Data Centres

2. Deputy Rose Conway-Walsh asked the Minister for Enterprise, Tourism and Employment if, in the interest of transparency, he will instruct his Department to publish the original unedited report (details supplied) on the value of data centres to Ireland. [67206/26]

3. Deputy Roderic O'Gorman asked the Minister for Enterprise, Tourism and Employment the reason a recent report (details supplied) published by his Department on the economic impact of data centres in Ireland did not address the net impact on the economy of increased costs of energy caused by data centres, the opportunity cost of supporting data centres instead of other infrastructure or sustainability targets on water and energy use for data centres. [67205/26]

Over the summer the Department published a report prepared by KPMG that set out the economic case for data centres in Ireland. Freedom of information requests made by Lynn Boylan of Sinn Féin, and I acknowledge all her work in this area, revealed that officials from the Department sought to make amendments to the draft prepared by KPMG in order to cut concerns about the impact of data centre expansion on housing, utilities and farmland. In the interests of transparency will the Minister release the full draft report prepared by KPMG where these concerns have not been removed?

I propose to take Questions Nos. 2 and 3 together. I thank the Deputies for their questions. I propose to take these two priority questions together as they concern the recently published report, The Value of Data Centres to Ireland, which was prepared independently by KPMG for my Department. The first issue raised is regarding the publication of draft versions of the report. Officials from my Department and members of the steering group provided comments and feedback on draft versions in line with standard practice for commissioned research. Draft reports are subject to review and refinement to test assumptions, challenge analysis, seek clarification where required and ensure that findings are robustly supported by evidence and clearly presented. In line with standard practice, this is the approach that my Department takes in delivering independent research studies, including, for example, The Sectoral Analysis of Future Hydrogen Demand and End Use in Ireland, An Evaluation of Deadweight in the DETE Economic Appraisal Model (EAM) and An Economic Assessment of Green Energy Park Concepts. Assertions that the KPMG study on data centres was designed to reach a predetermined conclusion are incorrect. Responsibility for the methodology, analysis and findings contained in the final report rests with KPMG, following its evidence gathering, stakeholder engagement, expert challenge and quality assurance processes. I do not intend to instruct my Department to publish draft versions of the report. Drafts are working documents that form part of an iterative research process and do not represent the considered final views of the authors. Publication of drafts without the context of the review and quality assurance process could create confusion regarding the final conclusions of the study. I will now turn to the issue raised regarding the economic impact of data centres, the associated energy costs and the scope of the study. The report was commissioned to address a knowledge gap regarding the economic contribution of data centres to Ireland, including their impact on employment, gross value added, tax revenues and wider economic activity. It found that data centres supported an additional 7,636 operational jobs between 2010 and 2024 and are enabling infrastructure supporting significant economic activity in Ireland. The terms of reference for the study were to determine the economic impact and wider societal benefits arising from existing and planned data centres in Ireland up to 2030 and explore options for the evolution of the data centre landscape beyond 2030 with a view to optimising future economic and societal benefits. While the report was required to consider trade-offs and opportunity costs associated with future data-centre development, it was not commissioned as a comprehensive cost-benefit analysis comparing the economic benefits of data centres with electricity costs, nor was it designed to assess the net economic benefits of data centres against alternative uses of electricity, land, water or infrastructure capacity.

People need transparency because they are researching how many data centres are enough and how do we get a sustainable balance. In 2025 data centres consumed 23% of all metered electricity, which was up from a figure of just 5% ten years ago in 2015. This is more than the total metered electricity used by all urban dwellings in 2025, which accounted for just over 18%. All rural dwellings accounted for 9%. At this rate, the electricity usage of data centres will surpass the total used by all homes within a few years. I do not think this is sustainable. The pressures these data centres are placing on grid capacity cannot be understated. I am sure the Minister for Enterprise, Tourism and Employment can recognise that where grid capacity is unavailable it jeopardises potential investment and job creation in smaller businesses. Delays in securing electricity or water connections mean investment will go elsewhere to competing economies. Businesses need places for their workers to live. If we cannot match this housing demand due to grid constraints we will lose out. It is vital that decisions on new data centre connections take account of the electricity requirements of housing, businesses, public services and future industrial development in that area. This is why last week my colleague, Deputy Pa Daly, brought forward a Bill that does just this. It prioritises homes and businesses over these energy and water consuming data centres. More data centres mean higher energy bills for households. Earlier this afternoon Lynn Boylan, MEP, and Eve Ryan from Trinity College presented the findings of their research on how data centres impact on the cost of electricity.

When the KPMG report on data centres was initially published it raised serious questions around whether a meaningful cost-benefit analysis was being undertaken in relation to the economic impact of data centres, particularly when it coincided so closely with the publication of academic analysis that showed households have seen their energy bills increase by hundreds of euro due to data centre demand driving up wholesale prices. Now it appears, through freedom of information requests, that the conclusions of the report were determined from the beginning and that the rougher edges were shaved off to present a more palatable picture. The tender document that set out the specifications of the report asked KPMG to assess the challenges and potential disadvantages of further data centre development. The same terms of reference specifically provided the example of rising electricity prices as one such potential challenge, stating there is a potential for increase in electricity prices related to any grid infrastructure developments required to support further data centre development. Why, then, was this analysis absent from the final report? Were the consultants not asked to conduct a full net economic analysis, including the costs as well as the benefits of data centre expansion? Did the Department specifically instruct the consultants not to assess impacts on electricity prices for households and businesses? Was any assessment carried out by the Department of the opportunity costs of dedicating grid capacity and public infrastructure to data centres rather than housing, transport or industrial development? Why were sustainability targets, which include measurements relating to energy use, water consumption and emissions, not included as core metrics within this report?

