Dublin, 15th December 2023: It’s a bold question and one that Host in Ireland recently attempted to answer during a webinar with Maurice Mortell, Seamus Dunne, Peter Lantry, and Dave McAuley, hosted by Garry Connolly.
It’s important to understand the context of ICT in Ireland’s economic history. Fifty years ago, Ireland joined the EU, unlocking access to capital, infrastructure development, and economic shifts. Back in 1973, Ireland’s economy looked starkly different, with cattle and agriculture our most significant exports.
The evolution since then has been remarkable. Waves of technology – from mainframes to personal computers to the omnipresence of the cloud – have transformed Ireland to a modern tech stronghold, pivotal in the digital age. ICT and related services is by far our largest export accounting for over 28% of Ireland's exports. Data has been part of our DNA and our economic growth and transformation for the last 50 years.
Maurice Mortell recounted the inception of Ireland's data centre industry in the mid to late 90s, emphasising the key steps that were taken to initiate what's now a thriving sector. In those early days, efforts supported by the Department of Communication, aided by the IDA, attracted Global Crossing to establish Atlantic fibre connections, linking North America with Ireland. This infrastructure attracted early data centre partners such as Interxion, Telecity, and others, despite uncertainties about future demand. This led to a period of significant investments that resulted in major players like Microsoft, Amazon, and Google establishing their European operations in Ireland. Perhaps most importantly, it was the start of the evolution for many different industries that made Ireland home.
In some ways Ireland has become a victim of its own success. The industry's rapid growth has outpaced the energy infrastructure's ability to sustain it. This is not only an impediment to future growth, but also Ireland’s alignment with European strategies aimed at digital infrastructure and sustainability. Unless something is done, it could be a very different type of transformation ahead of us.
According to Dave McAuley, this shouldn’t necessarily be a surprise to anyone. In the last seven years, the industry has shown consistent and predictable growth. Data centres have not broken the power grid in Ireland. They just exposed the fact it’s not fit for purpose for a modern economy. Layered onto that is the fact growth in electricity supply is going to well outstrip the growth in demand from data centres. We have the potential for nine gigawatts of onshore wind and eight gigawatts of solar in Northern Ireland today, with more likely to come.
Despite the sentiment that eliminating data centres could resolve energy demand and meet climate targets in Ireland, it’s simply not true. As Peter Lantry explained, with data centres playing such a key role in Ireland’s economy, the focus should shift towards improving the system. The regulatory constraints currently imposed have prevented the expansion of purpose-built, energy-efficient data centres. Consequently, companies seeking sustainable solutions are hindered, potentially pushing them to establish their operations elsewhere.
Now more than ever, collaboration is needed between the industry, regulators, and the government to create a roadmap for flexibility in utilising renewable energy. There is a need for a design solution that allows the industry to be flexible with the electricity grid. Coordinated action is the only way to prevent further setbacks in sustainable development within the data centre industry and to align efforts in supporting Ireland's renewable energy goals.
To close it out, Seamus Dunne reminded everyone of what a great success story Ireland is. A relatively small country has a great presence on the international stage and is evident of how foreign direct investment can pay off. There is, however, a real risk of being left behind if we cannot figure out how to invest in the grid and bring on renewable energy on board quickly. In a digital economy, things move fast and regulation pauses can have a detrimental effect. Ireland needs to figure this out and do so quickly.
Garry Connolly closed out the webinar with the reminder that Ireland should not sleepwalk into a situation where we become a backwater for innovation after working so hard these past 50 years to shift Ireland’s economy. Let's work together and find the solutions to decarbonise our electrical grid whilst maintaining the dividends of ICT. We can’t lose sight that ICT and related services are a crucial ingredient of our economy both for jobs and economic development.
Watch "Is Ireland destined to become a tier 2 data hosting destination?" Webinar replay here:
Host In Ireland Partners 2023