Data centres must be banned from fuel bailout package

17 October 2022
  • Surcharge levy should be placed on all data centres
  • Pressing need to re-evaluate State “open door” policy for data centres

Labour Finance Spokesperson Ged Nash has today (Monday 17th October) called on the government to ban data centres from the new energy relief scheme announced as part of Budget 2023 and to put in place a temporary surcharge levy on data centres to claw back some of the environmental cost.

Deputy Nash said:

“Ireland already has some of the highest energy prices in the EU, with the growth in data centres more than partly responsible. Not only are these centres’ siphoning off new renewable energy capacity that comes on stream, but their insatiable demand is also pushing up prices for ordinary households. The reality is that families are being forced to subsidise the cost of electricity to behemoth data centres during the worst energy crisis in modern times.

“We believe that rather than households being forced to shoulder the burden, we must find innovative ways to make large-energy consumers like data centres pay their fair share. As part of Labour’s alternative budget, we called for a levy on data centres to help reduce the bills for ordinary households. Yet the Government refused to even entertain such reasonable proposals. That is not acceptable.  We know that the electricity consumption of data centres has increased exponentially in recent years.

“The electricity demand by these centres increased by one third last year alone and has almost tripled since 2015. This is unsustainable. This trend shows no sign of abating. More than half (62%) of the country’s expected increase in electricity demand between 2021-2025 is set to come from extra-large energy users such as data centres.

“This is putting a massive and unsustainable strain on the State’s energy grid, electricity prices and our climate emission. The Minister for Environment has confirmed that an additional surcharge of €10 per MWh on data centre electricity consumption within the State would raise nearly €40m (based on 2021 figures). In all reality, the revenue generated would be even higher based on this year’s figures.

“Alongside a windfall tax on the profits or energy companies, this additional funding could be ringfenced to cushion struggling families from rapidly soaring costs. More broadly, we also need to re-evaluate the State’s existing “open-door” strategy towards data centres especially given these centres are light on jobs, but heavy on environmental impacts.”

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