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Quarter 2, 2019, has brought with it some positive news in the Irish datacentre industry continuing the trend of strong momentum across the sector.
€1bn in new datacentres is currently under construction with a further €3.5bn with planning permission expected to be completed by 2025. There are now a total of 34 new datacentres in the pipeline, 8 of which are in construction. There are 53 currently active.
With the continued growth in the datacentre sector in Ireland, the island has also seen subsequent investment and growth in the renewable energy sector. The need for more renewable energy sources has been cited by Eirgrid, SEAI and the Irish Academy of Engineers to ensure the sustainability of the sector which we welcome.
Specifically, on top of the additional capital investment from datacentre providers, a recent report from the Irish Academy of Engineers highlighted Ireland will require a €9bn investment in renewable energy sources by 2027.
The datacentre industry globally has progressively moved to a renewable first model and the industry in Ireland is no different. As recognition of this reality, we welcomed the Irish Government’s commitment last quarter to achieve a 70% renewable energy target by 2030 but the government cannot drive that agenda alone.
We have seen in recent times several large scale investments in the renewable energy sector from leading datacentre operators such as Amazon and Microsoft. We expect these type of non subsidised investments to continue. Amazon only recently announced Cork as the location for a 23Mw wind farm development on top of an earlier investment in April this year in Donegal. Wind power already produces 37% of electricity on our grid and has seen a 100% increase in capacity since 2012.
In many ways, the economic benefits to datacentres are now four-pronged. Direct investment in construction-related activity is now set to top €11.3bn by 2023.
Irish construction exports have increased significantly in recent years to €2bn and our expertise in datacentre construction is playing a positive part in that growth according to the Construction Industry Federation.
Meanwhile the value of ICT exports has grown to €69.8bn according to CSO figures in 2017. In addition, a recent IDA/Grant Thornton report from 2018 highlighted a multiplier effect of three times that of what has invested annually in the operations of DC’s in Ireland creating thousands of jobs directly and supporting thousands more indirectly.
The challenges of success are increasingly becoming known in policymaking circles as the sector's footprint expands in Ireland. The principle challenge is that of sustainability. The datacentre industry will continue on its course to invest in renewable, sustainable energy solutions into the future.
The OECD in 2000 recognised Ireland as the number 1 software exporter in the world ahead of the US. 19 years later and Dublin has been recognised as the largest datacentre cluster in Europe. We have maintained our Tier 1 status because of our ability to change and innovate specifically around the world of data. In the same way that Ireland found solutions to the change from floppy disks to datacentres, we must now look at how we harness our natural resources including Wind, Wave, Biogas and Light to maintain Ireland’s name as the "Data Isle".
We look forward to engaging with stakeholders on the issue of sustainability and energy requirements in the sector to ensure strong growth into the future ensuring Ireland’s place as a global leader.
Founder & President Host In Ireland