A report from the International Energy Agency (IEA) forecasts that almost one-third of electricity demand in Ireland is expected to come from data-centres by 2026.
Doubling Of Electricity Demand
The IEA’s ‘Electricity 2024 – Analysis and forecast to 2026’ highlights how having one of the lowest corporate tax rates in the EU (12.5 per cent) is a key reason why Ireland now has 82 data-centres. However, the fact that data-centres require enormous amounts of energy has meant that, even back in 2022, electricity demand from data-centres in Ireland represented a massive 17 per cent of the country’s total electricity consumption.
The expansion of the data-centre sector, driven by factors like AI, cryptocurrencies, demand for more compute capacity and their associated elevated electricity demand has led to the IEA’s forecast that the electricity demand in Ireland from data-centres will double to 32 per cent of the country’s total electricity demand by next year!
As may be expected with a doubling of demand, the report warns that the reliability and stability of Ireland’s electricity system will be challenged.
The IEA reports that in order to safeguard Ireland’s electricity system, in 2021 the country’s Commission for Regulation of Utilities had published requirements applicable to new and ongoing data-centre grid connection applications. These included looking at whether a data-centre is within a constrained region of the electricity system, and the ability of the data-centre to bring onsite dispatchable generation and/or storage equivalent, at least, to their demand. The requirements also included looking at the ability of the data-centre to provide flexibility in their demand by reducing it when requested by a system operator.
This highlights the need by local governments in Ireland to only grant connections to operators who can make efficient usage of the grid and incorporate renewable energy sources with a view that incorporates decarbonisation targets.
Looking at the global data-centre sector, there are more than 8000 data-centres, with about one-third of these in the US, 16 per cent in Europe and around 10 per cent in China. The 1,240 datacentres in Europe (mostly in Frankfurt, London, Amsterdam, Paris, and Dublin) consume 4 per cent of the EU’s total electricity demand. The IEA forecasts that with increasing demand, electricity consumption in the data-centre sector in the EU will reach almost 150 TWh by 2026.
What Can Be Done To Moderate Data-Centre Electricity Demand?
Measures that could be taken to moderate the IEA’s projected surge in the amount of energy data-centres consume could include:
– Introducing more energy-efficient data-centre cooling mechanisms, e.g. direct-to-chip water cooling systems and liquid cooling systems.
– Data-centres sourcing their power from renewable sources like solar, wind, and hydro. For example, the IEA report highlights a global trend toward clean electricity sources, with renewables set to cover a substantial part of the additional electricity demand.
– Data-Centres participating in demand response programs to adjust their power consumption during peak periods, helping to balance the grid.
– Integrating data-centres more closely with the energy grid to optimise power distribution and reduce waste.
– Governments encouraging or mandating the use of renewable energy and energy-efficient technologies in data-centres through incentives, subsidies, or regulations that set minimum energy efficiency standards.
– Investment in energy storage and grid infrastructure to ensure reliability and the integration of intermittent renewable energy sources.
– Ongoing research into more energy-efficient computing technologies, like advanced chip designs or quantum computing, can reduce the energy footprint of data-centres over time.
Needed, And Part Of The Solution
It should be remembered, however, that data-centre services are now critical to the daily functioning of the business, consumer, and economic landscape because they add value, and they are enabling the growth of new technologies like AI. It could therefore be argued that more data-centres and the value and compute power they bring could deliver key solutions to solve the energy and climate challenges. In doing so, they could also find ways to generate more energy than they consume, thereby reducing their demand on the grid, and becoming part of the solution to their own problems.
What Does This Mean For Your Organisation?
Factors like the growth of cloud computing, which has helped businesses, the demand for compute capacity, the growth of AI and cryptocurrency, are all contributors to a rapidly growing demand for more electricity and threats to current supply systems (such as Ireland’s).
That said, as shown above, safeguarding and mitigating measures can (and must) be taken. Also, multiple data-centres being sited in countries like Ireland can be a boost to their economy and their standing within the tech-world. Although an electricity demand surge in the growing data-centre sector is inevitable now, technologies such as AI (which increases energy demand from data-centres) may help find intelligent ways to mitigate the extra demand issues it creates and it would be difficult to argue that the world doesn’t need more data-centres to drive forward vital technologies for business and economies.
Nevertheless, there is a need for sustainable action. For example, using cleaner energy and governments working together with industry, combining their technologies and innovations could be the way forward to supporting the energy, economic, and technological outlook.