Ireland to Allow Data Centers to Link Up to Fossil Fuel Plants
(Bloomberg) -- Ireland is set to green-light policies that allow data centers to use fossil fuels to power their operations, a shift that highlights the tension between economic growth and climate goals.
Developers have been lacking official guidance about how they could enact a February proposal by the regulator that would effectively give way to computing hubs to generate their own power using fossil fuels. One way that will be permitted is for investors to build a cable linking to stations burning natural gas for a time-limited period and in exceptional cases only, according to a person familiar with the government’s thinking.
The temporary provision for so-called private wires will be allowed under the government’s own policy proposal published in July. The published draft didn’t give detail on whether fossil fuels would be an acceptable option.
The purpose of the private wire policy is to accelerate the roll-out of renewables and energy storage, said a spokesperson for the Department of Climate, Energy and the Environment.
Data center demand is pushing Europe’s grid capacity to its limit everywhere from Spain to the UK. Ireland is by far the most mature market for the sector and its electricity grid is under strain. Much needed upgrades were held up in the planning system and investment lagged in the aftermath of the global financial crash.
“There are few firm concrete plans to show how we can achieve those two twin objectives of being a leader in climate and a leader in AI and data centers,” Paul Deane, senior energy lecturer at University College Cork, said. “Something has to give.”
The regulator’s policy hasn’t been finalized yet, but is expected to be published soon. The private wires policy needs to be legislated, which could take until the end of next year as the government works to alleviate some of the power constraints facing Ireland.
In March, the Irish government approved plans to develop an emergency liquefied natural gas facility to boost energy security, in another sign that climate goals are becoming increasingly hard to reconcile with other national priorities.
It’s not just Ireland. The European Union is facing push back from member states on its 2040 climate goals amid increasing concerns about its impact on industries and households.
Fossil fuels usage for private wires is likely to be a temporary stopgap.
“I suspect as policy becomes more stringent, grid constraints in the Dublin area are alleviated, and barriers to renewable growth are lifted that there would be a stronger push towards renewable power purchase agreements,” said Steph Unsworth, Research Senior Associate at Aurora Energy Research.
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