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23 November 2023
Distinguished guests, ladies and gentlemen, good afternoon.
Thank you for the warm welcome, Hugh Robinson [Managing Director, Stepex] and Amy Hopkinson [Conference Producer, Stepex] and for the invitation to speak at this conference this afternoon.
It is a great pleasure to be here today with so many representatives of the Irish data centre industry, including end-users, suppliers, consultants and those who contribute to the data centre market in Ireland.
This event, which is now in its 13th year, highlights how important data centres have become as core digital infrastructure for both Ireland and Europe’s digital economies and the indispensable role they play in our economy and society.
The impact of data-driven technologies in recent years is apparent all sectors of the economy. Technology is improving our daily lives by transforming healthcare and education, creating new business opportunities, granting easier access to government services as well as contributing to climate action.
As a small, open economy, Ireland has been hugely successful in attracting eight of the global top 10 information technology companies to establish a significant presence here. We are the second largest exporter of computer and IT services in the world.
Ireland has a strategic advantage in digitalisation with our rich ecosystem of indigenous and multinational technology companies. We must fully harness the incredible expertise that lies, within those companies and also in our academic institutions.
Our digital infrastructure is key to Ireland’s position as a strategic international location for IT services and plays a critical role in supporting many sectors in the Irish economy - in addition to supporting employment and foreign direct investment.
National Digital Strategy, 'Harnessing Digital'
To grasp the opportunities of digital and technology, the Government’s National Digital Strategy, ‘Harnessing Digital’, was published early last year and sets out a pathway to drive and enable the digital transition across society and the economy. It aims to improve the well-being of our people and businesses, maximise the productivity of our enterprise base and to improve the accessibility and efficiency of our public services.
Digitalisation is at the heart of Ireland’s enterprise policy and our ambition is for Ireland to remain a digital frontrunner, and a country right at the very heart of European and global developments.
Unlocking our digital potential will help us to stay ahead of the curve on innovation and productivity, and our digital strategy acknowledges the need to embrace the opportunities offered by digital technologies and allows us to futureproof our economy for the years ahead.
To grasp the opportunities of digital and technology in business, the National Digital Strategy has four key objectives:
- sustaining Ireland’s attractiveness as a location of choice for cutting edge global technology businesses
- driving a step change in digital adoption across enterprise
- nurturing digital start-ups and
- ensuring a modern, cohesive and well-resourced regulatory framework for digital
A first Progress Report was published in December 2022 and a second Progress Report will be prepared for consideration by Government in December 2023.
Growth in data
As consumers and businesses generate increasing levels of data by using products and services, the volume of data is growing exponentially and shows no signs of slowing down. It is forecasted that by 2025, global data creation will grow to approximately 180 zettabytes, up from 44 zettabytes in 2020.
The need to maintain and manage all of this consumer and business data, has driven the growth in data centres. Data-driven innovation is poised to bring enormous benefits to citizens and companies, with organisations investing in data-driven innovation showing faster productivity growth.
Under the EU’s Data Strategy published in 2020, two significant pieces of legislation were agreed, the Data Governance Act and the Data Act, which are intended to unlock the economic and societal potential of data and technologies.
Data centres play a key role in digitalisation of our economy and society, and provide the foundation for almost all online aspects of our social and work lives - including video calling, messaging and apps, retail, banking, travel, media, and public service delivery, such as healthcare.
They are fundamentally important as building blocks for the digital economy and necessary for many of the services that I just referred to - services we now take for granted - both in business and as consumers.
Data centres, along with connectivity and cyber security, are key enablers in facilitating the digital transformation of SMEs and securing the associated productivity and competitiveness gains.
And there has been a steady increase in businesses moving to cloud service providers, with many everyday ICT functions such as internet banking now reliant on cloud services. Transitioning to cloud computing services has many potential benefits for both public and private sector organisations, including providing greater resilience.
Data Centres growth in Ireland
While a large number of multinationals have established and made long term commitments in Ireland, we need to sustain Ireland’s attractiveness as a location of choice for cutting edge global technology businesses in order to strengthen the future of the Irish data centre industry. To do so, we will need to facilitate sustainable data centre development that minimises its environmental impact and adheres to our energy and enterprise policy objectives.
Frequently, public perception around data centres is that they drain Ireland’s energy supplies, increase our carbon emissions, and don’t generate employment. However, the reality is that data centres indirectly employ tens of thousands of people in Ireland, providing jobs across a range of enterprises, primarily from the technology sector.
It is also important to acknowledge that some data centre operators are corporate leaders in decarbonising data, many of which have committed to net zero carbon and 100% renewable energy goals.
Data Centres can help with decarbonisation and grid efficiency, through the use of Corporate Purchase Power Agreements (CPPAs), on-site renewables, demand flexibility, storage and other sustainable solutions to reduce the burden on the grid.
