Data Centres: A Strain on the Grid is a Strain on Your Wallet

How your electricity bills are being driven up while at the same time, as enormous stress on Ireland’s national electricity grid.

In December 2024, the Sustainable Energy Authority of Ireland (SEAI) issued a stark statistic: data centres are responsible for 88.2% of the increased electricity demand in Ireland since 2015. While these energy-hungry hubs might be powering Big Tech’s AI boom, they’re also inflating your electricity bills and placing enormous stress on Ireland’s national electricity grid.

A Grid Under Pressure

The Irish electricity grid has been under sustained pressure since at least 2021. One clear indicator is the rise in system alerts - warnings that grid operators issue when they fear supply might not meet demand. From 2010 to 2019, there were just 13 such alerts. Between December 2020 and October 2021 alone, there were 7. In 2022, the number jumped to 8.

This rising pressure correlates strongly with the explosion in data centre activity. These facilities require vast, constant amounts of energy to run and cool thousands of servers 24/7. It’s not just bad timing - the data boom is a core driver of Ireland’s electricity strain.

How Did the Situation Improve - On Paper?

EirGrid’s Winter Outlook for 2024/25 painted a more optimistic picture. It estimated "Loss of Load Expectation", which is essentially the number of hours that the electricity supply is expected to be insufficient to meet demand, at 3.6 hours over the winter period. This was down from 21 hours the previous winter and a staggering 51 hours the winter before that.

So, what changed? Did data centres suddenly become less energy-intensive? Not quite.

What actually happened was the rollout of Temporary Emergency Generation. These include:

• Emergency gas generators at North Wall and Huntstown (Dublin)
  
  
• Emergency oil generators at Tarbert (Kerry) and Shannonbridge (Offaly)
  
  

These generators are allowed to operate up to 500 hours a year, but between late 2023 and September 2024, they weren’t used at all. That might sound like a success, but in reality these systems are expensive insurance policies that we’re all paying for.

The Hidden Price of Reliability

Even if these emergency plants rarely run, the cost of building and maintaining them is staggering. EirGrid initially budgeted €480 million for emergency generation, but this quickly

ballooned to over €612 million. Industry insiders now estimate the real price tag is closer to €1.18 billion.

Why are we spending so much? As Independent TD Thomas Pringle pointed out when special legislation was introduced to allow the rapid installation of emergency power generators: “The truth is that the legislation is not being introduced to protect ordinary citizens. I believe the government’s real intention is to protect data centres.”

This is a classic case of privatised gain and socialised cost. The public is effectively footing the bill to keep Big Tech running smoothly.

The Capacity Market: Another Hidden Cost

It doesn’t stop with these temporary generators. Ireland operates a capacity market, where electricity providers are paid simply to be available to generate power when needed – not necessarily for the power they actually produce.

From 2007 to 2018, capacity payments averaged €454 million per year. Since then, they've nearly doubled, topping €1 billion annually between 2018 and 2024.

Worse still, a recent investigation revealed that three companies connected to data centre operations received or applied for €600 million in capacity payments, meaning that household electricity bills are effectively subsidising data centre developments by hundreds of millions of euro a year. One firm, Lumcloon Energy, received €364 million for building a gas power station, then submitted plans to build a €1 billion data centre nearby. Convenient, isn’t it?

PSO Levy: Unfair and Regressive

The Public Service Obligation (PSO) levy, another line item on your electricity bill, was reinstated in October 2024 and increased to €42 per household per year. The key point here is the fundamental unfairness in how the levy is structured.

It’s based on peak demand, not total energy use. Households make up 39.7% of peak demand but only about 28% of total consumption. Data centres, meanwhile, use a massive share of overall electricity but less of it at peak times, meaning they pay less proportionally.

Worse still, the PSO is a flat-rate charge, making it socially regressive. Low-income households pay the same as high-income ones, even though they use less electricity and are more vulnerable to price hikes.

Electricity Prices Keep Climbing

Data centres consume more than a fifth of Ireland’s total electricity. According to Daragh Cassidy from Bonkers.ie, this massive consumption pushes up demand, especially during peak times when the most expensive, least efficient gas-powered generators have to be fired up.

And while data centres are not the only factor behind rising prices, they are undoubtedly a major one. Add in Ireland’s dependence on imported fossil fuels, and the result is spiraling electricity costs for ordinary Irish households.

So, What Can We Do?

This isn’t just a technical or economic issue, it’s a political one. Should Irish households be subsidising the energy costs of multinational tech giants? Should the Government continue greenlighting more data centres when we already pay some of the highest electricity prices in Europe?

These are questions we all need to start asking. Talk to your friends. Talk to your family. Most importantly, talk to your TDs. The tech industry has the money and lobbyists, but we have the numbers.

If you believe data centre expansion should be paused until a fairer, more sustainable system is in place, join our campaign. Take our e-action today to let Government ministers know where you stand, and we’ll be in touch with more ways you can take action on data centres in the coming months. 

Because a strain on the grid is a strain on your wallet - and it’s time that changed.

 

 

Watch back Seán McLoughlin, Climate Policy Campaigner, talking about some of these price impacts on our recent Data Centre walking tour.