Ireland’s Data Centre Strategy: A Crucial Digital Infrastructure for Growth

Ireland’s Data Centre Strategy: A Crucial Digital Infrastructure for Growth

As global demand for computing power surges, data centres (DCs) have emerged as the new engines of economic progress. Ireland’s ascent to becoming one of Europe's top five DC hubs brings both advantages and new hurdles - with power constraints creating a bottleneck that threatens to slow momentum.

 

Why Ireland Needs More Data Centres

• Enabling AI, quantum computing, and the digital economy
  Cutting-edge technologies require local, low‑cost, and scalable computing and storage - services that data centres provide. Without them, Ireland risks losing out on digital investment and talent relocation.

• Ireland’s appeal as a tech hub
  Political stability, EU membership, an English-speaking workforce, favourable corporate tax, and strategic transatlantic links make Ireland an irresistible destination for tech giants and startups alike.

• Rapid traffic growth
  Dublin’s data traffic is climbing at approximately 41% compound annual growth, with 30 out of roughly 80 Irish data centres built since 2018 - and nearly 40 more awaiting approval.

 

The Power Supply Logjam

• DCs account for ~21% of Ireland’s electricity use
  Data centre energy consumption has surged from 5% in 2015 to 21% in 2024.

• Grid has reached capacity
  EirGrid has halted new connection agreements in Dublin, warning of a potential “data centre exodus” without urgent grid expansion.

• Hyperscalers pausing investment
  AWS has openly stated that without progress in renewables and offshore wind integration, it will delay further investment in Ireland - citing conditions in countries like Spain and Germany as more favourable.

 

What Needs to Happen Next

1. Greater transparency and clarity
   Authorities should clearly define what technical and environmental criteria - such as sourcing low-carbon energy and on-site storage - are required for data centre project approval.

2. Accelerated grid upgrades
   National efforts like EirGrid’s “Power Up Dublin” must be sped up to relieve network pressure and enable further expansion.

3. Renewables synergy
   Providers should adopt on-site renewable generation or battery systems to align with Ireland’s net-zero targets and support grid reliability.

4. Regional diversification
   Encouraging data centre development outside Dublin, in areas such as Cork, Limerick, or the midlands could tap underutilised grid capacity and balance nationwide digital growth

 

 Broader Economic & Green Benefits

• Strengthening inward investment
  Sustained data centre expansion fuels high-value inward investment, underpins job creation, and boosts Ireland’s tax revenues.

• Supporting a tech supply ecosystem
  Beyond core infrastructure, opportunities in engineering, construction, cooling, and energy services can spur Irish SMEs and attract private equity deals.

• Enabling the green transition
  Integrating DCs with renewable energy supports Ireland's Climate Action Plan - meeting 80% renewables by 2030 and positions DCs to work in harmony with transport, pharmaceutical, and electrification sectors.

 

Conclusion

Ireland stands at a crossroads. On one hand, halting DC development risks slowing economic competitiveness and overlooking the benefits of digital investment. On the other, leveraging data centres as catalysts for renewable energy growth, infrastructure reinforcement, and regional regeneration can reinforce Ireland’s status as a global tech magnet.