Demand flexibility is needed to avoid consumption of electricity from the power system during times of system stress. This helps mitigate the data centres impact on security of supply, with the power system less likely to face generation shortages at peak times.
Data centres also use innovative solutions for greater energy efficiency through management of waste heat and other resource efficiencies to facilitate the green transition. One such example is the District Heating Scheme in Tallaght where Amazon Web Services is supplying excess heat from their data centre to public sector and residential buildings.
Government Data Centre
From a public sector perspective, the Civil Service Renewal 2030 Strategy takes a ‘cloud-oriented’ approach to delivery of all services. This transition requires the ability to store and process data at sufficient scale, which relies on the availability of data centres. The Public Service ICT Strategy aims to build information and communications technology to deliver government services into the future.
As part of its strategic framework, the Government has committed to the creation of a data centre with the objective to deliver a purpose-built, high-quality and energy-efficient facility. This is an important element of the framework in fostering technology innovation and excellence across public services in Ireland, and for providing access for State bodies to ICT infrastructure, to drive efficiency, standardisation and consolidation.
Nonetheless, in Ireland as in other advanced economies, the speed and scale of our digital ambition has the potential to challenge our energy infrastructure as it undergoes a transformative decarbonisation.
It is the Government’s intention to harness our digital ambition where possible, and for data centres to contribute to our national objectives by facilitating investment in renewable energy, energy storage, ‘energy parks’ and other efficient and sustainable development opportunities.
While a pathway is developed to a more secure energy future, data centre energy requirements have to be balanced with the need to maintain a secure and stable supply of energy to the people and businesses of Ireland. For this to happen, digital and climate change policies need to move in tandem.
As part of our work to create a competitive enterprise environment, our intention is to ensure that sufficient capacity is provided to meet the needs of enterprise and the wider economy. This includes the strategic and coordinated development of the infrastructure necessary to underpin the modern “digital and green” economy.
The digital and green transitions can, and must be, complementary.
As we work towards achieving our long-term climate commitments and navigating the increasing challenges posed by climate change, we must ensure that the development of data centres and their operation is forward-looking and sustainable.
We have to look at how we can actively support their development to harness their potential in driving the green transition.
Tremendous advancements have been made in recent years in optimising data centres’ energy usage and efficiency. The research, innovation and investment required to continually strive for these improvements are positive indicators that the industry is continuing to move in the right direction.
The services and offerings of data centres for smaller and medium sized enterprises can also be highly advantageous from an energy-usage and sustainability point of view. As SMEs continue to realise the potential of going digital, the infrastructure must be in place to support this transition.
Co-location data centres allow SMEs to outsource their data security and storage requirements away from often costly and inefficient on-premise data centres, which traditionally tend to be much more resource-intensive.
Focusing on powering data centres through renewable energy sources is vital to progressing Ireland towards our net-zero targets. Government continues work across Departments to cultivate a strategic and coordinated approach to the development of the data centre industry that is necessary for both elements of the twin transition.
The Government Statement on the Role of Data Centres in Ireland’s Enterprise Strategy was revised in July last year. Its revision was designed to ensure that the decarbonisation and digitalisation of Ireland’s economy and society are complimentary and in harmony with environmental policy.
It takes account of the current constraints on the electricity system in the short-to-medium term and sets out the principles for data centre developments that are associated with strong economic activity and employment, and to make efficient use of our electricity grid. The Government is committed to ensuring that that principles are effective in prioritisation of future data centre development.
Ireland has set some of the most ambitious targets in the world for renewable electricity and Ireland’s energy system is going through a period of transformational change as renewable energy is scaled up to meet our renewable and climate targets.
Our climate and energy ambition is to increase the proportion of renewable electricity to up to 80% on the grid by 2030. This includes an increased target to achieve up to 5 GW of installed offshore wind generation by 2030.
We believe there is currently a unique opportunity for collaboration between industry, system operators, regulators and Government to work together to achieve our climate goals and optimise the use of renewable generation here in Ireland.
Embracing digital technologies is crucial for our continued economic progress as well as for meeting the demands of our people in a modern society. At a time in which we are ever more aware of our energy demands, the implementation of digital technologies can help us build sustainability and energy efficiency.
Ireland will continue to play a key role in Europe in advancing the Digital Decade strategy – the goal of which is the successful digital transformation of Europe by 2030 and for the Union to be digitally sovereign in an open and interconnected world.
As a leading European and global digital hub, and a member of the D9+ group of digitally advanced EU Member States, we continue to perform strongly in the latest EU Digital Economy and Society Index. We must continue to keep pushing ahead with our ambitions.
The next decade will be transformational for our businesses, economy and society and data centres are at the epicentre of these transformational changes and we must continue to support the future of the Irish data centre industry.
Today provides a great opportunity to bring together all those who contribute to the data centre market in Ireland, and I hope you all benefit from the engagement and networking opportunities presented here today.