Can Ireland use data centre demand to shape the electricity grid for the better?

The Irish state-owned electric power transmission operator, EirGrid, launched a public consultation recently entitled Shaping Our Electricity Future, outlining the different options available to reach a target of 70% of Ireland’s electricity coming from renewable sources by 2030.

It provided four options to achieve meet the projected increase in demand for electricity over the coming years.

  1. Generation-led: putting renewable energy sources in places where the grid is already strong. Essentially, this means relying mainly on offshore wind farms in the Irish Sea close to the densest population and demand areas. EirGrid believes it could hit the 2030 target with this approach at a cost of €700m.
  2. Developer-led: continue with the current policy of letting developers decide where to locate renewable sources of electricity. This occurs “regardless of the local strength of the grid”. EirGrid says the problem with this approach is “the grid won’t be ready to take 70% of Ireland’s electricity from renewable sources by 2030”. It would also be very expensive (€1.9bn) and disruptive.
  3. Technology-led: use new technologies to move power from where it is generated to where it is used. EirGrid says this would be expensive (€1.5bn) and there is “a high degree of technical uncertainty in this draft approach.”
  4. Demand-led: EirGrid has to connect high demand users, such as data centres, to the grid wherever they choose, usually on the east coast, irrespective of existing demand for power. This option would locate those users closer to where developers of new renewable electricity want to operate, in the west and south of the country. It has the lowest cost (€500m) and would make the grid ready for 2030 clean energy targets.

Data centres are an important consideration in terms of electricity demand because EirGrid calculates they will account for “27% of all electricity on the grid as we near 2030”. Ireland has been very successful in attracting data centres to locate here but the irony is this success is putting more stress on the electricity grid and the increased demand from them will make the target of 70% of renewable electricity harder to hit.

But the good news is that Ireland can use its success in attracting data centres to locate here as a vehicle to change the shape of its grid to better suit the generators of renewable sources and hit the 2030 target in the most effective manner.

It hardly needs to be said, but there is no over-riding requirement for data centres to be located in areas of high population density, such as near Dublin. None whatsoever. In fact, the opposite may be the case, because the reliability of power supply can be harder to maintain in an area of high power demand, especially if that demand is expected to increase at a very fast rate.

It would seem far more sensible to place data centres close to sources of renewable power in areas where they are not one of many data centres and hundreds of thousands of people drawing electricity from the same part of the grid.

There could also be security and resilience issues. With so many data centres on the same part of the grid, more of them can be knocked over if there is a local problem. Dispersing data centres to other parts of the country makes it easier to keep most of them up and running even if there is a local issue.

And let’s not forget employment, housing, transport etc. The current developer-led policy ensures any employment opportunities arising from data centres are confined to the east coast, an area already sucking up most of the job opportunities in Ireland. Placing more data centres in and around Dublin heaps even more pressure on areas such as land, housing, transport, schools and infrastructure.

The sensible option would be to spread the opportunities further around the country and start to diversify away from Dublin and the east coast.

History suggests the sensible option for the grid and for the country will not be adopted in full. Is it likely to be more of the same developer-led approach but with a light garnish of the demand-led approach on the top to make it look respectable? One thing this country is not short of is wind. Let’s hope the politicians don’t succumb to their natural instinct to convert plans for the future of the electricity grid into yet more hot air.