I thank both Deputies for their responses. Critically, as I pointed out in my earlier contribution, our report was not a cost-benefit analysis. It was principally about the added economic value that data centres would bring to the economy, or not. We had a gap in evidence in relation to their economic value. We have a body of evidence from the Department of Climate, Energy and the Environment, the CRU, EirGrid and the Environmental Protection Authority, EPA, in relation to grid capacity, electricity demand, emissions and all those areas, and it is intended to offer a view on the economic analysis. There is a gap in this regard, and it is an area where the Government should have impartial evidence to make a determination. It was not, therefore, a cost-benefit analysis. As I outlined in my opening contribution, in the context of reports that come from the Department, there are steering committees, terms of reference and a responsibility to ensure that reports meet the terms of reference as required by the Department. All the methodology, assumptions and quality assurance have to be stood over by KPMG. That is key. In relation to demand and competing interests, I am very much aware that there are huge challenges with data centres, particularly in the context of grid capacity. That is why I changed the rules. In the context of our large energy user plan, I said very clearly that any new data centres will need to use 80% renewable energy. That is going to drive forward our renewable energy transition. If we are going to breathe life into the five projects on the east coast, which will produce a total of 5 GW, we are going to need large energy users. Critically, to finance the projects, we are going to need the money and the opportunities that present in this regard, both of which are key. We are also very clear that for the security of the grid, data centres must have 100% of their demand in dispatchable energy generation on site. Again, this builds up resilience in the system. As I have pointed out previously, we have an opportunity to book value for our citizens in energy that is utilised through data centres and to build resilience in the digital economy. I know that there are challenges. We are mitigating those challenges by having a strong policy response.

Has a cost-benefit analysis been done in respect of data centres? Perhaps the Minister can answer this question. We need a thorough cost-benefit analysis. It may be that the information is there and I have not seen it. I ask this question because households are footing the bill for network upgrades to increase capacity for the expansion in the number of data centres, effectively subsidising the power supply for some of the most profitable companies in the world. Network charges currently represent 30% of household bills and are set to rise by an average of €41.25 annually from October. That is not fair. The Government's laissez faire approach cannot continue. Housing, energy security and infrastructure serving the public must be prioritised over the endless number of data centres. How many data centres do we need? How many are we going to have and where are they going to be located? The current arrangement of socialised costs for privatised profits cannot continue. I really think that we need to look at this whole area of data centres, where they are, how many are needed and what the cost-benefit analysis is.

Good policy requires that we assess benefits and costs. If the Government is confident in its approach towards data centre expansion, then it should have no need to place its thumb on the scales, as was done in the case of this report. The Minister may disagree with some criticisms of the approach, but many people will think it is reasonable to ask whether a report that was intended to inform public policy should have examined the benefits and the trade-offs associated with further data centre growth. It is very clear from the terms of reference released that the report had been intended to address these issues. Why, then, were they removed? Given that data centres account for such a huge share of national electricity demand and are already increasing electricity bills, this is not an abstract question. We have had one useful admission from the Minister, who stated that the KPMG report was not commissioned as a comprehensive cost-benefit analysis. Is it not time that the Government commission a comprehensive report on the benefits and costs of data centres?

That is not an admission; it is a statement of fact, and I am on record as saying that. It is in the programme for Government. There is a comprehensive piece on the economic value of data centres. That is what the research and the report were about. On increased energy prices, various Deputies quoted reports which state that data centres are responsible for increased energy prices. We saw the report from Friends of the Earth. Notwithstanding that, from 2015 to 2023, we had a war in Ukraine and a huge energy shock, but the report in question blames data centres. We have to ask ourselves whether that is credible. This is the key thing on which people are being misled. Let us look at the contribution to the grid that data centres bring in the context of capital infrastructure and at grid capacity, the temporary emergency generation scheme and the amount that data centres have to pay. If a family is building a new house, there is a charge to be paid to put in an electricity connection. The charges for data centres are multiples of that amount. So they should be, because their infrastructural and capital costs are huge. Obviously, data centres are buying energy on the wholesale market, which is like comparing apples and oranges. An amount is certainly asked for from them, and that money can drive forward our offshore renewables. This is a question that a lot of people advocating for our offshore renewables are not answering. How are we going to finance them? Are we going to say, for the five projects I mentioned, that we are not going to use that demand here? What about the 9 GW of onshore energy we are looking to bring in and the 8 GW of solar energy? Where are we going to have that energy demand? Are we going to rely on exporting energy to other countries that are increasing their renewables and their own energy independence or are we going to look at the potential of booking that value for Irish citizens? There will be challenges along the road, and we have to be very careful that we do not get into a situation where there is a trade-off with housing or industry. The Government's new policy manages that quite well because we are driving renewables. We know it is set out in the report that there is a challenge with emissions, about 4%, from data centres right now, but the opportunity costs in bringing fully renewable energy onto the grid are very significant and no one wants to mention that.