it is undermining the Government's other strategies.

I take the points the Deputy has raised. As I said, that is precisely why we have moved to a more plan-led approach under the large energy user action plan. That is in place. We predict that by the end of the decade, 30% of our energy will be focused towards digital hubs and data centres. What does that mean in practice? It means new connections will be subject to strict conditions. It will also mean that on-site or contracted renewable generation will be required. That is very much focused on a demand-led approach with flexibility. Also, system supports must be provided by operators. Most importantly, data centres are now part of the solution in regard to renewable energy projects, grid connections and energy storage. We have a huge pipeline of onshore and offshore projects coming through. If we manage renewables, we will have less reliance on gas and a stronger grid. That is exactly where Government policy now is focused.