What the UK can learn from Ireland in powering data centres with renewable energy and battery storage

Jonathan Speers, Director at Daclour Maclaren, discusses Ireland’s rapid data centre build-out, what the UK can learn from its innovation around renewables and batteries, and a few cautionary tales.

Over the last two decades, Ireland, and Dublin more specifically, has been at the heart of the EU’s data centre boom. There have been other major players, particularly Germany, the Netherlands and the Nordic countries. However, Ireland has quietly become a world-leading hub for data centre construction expertise. 

That expertise has been shaped by Ireland’s exposure to major tech firms, such as Microsoft, Google, Apple and AWS. They were attracted to Ireland by low tax rates and access to the EU single market. But as the Irish data centre industry has grown, so has the strain on the national grid. That has led to the increasing use of renewable energy and battery storage to meet the colossal electricity demands. 

Compared to Ireland, growth in the UK has been steadier. High energy costs, planning complexities and infrastructural constraints have been significant hurdles. There is also a more fragmented market, with key data centre hubs in London and the South East, but slower growth elsewhere. 

Despite the challenges, increasing demand for cloud services, AI infrastructure and edge computing is starting to shift the landscape in the UK. The UK is now planning significant investment in new data centres, and it stands to learn a lot from the Irish approach to renewables and battery storage. But it will also benefit from a few cautionary tales. 

Renewable energy and battery storage lessons from Irish data centres 

Invest in renewable integration

Both Ireland and the UK have ambitious renewable energy targets and are actively increasing its integration. However, Ireland generates a greater proportion of its electricity from onshore wind than any other country in the world.

That benefits the country’s data centres by providing a reliable, cost-effective and sustainable power source. It also aligns with broader sustainability goals and enhances Ireland’s attractiveness as a hub for data centre investment. 

Secure a low-carbon energy supply with long-term Power Purchase Agreements

Large data centre operators in Ireland, including Amazon, Microsoft and Google, sign long-term Power Purchase Agreements (PPAs) directly with wind and solar farms. That provides them with a reliable supply of clean, fixed-cost energy. It also accelerates renewable project deployment and helps data centre operators achieve their green ambitions.

However, the PPA market has become increasingly volatile in recent years. Supply chain disruption, connection restrictions and stress on the national grid are prompting Irish data centre operators to switch to other strategies. That includes on-site power generation and connecting directly to renewable sources to bypass the grid. 

Integrate on-site power generation and microgrids

Increasingly, operators are incorporating on-site renewable power generation into their data centres. That gives them access to a reliable source of renewable energy while reducing demands on the grid.

As well as solar and wind farms, some data centres are investing in battery energy storage systems (BESS) to help them overcome the intermittent nature of renewables. By developing their own microgrids, they are increasing their resilience and reducing their reliance on fossil-fuel-powered backup generators.

Encourage grid-friendly load shifting and demand response

Irish data centres are also implementing load-shifting strategies to reduce the demand on the grid at peak times. Load shifting moves energy-intensive tasks to off-peak periods or times when renewable energy is abundant. 

Data centres are well-placed to provide that flexibility. They often have on-site energy assets and backup generators to deliver an alternative source of energy. They can also deploy the energy stored in batteries to help balance the grid in real time.

Develop an integrated national strategy  

Ireland’s concentration of data centres forced early engagement between operators, grid regulators and renewable developers. That led to coordinated infrastructure upgrades and renewable capacity planning. 

There is also a comprehensive framework of policies that guides the development and operation of data centres within the broader context of the national enterprise and energy strategies. That helps to align grid investment, planning approvals and renewable rollouts.  

Five lessons the UK can lift straight from Ireland 

The UK plans to increase its number of data centres by almost a fifth over the next five years. More than half of those are being built in London and the neighbouring counties, with a further nine in Wales and five in Greater Manchester. 

Understandably, there are concerns about the colossal amount of energy they will use. However, lifting these five concrete lessons from Ireland should stand them in good stead: 

1. Prioritise planning approval for projects that are co-located with large renewable energy plants and offer streamlined connection processes at these sites.
2. Adopt a national data energy strategy to align grid investment, renewable rollout and planning approvals to reduce localised grid stress.
3. Develop formal demand-response frameworks to handle large computing loads. That will ensure heavy workloads align with renewable generation peaks.
4. Promote the integration of battery energy storage systems at all new data centres by providing financial incentives and enabling operators to monetise energy storage by balancing the power grid.
5. Encourage corporate Power Purchase Agreements through potential tax incentives and clear regulatory guidance. The UK can also offer faster grid connection for PPA-backed projects. 

And a cautionary tale

While there are positive lessons the UK can learn from the Irish data centre boom, there are also some missteps it would do well to avoid. 

In 2023, data centres across the Republic of Ireland accounted for more than a fifth of the country’s entire metered electricity usage. That is putting immense pressure on the grid, which is struggling to keep up with demand. In particular, the concentration of data centres in and around Dublin has become problematic. 

In response to severe grid constraints, Ireland's energy regulators have effectively paused new data centre grid connections in the Greater Dublin Area. This de facto moratorium, introduced in 2021, is expected to remain in place until at least 2028. Only projects that meet strict requirements, such as providing their own power or demonstrating grid flexibility, will be considered for approval.  

That is a necessary step, but in many respects, it's policy without the planning. The result is planning bottlenecks, stalled investment and risks to its reputation as a digital hub. In many ways, Ireland is now behind the curve. 

Inevitably, this is having an impact on foreign direct investment, with some companies choosing other European countries for their data centre development. It is also prompting data centres to consider alternative solutions, such as building their own power lines that connect directly to renewable energy projects. 

Learning points for the UK

The current capacity issues in Ireland should serve as a warning sign for the UK and the rest of Europe.

• It underlines the importance of making data centres self-sufficient through the use of decentralised power systems.
• It also emphasises the importance of avoiding clustering data centres in one location to reduce the strain on the grid.
• And suggests planning consent should be conditional on data centres having on-site battery storage and providing demand-flex commitments.

How can we help?

At DM, we can support data centre projects from concept through to consent. With vast experience in complex energy integrations, we understand the planning, land rights and regulatory challenges that come with large-scale development.

Acting as a bridge between developers, landowners, regulators and local communities, we navigate complex planning and environmental regulations while streamlining stakeholder negotiations to reduce risk and minimise delays.

By bringing everything together under one experienced team, we deliver a process that’s faster, more cost-effective, and more resilient to change, so you can move from vision to approval with fewer obstacles.