Grange Castle International Business Park, on the Nangor Road, to the west of the M50 between the Red Cow and the Palmerstown junctions, may be home to a significant proportion of the data that is key to Europe’s digital economy.
Just inside the entrance is a large facility that is identified as belonging to Pfizer, the pharmaceutical multinational, but when you drive in further you come upon a series of enormous, mostly grey, windowless structures, surrounded by fences, devoid of any signs that would tell you who these buildings belong to, or what happens inside them. Controversy, and security concerns, no doubt explain this.
The growth of energy-hungry data centres has been such that they are now estimated to consume close to 20 per cent of the power on the Irish electricity grid, an extraordinary number that may grow over the coming decade to thirty per cent, says Friends of the Earth Ireland.
“We have about 80 data centres in Ireland, and I have read that they host 25 to 30 per cent of all European data,” says Colin Doyle, a retired scientist from Co Clare. Data centres are a serious impediment to Ireland meeting it carbon emission targets, Doyle says, because they are coming on stream at a faster rate than sources of renewable energy. “We are running to stay still.”
“Microsoft, Google, Amazon, Equinix, Digital Realty, CyrusOne, they’re all there [in Grange Castle],” says a senior figure with an Irish company that builds data centres, who did not want to speak on the record. Equinix and Digital Realty are US public companies that specialise in operating data centres and offering services to clients. CyrusOne is based in Texas and is owned by a number of funds.
“Grange Castle was originally built by South Dublin County Council and the IDA, to bring jobs to South Dublin,” he says. “Then the data centres went in and took over. So what happened wasn’t really what they had in mind.” Demand in Ireland and across Europe for new data centres was “high exponential” until recently, but developments in artificial intelligence “are driving it off the charts.”
The three big players in the data centre sector globally are Amazon, Microsoft and Google, with Google being a distance behind the other two. Businesses such as Equinix and Digital Realty are called enterprise data centres (EDCs) and as well as leasing data services to clients such as banks, airlines, and media companies, they build and lease data centres to the big three service providers. The construction source argues that the huge demand from data centres for clean energy is helping drive the wind energy sector in Ireland, because it assists in the sourcing of finance.
The former chief executive of the IDA, Martin Shanahan, who is now a partner with Grant Thornton, disputes that suggestion that data centres do not make a significant contribution to the Irish economy.
“Data Centres are an integral part of the ecosystem that supports a vibrant technology sector in Ireland,” he says. “Aside from the direct significant capital investment, the construction jobs, the operating jobs and spill-over effect within the economy (including building an international capability among the Irish construction & facilities sector) from data centres, the more important clustering effect, where tech multinationals have collocated significant functions, underpins the technology sector in Ireland.”
Mohammad Saffari, an assistant professor at Dublin City University and a specialist in sustainable buildings and energy systems, says Ireland is an ideal location for data centres because its climate helps with cooling and there is such great potential for renewable energy sources.
“Ireland is a tech hub in Europe so it makes sense that they would build this infrastructure here,” he says. New technologies to help store the energy created by sources such as wind will help us address the carbon issue challenge, he says. The whole point of engineering and innovation is to “convert problems into opportunities, to look for problems solve them and create opportunities.”
Doyle submitted an objection to a planning permission application from Amazon for three new data centres on its campus near Mulhuddart, Co Dublin, but Fingal County Council gave the project the go-ahead. The US multinational says the project will be “emissions neutral” because of the contribution three wind farms in countries Cork, Galway and Donegal will be making to the Irish grid, but Doyle argued against this, saying the wind farms, because they took years to get to the stage they are now at, are not providing additional renewable energy that will compensate for the data centres’s energy consumption.
“The problem is definitely timing. I think by 2040 we will have more renewable energy than we could possibly use and we will be relying on interconnections to the European grid to get rid of this energy to sell it into Europe.” Until then, however, there is a problem, he says.
Entrepreneur and Irish Times columnist Chris Horn agrees. “If we had the renewables, particularly the offshore wind, then perhaps we could support all of these data centres, but the timing is wrong.”
But Shanahan says the current mismatch between supply and demand for energy is an imbalance that should be short-term if addressed appropriately. “In the medium to long term, Ireland possesses a significant opportunity to realise the benefits of renewable energy and particularly offshore wind energy.”
Many of the wind projects that are or will be supplying energy to the data centres and the electricity grid generally are fronted by Irish operators, including Bord na Móna, ESB, and Coillte, says Doyle, but because of the huge amount of capital investment involved, much of the profit will go to the international funds and financial institutions that are financing the projects. “That will be particularly the case with offshore wind. They are very expensive projects and only investors with deep pockets have the money to do it.”
