The Government is to make it easier for large energy users such as data centres to power themselves independently under a new policy to be published next month.
The impact of demand from data centres on the electrical power system has become a significant policy hurdle in recent years, with the secretary general of the Department of Energy most recently indicating that the State faced a stark choice between providing energy for housing or for data centres.
The Government has rejected this contention, though Minister for Energy Darragh O’Brien is to publish next month a new policy on so-called “private wires” that will expand the rights of private operators to build and operate electricity infrastructure, including between power sources and data centres.
When the new policy is put in place, it will represent a departure from the current practice where in almost all circumstances the ESB, the commercial semistate company, has an exclusive legal right to own such infrastructure.
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The Government believes the reforms will enable private investment into such infrastructure and free up grid capacity for housing or other sectors of the economy. Coalition figures argued it would also bring new flexibility for small businesses and households.
A spokeswoman for Mr O’Brien confirmed a national policy statement will be published in July and that the Government would then make necessary legislative and regulatory changes.
“The private wires policy will unlock private sector resources to build new electricity infrastructure by expanding the rights of private undertakings to connect supply directly with demand,” she said.
She said that the Coalition believed it would support Irish companies to compete globally and attract more inward investment.
The Programme for Government, which guides policymaking, contained a commitment to expedite the publication of the policy.
It is expected that primary legislation and updated regulations will be needed to give effect to the policy, which is also thought to entail significant additional work for the Commission for Regulation of Utilities, the regulator responsible for permitting such wires. Its legal powers and resources will also be beefed up.
The policy is expected to allow for the construction and operation of private wires in several specific scenarios when it is determined that allowing private investment in an electricity line is the most efficient approach to a new connection and in the public interest.
These will include private electricity lines from a generator to a consumer – such as from a power plant to a data centre – and hybrid connections where two facilities, such as a solar farm and wind farm, could share a single grid connection.
There will also be changes to legislation to allow for lines to be run in public or shared spaces to allow on-street charging.
It will also allow for the expansion of self-supply and will clarify that connection between two separate firms is allowed.
It is understood that Taoiseach Micheál Martin is pushing for the policy to be fast-tracked.
However, industry sources said that even with moves on private wires, Ireland had become a less attractive destination for data centres due to wider constraints on the energy system and the scale of resources needed by the facilities involved in processing artificial intelligence-related work.
The construction of new data centres has been held back in recent years, especially around Dublin where the electricity grid is close to capacity.
Last year, the Department of Energy, then led by former Green Party leader Eamon Ryan, published a set of guiding principles that hinted at how energy infrastructure might change, but made no immediate changes to policy.
