Ireland tightens regulation of data centre grid connections

Out-Law News | 29 Nov 2021 | 11:52 am | 1 min. read

More data centres are likely to be developed in rural Ireland and with their own on-site power supply after a regulator intervened to tighten conditions on data centre connections to the country’s electricity grid, according to an expert.

The Commission for Regulation of Utilities (CRU) said it is concerned that “continuing to allow data centres to connect to the electricity network in accordance with current arrangements” would present a risk to the security of electricity supply in Ireland. While the CRU has, for now, rejected the option of imposing a moratorium on data centre grid connections to address this risk, it has provided the operators of Ireland’s electricity grid, EirGrid and ESBN, with greater scope to refuse applications for grid connections made by data centre developers.

Monaghan Garrett

Garrett Monaghan

Partner

With their own environmental and ESG targets, this direction should be pushing at an open door for data centres to bring forward positive solutions in terms of their own low carbon generation and reducing consumption when that is required  

Under directions set by the CRU, EirGrid and ESBN will be required to assess data centre grid connection applications against set criteria “to determine whether a connection offer can be made within the system stability and reliability needs of the electricity network”.

Where a data centre is located, and whether that location is “within a constrained or unconstrained region of the electricity system”, is one of the relevant criteria for assessment.

The ability of data centre developers to access onsite power generation, or storage, that is at least equal to their power demands is a further factor EirGrid and ESBN can consider.

Whether the data centre’s energy consumption can be reduced in times of system constraint can also be factored into assessments of applications for grid connections from data centre developers.

“EirGrid and ESBN have freedom to consider the assessment criteria when determining whether to issue a connection or not,” Monaghan said. “That is because the CRU has decided against ranking the criteria in order of priority, as it had hinted it might do in its initial proposals earlier this year.”

Monaghan said the CRU’s directions are likely to influence investment in new data centres in Ireland, and that there is an opportunity to grow on-site power generation and storage at data centre sites in a way that supports the country’s transition to a greener energy system in line with the broader decarbonisation agenda.

“This direction clearly signals to data centres that they must be part of the energy solution in Ireland, not the problem,” Monaghan said. “Locating away from areas of high demand and constrained supply will undoubtedly be important for continued data centre growth in Ireland. With their own environmental and ESG targets, this direction should be pushing at an open door for data centres to bring forward positive solutions in terms of their own low carbon generation and reducing consumption when that is required.”