Amazon Web Services, the data centre arm of the US multinational, invested more than €2 billion in Ireland over the decade to 2021, according to a report submitted to Dublin City Council that year seeking permission to build new centres in Dublin. The application was made by Amazon Data Services Ltd, an Irish registered company that had a turnover of €4.8 billion in 2022, up from €3.6 billion the previous year, but only recorded a pretax profit of €61 million. It paid corporation tax of €25 million and during the year received a capital contribution from an Amazon company in Luxembourg of €2.7 billion.
Lettermuckroo Windfarm Holdings
Michael Murnane (66) is a renewable energy entrepreneur from Macroom, Co Cork, who has been associated with a number of wind farm projects over the years, including the three associated with the new Amazon data centres planned for Dublin. The three wind farms are in Ardeeroo, Co Galway, Meenbog, Co Donegal, and Esk, Co Cork, and were developed by Ardderroo Wind Farm Ltd, of Lissarda, Co Cork. Ardderoo is owned by Lettermuckroo Windfarm Holdings, also of Lissarda, and company filings show it has loans from Norddeutsche Landesbank Girozentrale, one of the largest commercial banks in Germany. Murnane and his business partners sold a majority stake in their wind farm assets six years ago for €300 million.
Winthrop Technologies Holdings Ltd, which is majority-owned by Irish businessman Barry English, had a turnover of €1 billion to the end of April 2023, and produced a profit before tax of €32.7 million, according to its latest accounts. The group decided a number of years ago to focus solely on data centres and has seen turnover grow rapidly due to projects in Ireland and across Europe.
“The principal activity of the group continues to be the provision of turnkey data centre delivery services throughout Europe,” according to the accounts. “The directors expect to see continued strong growth in future years.” The group employed more than 600 staff that year.
Collen Construction
Collen Construction, which has its head office in East Wall, Dublin, is the largest data centre general contractor in Ireland, according to its website. Controlled by director Noel Collen, the group, which is not solely focused on the data centre sector, paid a dividend of €2 million in 2022, and €5.5 million the previous year, according to the latest available accounts.
Mercury Engineering, set up in the 1970s by the late Frank O’Kane and his business partner, Joe Morgan, had a turnover of €1.48 billion in 2021, up from €1 billion the previous year, according to the latest consolidated accounts for Mercury Holdings.
Work on data centres is a significant part of the group’s operations and, according to its website, it has worked on projects for the world’s largest data centre operators, including on a “hyperscale” data centre project in Ireland for a client which it does not name.
Meta/Facebook
Runways Information Services Ltd, with a registered office in Clonee, Co Meath, is the Meta/Facebook company that operates the data centre campus there. Turnover in 2021 was €524 million, according to its latest filed accounts, and arose from inter group data hosting services. The company had an average of 104 employees during the year, and total payroll costs were €18 million. The value of its assets at year end was €3.6 billion, with just under one billion of that comprising assets under construction.
In 2016 Facebook announced that it had signed an agreement with Brookfield Renewable, then the owner of a portfolio of wind farms in Ireland, so that its Irish data centres would be 100 per cent powered by renewable energy. (Wind farms do not usually directly power data centres. They feed electricity into the grid from which the data centre takes its electricity.)
Brookfield Renewable is a publicly trade Canadian limited partnership. In 2021 the Danish renewable energy plc, Orsted, announced it was buying Brookfield’s Irish and UK onshore wind business, at a price based on a valuation of €571 million. The Orsted website shows it has 20 operational wind farms in the Republic, and seven under development.
TikTok Technology Ltd is the Dublin-based European headquarter operation of the Chinese social media giant, TikTok. The company has recently opened a data centre close to the M50 in South Dublin, where it will store all of its data from its European Economic Area and UK users. The opening of the data centre operation is reportedly designed to, among other matters, reassure people concerned about Chinese government access to European user data.
According to reports, the TikTok operation is based in a data centre developed by Sandyford-based Echelon, an Irish company founded by Niall Molloy and others in 2017.
Echelon is involved in several data centre projects in Ireland, including one in Arklow, Co Wicklow, that will include a substation that will draw power from an offshore wind bank. In 2020, when Echelon announced the deal with green energy provider SSE Renewables, it was praised by the then Taoiseach, Micheál Martin.
“This collaboration between renewable energy and tech will ensure that key decarbonisation targets contained in the Climate Action Plan are met and is a model which could be rolled out in other communities across the country,” he said.
