A new report has revealed that datacentres in Ireland consumed 22% of the nation's electricity in 2023, surpassing the combined usage of all urban homes. This surge in energy demand has resulted in a cumulative increase of €360 on average household electricity bills between 2015 and 2023, effectively imposing a 'hidden datacentre tax' on Irish consumers.
Study highlights economic drain
The report, commissioned by Friends of the Earth Ireland and Beyond Fossil Fuels, estimates that datacentres have drained €715 million (£620 million) from the Irish economy. It argues that households are subsidising big tech through inflated electricity prices. Jill McArdle of Beyond Fossil Fuels warned that Europe should learn from Ireland's experience, cautioning that unchecked datacentre expansion could drive up energy costs across the continent.
Impact on electricity pricing
Seán Fearon, the report's author and a postdoctoral researcher at the Autonomous University of Barcelona, explained that datacentres' high and inflexible electricity demand increases reliance on gas-fired power, which raises costs. He noted that during energy shocks, this effect becomes more pronounced, amplifying price spikes. Fearon projected that Irish households could face an additional €295 to €644 cumulatively from 2025 to 2034, depending on datacentre growth.
Industry defends its role
Datacentre representatives contested the findings, emphasising the sector's economic contributions. Maurice Mortell of Digital Infrastructure Ireland highlighted that investors have injected €18 billion into the country in recent years. Tom Parlon of the Irish Data Centre Supplier Alliance argued that datacentres pay grid charges and commercial electricity costs proportional to their usage, and must meet 80% of energy needs from additional renewable capacity—the strictest regime in Europe. He added that datacentres contribute significantly to Ireland's corporate tax revenues, which fund infrastructure and climate programmes.
Government stance and European implications
The Irish government has broadly supported datacentre expansion, describing them as 'a core enabler of our technology-rich innovation economy' and denying any hidden tax on consumers. However, the report's authors urge the European Commission to strengthen safeguards, especially as AI drives further datacentre proliferation across Europe. McArdle noted that even former US President Donald Trump has acknowledged that big tech should cover its own energy costs. Without requirements for additional renewable energy, she warned, datacentres could lock Europe into volatile and expensive fossil gas.
