Data centres in the context of Ireland's carbon budgets

This report, authored by Prof Hannah Daly and commissioned by Friends of the Earth, explores the implications of rapidly increasing data centre electricity demand on Ireland’s carbon budgets and broader decarbonisation commitments. As of 2023, data centres accounted for 21% of Ireland’s electricity consumption, a figure projected to rise significantly by 2030. This unprecedented growth is matching the deployment of renewable energy, contributing to a stagnation in Ireland’s progress toward reducing greenhouse gas (GHG) emissions and meeting legally-binding carbon budgets. 

Key findings include:

•  Electricity demand from data centres has grown at an annual rate of 22.6% since 2015, compared to 0.4% for other sectors. By 2030, data centre demand is projected to exceed that of Ireland’s entire industrial sector under high-demand scenarios. Without data centres, Ireland’s electricity demand would have seen minimal growth over the past decade. Instead, demand between 2012 and 2022 grew by 24.7%, the second-fastest rate in the EU, while electricity demand in the EU fell by 3.1%.
• Between 2017 and 2023, all additional wind energy generation in Ireland was absorbed by data centres. As data centre demand has expanded at the same rate as renewables generation, renewables are not delivering net reductions in fossil fuels use in power generation. Electricity demand from data centres far outstripped the additional renewable energy being procured through CPPAs between 2020 and 2023, and the proportion of CPPAs undertaken by data centres is itself unknown.
• Dozens of data centres have secure or are seeking connections to the natural gas network to overcome local power network constraints. On-site natural gas generation by data centres is less efficient than grid-scale generation, further increasing emissions intensity. Current national energy demand and GHG projections underestimate the impact of gas demand, as emissions from on-site generation are not fully accounted for, creating a significant blind spot in Ireland’s climate action planning. The potential scale of demand from data centres who have made formal enquiries to connect to the gas network is enormous, potentially exceeding Ireland’s total present energy demand, but is highly uncertain. On the other hand, if gas connections were temporary, data centres used them for a very small percentage of time, and switched to 100% renewables supply as quickly as possible, the risk would be minimal. 
  However, it is not clear whether this outcome is realistic given the current extraordinary pace 
  of demand growth.
• Data centres are driving additional GHG emissions from both electricity and natural gas consumption, 
  threatening carbon budgets.
• Biomethane has been proposed as a mitigation strategy but the scale of demand for data centres 
  would exceed sustainable production capacities and is unlikely to meet demand without diverting 
  resources from critical sectors like heating and heavy industry, undermining its decarbonisation 
  potential.
• Ireland lacks real-time emissions data for data centres, hindering accurate assessments of their climate 
  impact. Moreover, the shift to on-site gas generation transfers energy security risks to the gas network,
  creating vulnerabilities in an already constrained system and creating the risk of fossil fuel lock-in. 
  This report concludes that unchecked data centre growth poses a significant threat to Ireland’s climate 
  commitments. Without decisive action, data centres will continue to divert renewable energy to serving demand growth rather than displacing fossil fuels, deepen reliance on fossil fuels, and exacerbate Ireland’s carbon budget overshoot and energy security threats. A comprehensive policy framework is urgently needed to ensure Ireland’s economic development and enterprise strategy are aligned with legally-binding climate commitments. 

Policy recommendations include:

• Enforce stricter power and gas grid connection policies for data centres, requiring alignment with 
  carbon budgets
• Enhance transparency and research, by mandating real-time GHG emissions reporting for data centres 
  and improve data collection on gas usage and renewable energy procurement, to allow a full 
  assessment of the current and potential future GHG impact of data centres.
• Develop a national electrification strategy to accelerate the electrification of transport, industry and 
  heating, ensuring that renewables primarily displace fossil fuels. Create a plan for the use of surplus 
  renewable energy production that best serves climate and societal goals, that is not limited to serving 
  data centre needs, if and when this surplus arises. For example, this could entail delivering deeper 
  climate mitigation, such as in aviation fuels, greed fertiliser, Direct Air Capture and synthetic proteins.