Data centres use 23% of power as Dáil debates bills and renewables

Deputy Pa Daly asked the Minister for Climate, Energy and the Environment the steps he is taking to address the fact that data centre demand is outpacing growth in renewable energy. In the chamber Deputy Paul Donnelly pursued the question, asking the Minister to outline the steps he is taking on that point.

Deputy Dillon replied: "Data centres are central to Ireland's economic and digital future." He said beyond their direct economic contribution, they underpin the wider digital economy and support investments in renewable energy through mechanisms including long-term power purchase agreements.

He said the Government is prioritising development of more renewable energy, including reforming the planning system to make it easier to build clean energy projects. He said sustainable progress has been made and Ireland already regularly generates 40% to 50% of its electricity from renewable sources, with connected renewable capacity now exceeding 8.9 GW, an increase of more than 5 GW over the past decade.

The main control he described was the Commission for Regulation of Utilities large energy user connection policy. For new data centres seeking electricity connections, he said it established stringent criteria to address security of supply, system constraints and renewable targets. This includes requiring that at least 80% of annual electricity demand be met with additional renewable energy generated in Ireland.

He said the large energy user action plan provides a plan-led approach to facilitate future investment in energy-intensive sectors while aligning demand with renewable deployment and grid infrastructure. He said the aim is ensuring that the cost of developing necessary additional infrastructure is borne in a manner that is fair and balanced, alongside green transition, security of supply and affordability objectives.

Deputy Donnelly challenged that account, arguing that data centres absorb new renewable capacity and leave the rest of the system reliant on fossil fuels. He claimed electricity demand in Ireland is growing at roughly 23% annually and that data centres currently consume 21% or 22% of total electricity, suggesting it could rise to more than 30% by 2030.

He claimed data centres absorb virtually all new added wind and renewable capacity, prolong fossil fuel dependency, drive up wholesale prices and bills, and put strain on grid reliability. He also claimed there are real fears in communities about energy supply after what he described as the lifting of a moratorium on new data centres by the Government in January.

Deputy Donnelly claimed Ireland leads the EU with 31 MW of data centre capacity per 100,000 people. He described that as more than triple the nearest competitor, the Netherlands, and ten times the European average, and asked where that leaves energy strategy and the ability to cope with the amount of energy data centres use.

Deputy Dillon replied that Deputy Donnelly had not mentioned the benefits of data centres in underpinning enterprise around ICT and digitalisation. He said: "More than 180,000 jobs are underpinned as part of this sector." Deputy Donnelly asked if those jobs are in data centres, and Deputy Darragh O'Brien interjected to say they are in ICT.

A second question tabled by Deputy Daly asked if the Minister is aware of recent comments made by the head of a company, details supplied, and if he agrees with the assessment. In the chamber Deputy Donnelly identified the speaker as Ronan Kelly of Digital Infrastructure Ireland and asked if the Minister is aware of the comments and agrees with them.

Deputy Dillon did not state agreement. He said: "All development in Ireland must go through an independent and robust statutory planning and regulatory process, and public participation in such processes is important." He said it is a matter for the relevant independent bodies to make decisions in line with their statutory powers.

He said developers of individual projects should consider engaging with local communities in advance so communities understand proposals and concerns can be addressed. He added that developers and representative bodies should be able to make the case in public discourse in economic or social terms for developments, whether housing, business, factories, data centres or other private-sector infrastructure.

He said the Government continues to prioritise a balanced approach to digital infrastructure, supporting investment in cloud, connectivity and data services while driving targets on renewable energy, grid efficiency and carbon reduction. He described the large energy user action plan, published in January 2026, as setting out a plan-led approach for very large and energy-intensive investments including data centres, saying the plan-led approach is the first for industry and energy policy.

Deputy Donnelly criticised lobbying around the sector, saying Digital Infrastructure Ireland, which he said is partnered with data centre firms, says it lobbies to promote Ireland as the best location to host data. He said it wants to expand digital infrastructure to host more data centres, having previously lobbied Cabinet Ministers about connections policy for data centres to the grid.

Deputy Donnelly quoted Mr Kelly as saying: "It just moves to the next country, because the investors have the barrel of the gun pointed at all the CEOs and are saying, 'Just get it built', and they’ll go to another country soon enough if they can’t do it here." He asked whether billionaires and trillionaires influence Irish policy and legislation on data centres. Deputy Dillon replied the approach is managed-led rather than unrestricted growth, with strict requirements for large energy users to use up to 80% renewable energy, and pointed to 180,000 jobs underpinning the digital and ICT services sector.

Deputy Mark Ward asked for an update on the use of data centres in Dublin and to outline the increased cost to consumers. He said: "We are seeing electricity bills going up for ordinary families while companies which make billions in profits every year pay a lower rate." He also raised noise pollution in communities.

Deputy Dillon said the Commission for Regulation of Utilities, the CRU, is responsible for regulation of security of electricity supply, including ensuring systems can meet growing demand and manage impacts on consumer and system costs. He said the network tariff set by the CRU to recover the cost of developing, operating and maintaining the grid funds a grid more resilient to storms and able to supply a growing population, new houses and expanding businesses.

On costs, he said: "The CRU advises that extra-large energy users like data centres have in recent years increased network costs, with average increases of 175% compared with a 45% increase in domestic customers from 2020 to 2026." He said the CRU is progressing a multi-annual energy network tariff review project to reform charges to ensure costs are fairly distributed across different consumers.

On scale, he said CSO analysis puts data centres at around 23% of national electricity demand in 2025, and roughly half of metered consumption in the Dublin-Meath region, according to the CRU, given the concentration of data centres there. That concentration is why Dublin is central to debates over grid investment, connection policy and local impacts.

He said data centres are fundamental to Ireland's position as a leading global hub for digital and technological enterprise and form a core part of State digital infrastructure. He said the Government continues to work with the regulator and system operators to assess expected demand from economic and population growth, housing, electric vehicles and heat pumps.

Expected next step: This may change.

The next step identified in the answers is the CRU tariff review. Deputy Dillon said the CRU is progressing a multi-annual energy network tariff review project to reform network charges to ensure costs are fairly distributed. The passages do not give a completion date.

For new projects, the test described by the Minister remains the large energy user connection policy and the plan-led approach in the January 2026 action plan. The clearest practical condition outlined is that new large connections meet at least 80% of annual electricity demand with additional renewable energy generated in Ireland.

Planning remains a separate statutory process. The Minister stressed independent decision-making and public participation, and advised early community engagement by developers. Any future changes to legislation, grid policy or targets would require separate Government or regulatory decisions.