Opinion Ireland's green energy plans have a big tech data centre problem

IRELAND MUST RAPIDLY decarbonise its economy in order to meet its current climate goals, evidenced especially by the recent Government Climate Bill.

The current Climate Action Plan plans for the country to achieve 70% renewable energy by 2030, largely through onshore and offshore wind farms. 

At the same time, however, growing attention on data centres and their energy demand has led to some scepticism about the state’s ability to reach these goals without significant adjustments.

Data centres are currently responsible for 1.58% of Ireland’s carbon emissions, are projected to use 29% of Ireland’s total energy by 2028, and Eirgrid has warned that by 2026 the twin (smart) demands of data centres and electric cars could exceed Ireland’s energy supply.

Pressure on global tech companies to reduce their emissions has led to some of them, including Amazon, committing to be 100% renewable over the next decade. But are these companies just piggy-backing on national efforts to decarbonise, and if so who stands to benefit and who carries the costs?

Corporate power purchasing

Last month the SEAI launched a public consultation on the Government policy on Corporate Power Purchase Agreements (CPPAs).

Simply put, these are mechanisms through which large energy users – the likes of data centres, large tech companies – can buy up power directly from energy developers, such as wind farms.

The Government hopes that CPPAs will account for approximately 35% of all new renewable energy generation by 2030.

The rationale is that this will shift costs away from consumers and increase renewable energy supply. A closer look suggests that this is far from self-evident. First, how can we be sure that CPPAs are not just siphoning off renewable power from projects which would be going ahead anyway?

This is called ‘additionality’ and has been a longstanding and controversial issue within climate change policy worldwide.

In the Irish context, there is not currently a lack of demand for wind energy at the national level.

The relatively low costs of wind energy mean market demand isn’t really a major problem anymore, and there is existing and growing interest from international investors in Irish wind energy.

The State is fully on board for rapid onshore and offshore expansion between now and 2030 and is creating a very attractive environment for the large wind sector.

Second, even if there is genuine additionality, we have questions regarding whose interests are actually served by these CPPA financed projects.

They will mean that new renewable energy capacity is secured solely by corporate buying power – in the case of companies like Amazon and Facebook, incredibly significant.

The main corporate purchasers to date, and likely up to 2030, of renewable energy, will be the large tech companies who seek to secure energy for their data storage requirements.

If the power generated through CPPAs is going to be primarily (or solely) used by these companies to power new data centres, as opposed to mitigating existing emissions, then this will make our national decarbonisation challenge even greater as the best wind resources are used up.

Who wins, and who loses?

The only real beneficiaries would therefore seem to be those corporates purchasing renewable energy. Arguments that consumers will benefit from reduced electricity costs thus need to be balanced by potential costs to the Irish state (and climate) in not meeting emissions and renewable energy targets.

This is a matter of the public interest as our commitments to decarbonise by 2030 are enshrined within EU and international agreements, and should be prioritised ahead of the economic interests of a particular sector.

Third, does the move towards CPPAs further marginalise the potential for a different energy system that more directly involves and serves local communities and delivers more balanced regional development?

Ambitions for community energy have historically been low in government, with the emphasis being on ensuring social acceptance for private wind development, rather than communities having a direct and meaningful stake in the development of energy projects.

Under the proposed CPPA policy, the role of communities will remain minor. There are other community-focused models which the Government could support in our shift towards decarbonisation.

Related to this point, there is a real risk that the existing community measures within state-subsidised wind energy projects (including compulsory community benefit fund and engagement protocols), will be bypassed through CPPAs.

Community stakeholders will thus likely bear the brunt of the negative effects of large wind/solar installations while receiving little measurable or observable benefit. This is likely to exacerbate what has been historically strong opposition to large wind (and solar) development in rural parts of the country, further undermining the state’s aim of reaching 70% renewable energy by 2030.

A resonant example is the case of the Meenbog Wind Farm in Donegal, being built by Invis Energy, which entered a CPPA with Amazon but was linked to a catastrophic peat landslide. Amazon has been largely shielded from connection to this event, while still promoting itself – and receiving state endorsement – for Ireland’s renewable goals.

Finally, the SEAI public consultation process on CPPAs was designed for and directed at industry stakeholders rather than a wider public.

This says a lot about how these financial instruments are viewed within Government – as solely technical, rather than carrying significant implications for how renewable energy is developed, who benefits from it, and who carries the burdens.

The more fundamental point here is that despite the rhetoric, state agencies, departments and Government politicians continue to consider equity and public participation as optional extras within the low-carbon transition. This is a mistake.

Dr Patrick Bresnihan is Assistant Professor in the Geography Department, Maynooth University. Patrick Brodie is a media scholar and FRQSC Postdoctoral Fellow at McGill University. The deadline for submissions for the SEAI public consultation closes on Wednesday 31 March.