Éamon Ó Cuív on data centres and Ireland's long-term grid policy

Graeadol 3 Bailem a fair 뭔가 tosioach the gleacol eisyn al ea, staaatea soocht teachtas teachtagn ton oanigus taas amnaithuaj shoiheisce teachtagn ammigus ea ganaitie Atksam e cinta marr iur hulvinciari a hên icaa dicaan tahaaraa an tawacht a wenin eisyn leahara asanr iin amanenaan tawar leis The digital economy is vital to the Irish economy in total, and we have built up over the last generation a very modern, vibrant economy in many, many sectors, but particularly in the digital sector. And your department has a clear policy to continue developing that sector. I understand that Ireland is the fifth most advanced digital economy of the European Union, and we know it is a vital employer within this economy. Therefore, we need to ensure that we have the digital infrastructure, and part of that is the provision of data centres. And this is the issue that I wish to raise tonight, that we need to have a comprehensive long-term view of how we progress. Now, I do accept that we have to challenge our carbon footprint, and I also accept that data centres are huge energy users. I understand there is a risk that the energy regulator might refuse grid connections to data centres. And if that were to happen, I think it would be a short-sighted view, because I think at times you have to go backwards to go forward. And what I mean by that is, we cannot stop start our economy. You cannot stop start your competitive place in the world. And we are living in a very competitive international climate in terms of future development. We cannot rest on our laurels as a country and think we have it made that industry is going to keep coming here, that people involved in developing the digital economy will come here if we say, well, yes, we will do this, but we will only do it in 2030. Now, unusually as a country, we are surrounded totally by water, and we have massive potential for energy production renewably into the future. We probably per head of population, because we have a small population relative to our size, have more energy around our seas than nearly any other country. And in the future, therefore, what we are actually going to have is surplus energy, and we have got choices to make. One choice is to damage the economy, because there will be a time lag or a small time lag, by not allowing the digital economy to progress. And the other is to take the longer term view and say, actually, we are going to be able to do this totally sustainably within a reasonable timeframe. For example, they are talking about the first offshore of major size to come on stream by 2030. And that is only six years away from now. And therefore, I think it is important that we make sure that the policy of grid connection, of the regulators, is in line with government policy. And time and again, we have seen, particularly in the West, this challenge of regulation being at variance with government policy. And we need a coherent view. And people will say to me that the regulator is independent. Regulators are independent day to day. But it has to be government through legislation that lays down the basic ground rules for regulation. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. with anything you've just said, but I'll give you the formal response. As you know, Ireland wants to, as you've acknowledged, to continue to be a European and global digital leader, and we are strongly committed to progressing the digital transformation of our economy. Data centres are necessary infrastructure for many of the services that we now take for granted, including technological advances such as cloud computing, quantum and AI, and the rapid growth of use of internet services by both enterprise and communities alike. Data centres are a key part of our value proposition for FDI investment, and I absolutely agree with Deputy O'Qui's contention about us not being complacent in this space. As with all large energy users, future data centre developments will need to be consistent with our climate legislation and our targets. The 2022 government statement on the role of data centres in Ireland's enterprise strategy signals the government's clear preference for sustainable data centre developments that can demonstrate a clear pathway to decarbonise and ultimately provide net zero data services. This provides a framework, the statement, for decisions to be made around energy connections over the next number of years, while we have the challenges of balancing supply and demand of energy with meeting our climate targets. The Commission for Regulation of Utilities is currently undertaking a review of the gas and electricity connection policies for new large energy users, and we expect a decision paper in the coming months which will set guidelines for new grid connections. Officials in my department are also working with officials in the Department of the Environment, Climate and Communications and other relevant stakeholders to clarify the position to industry for data centre connections over the near term from now to 2030 and the longer term post-2030. This work will include exploring options such as locating data centres close to offshore wind production. The approach of the work being undertaken by the departments will provide the data centre sector with certainty that it requires to make decisions regarding future data centre investment in Ireland, and it will support the continued growth of the digital economy in parallel the sector transitioning to net zero carbon operations. But I can assure that my department are being very robust in our submissions around the current data centre operation, and we are engaging very detailed submissions with the Commission for Regulation of Utilities. I would like to thank the Minister for the very clear and precise answer that actually addressed the issue I raised, because often you get a page and a half of irrelevancy and you get five lines of relevancy, but in this case the issue is addressed head on. And I suppose the concern I have is that in the long term, CRU would take it on themselves to ignore the wider picture. Now, I agree that every new data centre should have a road to sustainability. I absolutely accept that. But as I said, that mightn't be possible in the very short term. And that's where I think the dilemma arises for us as a nation. And in the longer term, we know that we probably have more energy off our coast than we'll ever need, and we'll be exporting it to other economies. But are we going to export the jobs and the digital economy with it? Or are we going to take a balanced view of how we go forward? And as long as there are clear paths to sustainability, within a reasonable timeframe, using the extraordinary resources of our coast, that we will allow the industry to progress in the coming five or six years until we get to that crossover point that we're going to get to, when we're actually not only self-sustainable, but able to export our electricity. And I think that that's the challenge for us, is how to manage this. And what I'm always worried about now, is that with modern regulation, the regulator seems to work at times, our regulators can have a habit, and we see this, for example, with CRU in relation to water connections for domestic houses, where it seems to work in a framework that's independent of the reality or the common good on the ground. And I think we have to be careful in this case, that we don't kill the goose that's laying the golden egg, and that instead, as you have outlined, that you want to do here, you clearly manage this process forward, to get to that sustainability, but doing that without missing a step in the development of the digital economy, including data centres. Again, thank you, Deputy Agus. Thank you. You're absolutely right. Data centres are an important part of the solution for increasing the supply of sustainable energy. Data centres can transform energy usage through the use of corporate purchase power agreements, through on-site renewables, through demand flexibility, through battery storage, and there are many other sustainable options and solutions that will reduce the burden on the grid. Our offshore wind industrial strategy recognises the important role of data centres for Ireland. Meeting our offshore renewable energy targets, which is at least 37 gigawatts by 2050, presents, as you have identified, a massive opportunity to locate large new industries of the future, in close proximity to offshore renewable energy projects, which for many communities will be well outside Dublin. Minister Peter Burke and I have had very good engagement with the Scottish Government two weeks ago about their track record in this space, and what we can learn to do that. The industrial strategy includes an action to assess the role that green energy parks will play in Ireland's future enterprise development. These new parks will attract significant foreign direct investment, will create jobs, will stimulate prosperity, by co-locating the infrastructure required to produce the renewable energy with the large energy usages such as data centres that will use that energy. In particular, there will be a requirement to identify appropriate usage for the projected increased quantum electricity that will become available as identified by you post-2030, and the new and flexible and predictable demand loads such as those required by data centres will be essential in managing that demand supply equation. Again, Deputy, I thank you for giving us the opportunity to clarify our Department's position, the Department of Enterprise position, in relation to the ongoing consultation. There is some work to be done, but I do value the opportunity to place our position on the record as well.