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Paul Murphy: Urgent warning on data centres and energy prices

Paul Murphy: Urgent warning on data centres and energy prices

Deputy Paul Murphy warned that expanding data centres and a liberalised energy market are driving up electricity prices and endangering households. He urged a ban on future data centres, called for price caps and said the government is failing to shield people from winter energy hardship.

Data centres and energy demand


Murphy said data centres already consume 11% of the State's electricity and could account for about 30% by 2030. He cited Moody's warnings from late 2018 and 2019 that continued expansion of this industry would push up energy prices, and criticised ministers for failing to mention data centres in their remarks.

Government policy and planning decisions


Murphy accused the government of refusing to touch data centre development and of planning to designate them as strategic infrastructure - a move that would allow projects to bypass the regular planning process. He said the Greens hold the balance of power and that votes on a moratorium and on a bill to ban future data centres could pass depending on Green support.

Market liberalisation and price regulation


Responding to the government's defence that prices are market outcomes, Murphy argued the liberalised market has delivered unaffordable price rises. He criticised ministers for limiting consumer advice to price comparison websites while leaving wider regulatory options unused, and said the government could impose price caps by ministerial order.

International evidence on privatisation


Murphy referenced Professor John Quiggan's review of 20 years of electricity privatisation in Australia, saying privatised networks saw the biggest price rises, a surge in consumer complaints from around 500 to over 50,000 annually, reduced reliability and a diversion of resources to management and marketing rather than investment in renewables.

Paul Murphy — shot from statement: Paul Murphy: Urgent warning on data centres and energy prices (06.10.2021)

Consequences and proposed measures


Murphy warned of lethal consequences if action is not taken, saying people could die this winter without government measures to shield them from price shocks. He called for immediate options including maximum price caps and other interventions to prevent households having to choose between heating and food.

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Transcript
Thanks, Cairn Corlea. Firstly, thank everybody who contributed to the debate, and thanks to, I think, all the opposition groupings who said, or some of them at least, said that they would support the motion. I want to respond on a variety of the arguments used by the government, but just maybe to start on what was the elephant in the speeches of the two government ministers who spoke, or not in speeches, which is the question of data centres. You are talking about energy usage, you are talking about price rises, you are correctly talking about the predominant international factors in those, but no mention, not a single mention, over the role of data centres. This industry, which is consuming 11% of our electricity now, is going to consume maybe 30% of our electricity by 2030, and which Moody's predicted at the end of 2018 and again at the end of 2019, that if we continue on this road, and we did, that energy prices would rise as a consequence. And you have an incredible situation where a government is repeatedly unable to give a commitment to people in a developed economy that there won't be blackouts. It cannot give that commitment. It is pointing in the opposite direction of its own commitments in terms of climate. It is attempting to go down an upward escalator by escalating our energy usage dramatically through the expansion of these data. of these data centres, while at the same time trying to move to renewable energy. And what is the response to all of this is to say there is no way we can touch the data centres. Not just that, it is to double down on the data centre development. They are going to proceed with the idea of designating them as strategic infrastructure, which means that they can bypass the regular planning process. And all of that is a disaster for the environment, it is a disaster for households. And it is not too late. The vote on our bill to ban data centres will take place this evening. It is the Greens who hold the balance of power on this issue. If the Greens had voted with the Social Democrats and the Opposition on the Social Democrats motion for a moratorium, that would have passed. If the Greens vote with us to ban the development of future data centres, then that too will pass tonight. And that is a question about, do the Greens in government with Fianna Fáil and Fianna Gael, do they put the interests of the big tech corporations first, or do they put the interests which are coincide of ordinary people and the environment first? And obviously everyone knows what, unfortunately, the answer is going to be. Just to get to the meat of what the government's argument was, I think it is summed up in a particular paragraph from Minister Smith. He says it is important to recognise that these price increases are not government or even regulatory decisions. This is because price regulation ended many years ago. Suppliers compete with each other on prices and set their own prices accordingly, as you would expect in a competitive, commercial, liberalised market. But that is kind of the point. That is kind of the point. The private market, which the government hails, which the Minister earlier said, is the government's position that a liberalised market will bring down prices. The truth is that that has not happened. The truth is that the opposite has happened, and that evidence is international. But then the government, including the Greens, just look at this private market and the fact that it is delivering unaffordable price increases for ordinary people, and they say there is nothing we could potentially do. In fact, the Minister, in his closing statement, is the government. The Minister is reduced to encouraging people to go on to consumer price comparison websites and telling people how much they can save. The government has the legal power at the stroke of a ministerial pen to regulate prices, to put a maximum price, reduced to advertising a few consumer switching websites. That is what the government is reduced to now in its hailing of the market and its bowing before everything that the market will do, regardless of the consequences. I want to double down on the point that the evidence is clear that privatisation is a disaster in terms of the environment and in terms of the prices that people pay, as well as workers. The point for Australia, which I did not get a chance to make earlier, Professor John Quiggan examined 20 years of pro-privatisation reform in his report, Electricity Privatisation in Australia, a record of failures. He was able to compare very similar states across Australia with privatised and non-privatised networks. Price rises were highest in states with privatised electricity networks. Customers' dissatisfaction jumped, with complaints to the energy ombudsman in privatised states leaping from 500 to over 50,000 per annum. Resources were diverted away from operational functions to management and marketing. Reliability declined, promised increases to investment efficiency have not occurred, real labour productivity has reduced. I could go on. Exactly the same story here, where the big profits generated have not been reinvested in terms of a shift to renewable energy. Instead, those companies are prepared just to hike up the prices and make ordinary people pay at this point in time. To conclude, I will just go back to the basic point. People will die this winter if the Government does not take action to shield them from the impact of energy prices. That is a fact. The Government in its motion is proposing to take no action whatsoever. That is the choice of the Government. There are a lot of options available to the Government to do something about this. To shield people from the impact of energy prices. To not mean that people have to make the choice between energy, heating their house and food. Number one, very simple, maximum price caps. The Government has the power to do it. It could do it. Right now, it would give an immediate relief. Secondly, do not increase the carbon tax. At the very least, do not heap extra price rises imposed by the Government onto energy in the next Budget. Thirdly, actually increase the fuel allowance by the amount that the extra energy is going to cost for people. And extend it so people are able to access it. And finally, move away from this disastrous model of privatisation. If we want to have a just, rapid transition to a zero-carbon economy, we need public ownership, democratic planning in our energy sector. Thank you. Thank you.