Ireland's Data Centres Are Straining the Grid — Can Growth and Climate Goals Coexist?

Ireland has become a major global hub for data centres, but the sector's rapid expansion is placing significant strain on the national electricity system and complicating the country's climate ambitions. The challenge pits huge foreign investment and jobs against energy demand, grid stability and decarbonisation targets.

Scale and strain

More than 80 data centres now operate across Ireland, concentrated especially around Dublin. By 2024 these facilities accounted for roughly 22% of metered electricity use — far above the EU average of about 2–3%. National grid operator EirGrid warns that, as artificial intelligence workloads grow, data-centre demand could reach 30% of national power by 2030.

Energy consultancy Wood Mackenzie estimates that level of consumption would be equivalent to powering two million homes for a year. In some high-demand areas, operators have already relied on on-site backup generators, which typically run on gas or oil, further complicating emissions plans.

Economic benefits and risks

Data centres have attracted billions in investment, created jobs and helped anchor large tech companies in Ireland. The digital sector contributes an estimated 13% of national GDP, and, together with pharmaceuticals, underpins a substantial share of corporate tax receipts.

But industry leaders warn that planning constraints and grid bottlenecks could jeopardise future investment. Maurice Mortell, head of Digital Infrastructure Ireland, says the sector has already attracted over €18 billion of investment with another €5.8 billion planned — projects that could be "marooned" without adequate power or a clear policy framework.

Environmental concerns

Campaign group Friends of the Earth has described the current trajectory as "completely unsustainable." Rosi Leonard, a spokesperson for the group, calls the situation a fundamental climate-justice issue: data centres are consuming a large share of newly added renewable output and increasing pressure on national carbon budgets.

Climate expert Barry McMullin of Dublin City University warns that rapidly expanding a sector that substantially increases energy demand makes meeting emissions targets much harder. He believes alignment between data-centre growth and national emissions goals is unlikely to be achieved for another decade without major changes.

Planning, policy and grid upgrades

The government and EirGrid say they are planning network upgrades to distribute demand more evenly across the country, and officials have pledged a refreshed national strategy and grid improvements within five years. Yet experts remain sceptical these measures will keep pace with fast-rising demand.

Local planners have begun to push back: a Dublin council refused a proposed Google data centre, citing insufficient grid capacity and too little on-site renewable energy. Those decisions signal a growing tension between local capacity limits and national economic priorities.

Heat recovery experiments — useful but limited

Some projects are testing ways to reduce the sector's climate footprint by capturing waste heat. In 2023 Amazon Web Services partnered with a local Dublin authority to pipe hot water from a data centre to a nearby heating hub that already warms offices and a library, and plans to serve hundreds of homes.

Admir Shala, project manager at the Heatworks heating hub, says there is potential to replicate such schemes. However, experts caution that Ireland currently lacks widespread heat-distribution networks and that data centres produce heat year-round while residential heating demand is seasonal, limiting straightforward reuse.

What comes next?

The situation presents a trade-off: continuing to attract major tech investment risks higher fossil-fuel reliance and missed climate targets, while imposing strict limits could slow economic gains from AI and cloud growth. Policymakers, industry and communities now face pressure to accelerate grid upgrades, lock in on-site renewable generation, improve heat reuse infrastructure and provide clearer planning rules — or risk losing both economic opportunity and climate progress.