Data centres’ ability to reduce power consumption when requested to do so in times of shortages will also influence the decision-making.

This is according to the conclusion of a consultation process carried out by the Commission for Regulation of Utilities (CRU) on data centres.

Whether a planned data centre is located in a part of the country where the electricity supply is constrained will also be an important part of the decision, the regulator has decided.

That policy is thought to make it less likely that further data centres will be built in and around Dublin, where electricity supply is particularly constrained.

“The assessment criteria provides a number of options for data centre operators to bring solutions for all future applications in terms of their own low carbon generation and reducing consumption when that is required,’ said CRU Commissioner Jim Gannon.

The CRU says the new connection policy, which follows engagement with data centre providers and other contributors, represents a balanced decision which protects security of supply while facilitating growth.

It also says it has removed the need for radical policy changes or the implementation of a moratorium on new data centre connections, as well as providing clarity for prospective and existing application.

The regulator, which warned in its summer consultation paper that doing nothing would result in rolling blackouts for consumers, also said the new approach would mitigate risks to the electricity network.

The rapid growth in the number data centres here in recent years and their demand for electricity has put significant additional pressure on the national grid.

Over the last four years, EirGrid has seen annual increases in demand usage of around 600 GWh from data centres alone – equivalent to the addition of 140,000 households to the power system each year.

Data centre applications whose electricity demand would total 1,000 MegaVolt-Amperes have been received by EirGrid within the last year.

Adding approximately 1,000 MVA of demand load would be equivalent to adding over 16 cities with an energy consumption similar to Kilkenny to the electricity grid in a relatively short timeframe, CRU said.

EirGrid’s analysis shows that demand from data centres could account for 23% of all demand in Ireland by 2030 in a median demand scenario, and 30% in a high demand scenario.

This forecasted rapid growth in demand from data centres comes as Ireland’s electricity network is undergoing fundamental changes to reduce its emissions by shifting to renewable sources of power.

Data centre providers favour Ireland because of the presence of a large number of tech companies here, its geographic location between the US and continental Europe and the temperate climate which makes it cheaper to cool the facilities.

New applications under the connection policy are to be assessed by EirGrid and ESB Networks.

Commissioner Gannon said an Eirgrid forecast that data centres could account for almost a quarter of all electricity demand here by 2030 is sustainable if measures are put in place to tackle demand growth and if infastructure is provided to facilitate it.

Jim Gannon said that EirGrid and the ESB will be allowed to assess data centre connection applications on a number of criteria including locations and transmission infastructure.

He explained that decisions will be made based on where existing generation exists and the strength of the network has the capacity to take on the additional load.

Separately, new data centres will be tasked with bringing some solutions to the table, he said.

Mr Gannon said these could include turning down productivity at certain times and storage options.

Speaking on the News at One, he said that centres will be given this challenge as they request a connection for electricity.

He added that centres in other jurisdictions ‘follow the moon policy’ and turn down processing capacity at different points in time.

Mr Gannon said the CRU has not been prescriptive about technologies that data centres should use but many have said they will explore less carbon intensive methods.

He said there is significant internal pressure with data centre developers that is driving them towards ‘a lower carbon direction.’

He said that Eirgrid have been asked to report to the CRU every six months on the effectiveness of these measures.

Transport, Environment, Climate and Communications Minister Eamon Ryan said that data centres will have to “live within our climate plan limits” and like every industry will have to help Ireland to hit climate targets.

He said any decision by the Commission on the Regulation for Utilities and EirGrid will put Climate first.

“Data centres do bring benefits to the country but that can’t be at the expense of other sectors or of us meeting our climate targets and they know that,” he added.

ESB Networks said that as part of the consultation process, it had inputted into the CRU decision paper.

“We will review the published decision paper with a view to pragmatically implementing its provisions,” it said.