Context · why they came
Why are there so many data centres in Ireland?
Data centres came because the US tech firms that run them already had their European headquarters in Ireland, and because until the 2021 rules EirGrid handled their grid connections first come, first served. Official reviews also cite the mild climate, subsea cables, EU membership and tax. Cheap power was not a reason: Ireland had the dearest wholesale electricity of 9 northern European markets in 2025 (Ember).
Updated 12 October 2026 · data build 2026-10-10 · how we know · corrections
How far ahead: data centres use 23.2% of Ireland's electricity, against 3% across Europe
Ireland is ahead in share, not in size. Dublin's data centres drew 738 MW, behind London and Amsterdam but ahead of Paris and Frankfurt; Virginia, the largest hub in that comparison, drew 4,694 MW, over six times Dublin (Oireachtas Library, Data centres and energy, 23 Jul 2024, citing Cushman & Wakefield and Goldman Sachs). One of Europe's five big hubs, sitting on a small national grid, gives the highest share in Europe.
Ireland 2025: CSO, measured. Other countries and Ireland 2024: Ember, Grids for data centres in Europe, Jun 2025, estimates from ICIS data. United States: US DOE / LBNL, Dec 2024. Different estimators and years, so read the gaps, not the decimals. More on Europe's data-centre capacity.
Why they came: eight reasons in the official record
| Reason | What the record says | Source |
|---|---|---|
| The tech firms were already here | KPMG lists "the presence of major technology companies" among the drivers of the first data-centre investment. In 2018 the Government counted 16 of the top 20 software companies and 9 of the top 10 US tech companies based in Ireland. KPMG says having a headquarters and data centres in the same country makes the investment "sticky", and the firms already here give other operators a customer base. | Government Statement on the Role of Data Centres, 7 Jun 2018 · KPMG for DETE, The value of data centres to Ireland, 2 Jun 2026 |
| A mild climate | Ireland had the lowest number of cooling degree days in the EU, so it barely needs air-conditioning. Microsoft says its Dublin sites use water for cooling less than 5% of the time; outside air does the rest. This matters less for new AI halls, which are cooled by liquid. | Oireachtas Library, Data centres and energy, 23 Jul 2024 · Microsoft On the Issues, 24 Jun 2026 |
| Cables and networks | Nine subsea cables run to Britain, with direct links to the US. INEX, the internet exchange where networks swap traffic, was founded in 1996 and has 128 members. KPMG describes a self-reinforcing cycle: each new data centre adds connections, which draws in the next. Since Brexit there is no direct cable to mainland Europe. | PwC for the Department of the Environment, Climate and Communications, May 2024 · INEX, Oct 2026 · KPMG for DETE, The value of data centres to Ireland, 2 Jun 2026 |
| Inside the EU | The 2018 statement lists access to the EU Single Market and a strong data-protection regime. It notes that after Brexit, data centres outside the EU fall outside EU rules such as GDPR. Every other EU member state now offers the same. | Government Statement on the Role of Data Centres, 7 Jun 2018 |
| Grid connections, first come, first served | Until the rules tightened, EirGrid processed data-centre connection requests "first come first served" (its 2019 and 2020 policies). About 2 GW was contracted, mostly in Dublin, before the November 2021 rules. | EirGrid, Data Centre Connection Offer Process and Policy, 12 Jun 2019 and 17 Jul 2020 |
| The Government said yes | The 2018 statement said it was "Government policy and in the national interest" to deliver data centres "in the most efficient and timely way possible" (p15). IDA Ireland identified sites, and fast-track planning was promised (still not in force in July 2024, per the Oireachtas Library). | Government Statement on the Role of Data Centres, 7 Jun 2018 · Oireachtas Library, Data centres and energy, 23 Jul 2024 |
| Tax and the business climate | Both the 2018 statement ("a competitive and transparent corporation tax regime") and the Oireachtas Library ("economic/taxation factors") list tax. No public figure shows how much corporation tax data centres themselves pay, so the effect runs mainly through the headquarters. | Government Statement on the Role of Data Centres, 7 Jun 2018 · Oireachtas Library, Data centres and energy, 23 Jul 2024 · Oireachtas Library, The future of data centres in Ireland, 20 Mar 2025 |
| Clustering | The Oireachtas Library says the "clustering effect is significant": hyperscalers build their own sites and smaller operators lease space next to them. Firms that build, maintain, power and service data centres grew up around them. | Oireachtas Library, Data centres and energy, 23 Jul 2024 |
The Oireachtas Library lists its reasons "in no particular order", and no source weighs one against another. These are the reasons given in Government, Oireachtas, EirGrid and KPMG documents, read from the documents themselves.
Not cheap power: Ireland had the dearest wholesale electricity of these markets in 2025
Average day-ahead baseload price, €/MWh, 2025. Ember, European wholesale electricity price data, Oct 2026. What the largest industrial users actually paid (over 150 GWh a year, before VAT): Ireland €0.1654/kWh in 2026-S1, the second-highest of 13 countries (Eurostat nrg_pc_205, Oct 2026). Why Irish power costs more: the explainer.
Whose demand they serve: mostly not Ireland's
- Built for global cloud services. Computer-service exports are "routed through" data centres in Ireland, and KPMG estimates that 36% of core operations in the ICT services sector depend on data centres here (KPMG for DETE, 2 Jun 2026).
- The grid operator asked if that was in the public interest. In May 2021 EirGrid told the regulator the case for serving global demand needed a "wider national debate as to that which is in the public interest" (EirGrid letter, Appendix 3 of CRU/21/124, p47).
- Built before the AI boom. Ireland's sites were built mainly for cloud and social media. No Irish body publishes what share of their electricity now goes to AI. The claim that they are mostly running AI, checked.
When they came, and when the door closed
- Three waves. Microsoft and Digital Realty led a first wave in west Dublin, with permissions from 2007 to 2013. 15 data-centre buildings were finished in 2014–2021, and 19 since 2022, 16 of them on permissions from before the November 2021 rules. Every building, year by year.
- The open door closed on security of supply, not climate. Planned power stations failed to arrive, older ones were closing, and data-centre requests kept rising. EirGrid's May 2021 letter led to the CRU's November 2021 direction, after which only one new data centre won a grid contract by mid-2025. How the de facto moratorium happened, and ended.
- The same advantages, without the grid. AWS told a Government taskforce that the "de facto moratorium" made it move "a significant level of planned investment to Spain" (Accelerating Renewable Electricity Taskforce minutes, 25 May 2026, p5). New sites now have to bring their own power under the CRU's December 2025 rules.
Questions people ask
- Did Ireland's low corporation tax bring the data centres?
- Tax is on every official list of reasons: the 2018 Government Statement cites 'a competitive and transparent corporation tax regime' and the Oireachtas Library 'economic/taxation factors'. But no public figure shows the corporation tax data centres themselves pay (Oireachtas Library, March 2025). Tax mainly drew the headquarters, and KPMG (2026) says headquarters and data centres in one country make the investment 'sticky'.
- Is Dublin the biggest data-centre hub in Europe?
- No. The Oireachtas Library (July 2024, citing Cushman & Wakefield and Goldman Sachs) put Dublin at 738 MW, behind London and Amsterdam but ahead of Paris and Frankfurt. Virginia, the largest hub in that comparison, was over six times Dublin. Ireland stands out because one of Europe's big hubs sits on a small national grid.