Ireland has positioned itself as a key global hub for technology, with data centres forming a critical component of its strategy to attract Foreign Direct Investment (FDI). Major digital companies like Amazon, Microsoft, Meta, and Google have invested heavily in Irish data infrastructure, underscoring Ireland’s role in supporting the global digital economy. The upcoming DataCentres Ireland 2024 conference in Dublin will address the industry’s impact on Ireland’s economy and future, along with the pressing challenges it faces such as power supply and regulatory hurdles.
The Role of Data Centres in Ireland’s Economy
Data centres provide essential infrastructure, enabling data storage, processing, and connectivity for global businesses. According to IDA Ireland, these centres not only create high-value jobs but also make Ireland more attractive to tech giants due to its strategic connectivity and well-developed infrastructure. As of 2022, IDA Ireland reports that data centre companies in Ireland directly employ around 16,000 people. Including contractors, however, this figure rises to 27,000. Minister for Enterprise Peter Burke highlighted the economic growth data centres have facilitated, noting that these facilities contribute significantly to Ireland’s revenue and tech sector. AWS has increased economic output in Ireland by over €11.4 billion since 2012, contributing nearly €2.4 billion in additional economic output in 2022 alone. Its parent Amazon Amazon invested over €4.8 billion in the country in 2022, bringing the company’s total investment in the country to more than €17 billion since 2020. KPMG has reported that Equinix’s annual contribution to Ireland’s economy was €15.8 billion or 3% of the country’s total GDP.
Major Investments by Tech Giants
Investment from companies such as Amazon, Microsoft, Meta, and Google has propelled Ireland’s data centre landscape. Amazon, through its Amazon Web Services (AWS) division, has established extensive data centre facilities across Ireland, including locations in Clonshaugh, Drogheda, and Tallaght. Microsoft has expanded its presence at Grange Castle to support its Azure cloud services, while Meta has invested in a major data centre in Clonee, County Meath, for its European operations. Google recently applied for permission to construct a 750,000 sq foot data centre in Grange Castle and is delayed in the planning process.
Beyond infrastructure, these investments reinforce Ireland’s reputation as a tech and innovation hub, laying the groundwork for future growth. IDA Ireland’s CEO Michael Lohan emphasised that data centres play a pivotal role in supporting digital technologies and create a broad ecosystem that sustains around 40,000 jobs in design, engineering, and other fields related to data centres.
Why Ireland Attracts Data-Driven FDI
Ireland’s appeal as a data centre destination lies in several factors, including its geographic position between North America and Europe, favourable tax policies, good fibre infrastructure, and an English-speaking workforce. Host in Ireland, describes data centres as the “cornerstone of digital FDI” in Ireland, noting that the country’s location near EU and US markets, combined with regulatory stability, makes it an ideal base for global tech operations.
Power and Planning Challenges
However, the expansion of data centres in here has also led to challenges, particularly regarding power usage and planning constraints. Data centres consume substantial energy, with estimates suggesting they now use around 20% of Ireland’s total electricity generation. This demand raises concerns over the sustainability of such consumption, particularly given the slow rollout of renewable energy infrastructure. The Government has responded by requiring data centres to demonstrate that they can source their own sustainable energy, aligning with Ireland’s climate and energy goals. Outgoing Minister for Environment, Climate, and Communications Eamon Ryan highlighted the need for data centres to operate within Ireland’s “climate limits” and “power and grid limits.”
Planning permissions pose another significant challenge. Obtaining approval for new data centres has become more complicated, with environmental groups and local authorities scrutinising the environmental impact of these projects. According to a recent review by IBEC, a streamlined and transparent planning process is essential if we are to continue attracting high-value data centre investments. The upcoming Data Centres Ireland conference will likely see discussions on how to address these planning challenges while balancing growth with sustainability and community considerations.
Moving Towards Sustainable Data Centres
Sustainability has become a central focus for Ireland’s data centre industry. Companies such as Amazon, Microsoft, Meta, and Google have committed to ambitious renewable energy targets. Amazon has invested through CPPA’s in wind and solar projects across the country to offset the energy demands of its data centres. Microsoft aims to be carbon-negative by 2030, while Meta and Google have pledged to power their global operations with 100% renewable energy.
This shift aligns with Ireland’s Climate Action Plan 2024 , which mandates renewable energy use and commits the country to be net-zero by 2025. Garry Connolly, CEO of Host in Ireland, stressed the importance of sustainable power solutions for the future of Ireland’s data centre industry, urging stakeholders to prioritise long-term sustainability.
Future Directions: Innovation and Collaboration
The Data Centres Ireland conference provides a timely platform for stakeholders—including Government officials, industry leaders, and community representatives—to discuss the path forward. Collaboration between the private sector, Government, and communities will be key to ensuring that Ireland remains a competitive and sustainable destination for data centres.
As Ireland navigates these challenges, its forward-looking approach to data centre growth has already proven beneficial, as evidenced by substantial investments from global tech leaders. Data centres continue to be a cornerstone of Ireland’s economic growth and FDI strategy, enabling the country to maintain a pivotal role in the global digital economy. Through continued innovation, Government support, and a commitment to sustainability, Ireland is well-positioned to remain an attractive location for data centres and to serve as a model for sustainable data infrastructure in Europe.