The cost of data centre growth in Ireland: Households paid an estimated €715 million more in electricity bills

Our new report reveals the real cost borne by ordinary people in Ireland due to data centres’ rapid expansion in the country.

Households in Ireland paid an estimated €715 million more in electricity bills between 2015 and 2023 due to the rapid expansion of data centres in the country, our new report reveals. [1]

Unless Government policy changes, the cost on households could intensify dramatically between 2025 and 2034, with households set to face an additional €1.43 billion in electricity bills linked to data centre growth. [2]

Friends of the Earth Ireland published the report ‘The cost of data centres: Modelling the impact of data centres on electricity bills for Irish households’ today in conjunction with Beyond Fossil Fuels. Dr Seán Fearon, an ecological economist and postdoctoral researcher at the Institute of Environmental Science and Technology at the Autonomous University of Barcelona (ICTA-UAB), is the author. His research focuses on postgrowth modelling and policy for decent living and wellbeing within ecological limits.

Our report’s findings are stark - high data centre energy demand in Ireland, combined with dependence on fossil gas for electricity, is creating additional costs for households. The high, growing, and inflexible nature of data centres’ electricity demand means that data centres are forcing us onto fossil gas more often, increasing the hours that gas sets the energy price. This drives up household electricity bills. [3]

The damning findings don’t end here. Future energy shocks - similar to those in the wake of Russia’s invasion of Ukraine and the US-Israel attacks on Iran - could drive the additional costs associated with data centre demand to as much as €1.6 billion over the next decade. During the last energy crisis, the poorest households in Ireland paid an extra €209 on electricity bills between 2021 and 2023 due to data centre growth. This in effect wrote off the social welfare increase that these housholds received in 2022. These are people who were already grappling to keep up with extortionate bills. 

This is the first report to empirically assess and model the cost borne by Irish households because of rapid data centre growth between 2015-2023, whilst also estimating future costs in a range of probable scenarios. All of these scenarios are plausible and based on Ireland’s national energy grid EirGrid’s projections of how much electricity data centres, who already have contracts, could use. It models and quantifies the interaction effect between Ireland’s data centre demand profile and a dependence on fossil gas-fired power on wholesale electricity prices. [4]

It’s important to understand the report’s findings against the backdrop of the staggering extent of current and planned data centre expansion in Ireland. On a per capita basis, data centres in Ireland consume a larger share of national electricity demand than in any other reported country. Ireland is currently home to approximately 121 data centres with numerous others are at various stages of the planning and construction processes – and the build out is projected to have a colossal impact on Ireland’s electricity use. 

Data centres currently consume more than 22% of electricity in Ireland and this is projected to rise to 30% by 2030. By far, the biggest demand on our electricity system right now is from data centres, with their energy use growing by 531% between 2015 to 2024. What is more, data centres are also gobbling up more electricity than all of Ireland’s urban homes combined. 

The report also comes as the European Commission looks to triple data centre capacity in the next five to seven years, in a market so far largely dominated by US Big Tech companies. 

‘Data centre tax’ on household electricity bills

What our report reveals is that ordinary people in Ireland have effectively been paying a hidden data centre tax on their electricity bills, with hundreds of millions of euros drained from household income over the past decade—and this is likely to balloon to more than a billion over the next decade. 

Households are looking at paying as much as €1.6 billion more in electricity bills between 2025 and 2034 due to data centre demand unless Government policies change. This is a significant amount of household income that could otherwise be spent on essential needs like food, housing, childcare, retrofitting, transport etc. Instead, households are subsidising an energy-guzzling industry dominated by some of the wealthiest tech corporations in the world.

The €1.6 billion that data centre growth in Ireland will likely drain from households through higher electricity bills is equivalent to more than four times the amount allocated by the Government in Budget 2026 to provide fully funded upgrades for those in energy poverty. Contextualising it this way helps to better grasp the stark extent of the price that ordinary people will continue to pay for data centre expansion in Ireland. 

Deepening dependence on fossil gas 

The triple whammy of high and rapidly increasing data centre energy demand, dependence on fossil gas, and the extraordinary volatility of fossil fuel pricing results in ordinary people in Ireland being left even more exposed to higher electricity bills. 

In addition to adding hundreds of millions of euros to households’ electricity bills, our report also finds that rapid data centre expansion in Ireland is deepening Ireland’s fossil fuel dependence, exposing ordinary people to volatile international energy prices. In 2022, amid the energy crisis triggered by Russia’s invasion of Ukraine, data centre growth in Ireland meant households paid 8.5% more in electricity bills, our report found. 

Ireland is one of most gas-reliant countries in the EU to produce electricity—this reliance also means the price of fossil gas is the key determinant of electricity prices in Ireland. Ireland’s reliance on imported oil and gas means that our energy bills are affected by every instance of war, political instability and price shocks. We’re already seeing ordinary people paying the price for Ireland’s existing reliance on imported fossil fuels with energy bills soaring in the wake of the US-Israel attack on Iran. What we need is real energy independence, powered by renewables, which will bring down our energy bills - not a further dependence on dirty, expensive fossil fuels brought about by data centre expansion. 

What about renewables?

While more ambitious expansion of renewables capacity in the future can reduce the scale of these impacts, in most scenarios modelled in the report, it’s not sufficient to meaningfully offset the electricity price increases associated with data centre growth. This is because of the projected rises in data centre energy demand over the next decade. Furthermore, the rapid growth of data centres, consuming almost all new renewables capacity in recent years [5], has reinforced a dependence on fossil gas power. 

Recent warning from the Climate Change Advisory Council, a Government appointed independent advisory body, echoes these findings - they said that data centres’ colossal energy demand is “cannibalising” renewable energy, slowing down electrification and clean energy for everyone else. 

Different Government policy choices can significantly reduce household costs 

The report’s findings raise serious questions about the Government’s current energy and industrial policy. This is especially because Ireland faces the highest household electricity prices in the EU, growing energy insecurity—and also as Ireland is set to miss its 2030 emissions-cut target by half. Besides, in addition to driving up wholesale electricity prices data centres are also fuelling Ireland’s dependence on fossil gas and undermining access to clean energy for everyone else.

However, all is not lost. An important finding of our report is that different Government policy choices can significantly change the estimated data centre price effect. Projections for the coming decade indicate that limiting data centre demand while accelerating renewable energy deployment could save the average Irish household an estimated hundreds of euros cumulatively between 2025 and 2034.

The scale of the data centre sector’s grip on Ireland’s energy system is not inevitable—it’s the result of political decisions. The Government must now introduce a moratorium on new data centres, place firm limits on the expansion of existing facilities, and prioritise the energy security and affordability needs of ordinary people over the interests of Big Tech.

Sign our petition calling on the Government to stop new data centres via a moratorium

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Blog by Nandana James, Communications Content Officer, with inputs from Rosi Leonard, Data Centre Campaign Lead. 

Notes:

1-This means that the average household in Ireland may have paid an additional €360 in electricity bills between 2015 and 2023 due to the intensity of data centre presence on the grid. 

2- For the average household in Ireland, this means that depending on the future scale of data centre expansion, they’re looking at paying between €295 and €644 extra on electricity bills between 2025 and 2034.  

3- As Dr Seán Fearon explains in the report, 

“When households consume power together at peak periods of the day, data centres’ demand profile acts as a rising floor, raising the level of peak demand on the grid higher, and more often, than it would otherwise be.

Considering merit order operations, this implies that the inflexibly high share of data centre power consumption means total demand in the Irish electricity market exceeds the availability of low-cost renewables more often, meaning gas sets prices more often. In more technical terms, data centres push Ireland’s demand profile further up the merit order curve at a given point in time, more often than a counterfactual scenario where no data centres were present on the island of Ireland.”

4- Note from Dr Seán Fearon: “This report is a modelling exercise. It does not claim to predict the future, and all results in the above sections are estimates. The purpose of any modelling is to use robust data inputs alongside conceptually sound underpinnings and interactions between variables, to reveal and quantify trends and relationships.”

5- https://www.friendsoftheearth.ie/publications/data-centrres-and-the-carbon-budgets-prof-hannah-daly-dec-20/