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As we get closer to the end of another year, data centre investment and construction announcements continue at a steady pace over Q3 2019.
At a time when the construction sector
appears to be approaching a slowdown with the Ulster Bank Construction PMI indicating the steepest monthly decline in activity since June 2013, the pace and trajectory of data centre construction remains consistent.
Earlier this year, data centres were projected to bring in over €4.5bn in direct investment by 2025, which remains on course despite uncertainty due to Brexit fears. This may become crucial to the construction sector, should it see a slowdown in other segments of the market.
Data centres provide a necessary part of our modern digital existence economically and socially as highlighted by Mark Foley, CEO of Eirgrid, at their recent 2020-2025 strategy launch: "Data centres are a manifestation of that transformation... the reality of the situation is they are responding to the needs of business... to the needs of society. Our job is to make
sure we have the capacity to connect them, and that the generation capacity is there to
supply”*.
EirGrid’s commitment to supply 70% of the grid (a further 10,000 MW), through renewable sources and investment of €2 billion, is welcomed by the industry and viewed as achievable.
Data centres are core infrastructure of the new digital economy. They are also key component of Irelands FDI proposition, which underwrites more than 100,000 jobs in the ICT sector. This sector produces €69.3bn in exports making it the largest export sector in the economy. From analytics that measure weather patterns to social media usage, data is a growing part of our day to day life.
The sector has directly funded renewable energy projects here in Ireland. The most
significant to date has been Amazon’s decision to invest almost €200m in the construction of a wind farm off Donegal without subsidies. This is the first of its kind in Ireland. It’s expected that such investments will continue to be made in the coming years. Wind power produces 37% of electricity on our grid and has seen a 100% increase in capacity since 2012.
Demand for data centres will continue to grow internationally, centred on consumer and economic needs. As a result large scale data centre construction will continue, but the industry remains focused on reducing its carbon footprint by focusing on a renewable-only policy and driving further efficiencies in their operations.
Major announcements this quarter include that of the K2 data centre construction which has been approved for construction in Ballycoolin. The attraction of the two, three-storey data centre facilities, spanning around 29,000 square metres each, further highlights Ireland’s growing position as a market leader, supported by its growing sustainability agenda.
We have seen other major clusters in the Dublin area progress, including the Grange
Castle cluster, with CyrusOne data centre group beginning construction of their €400M development. EdgeConneX have also lodged a planning application to double the size of their campus in the same location.
Internationally, Google has recently announced a $3 billion investment in its next generation of ‘Green’ data centres. More progress needs to be made but we remain positive that the industry will play its part in the sustainability agenda.
We look forward to the developments in the industry in 2020 as data centres positively
impact Ireland’s commercial construction and energy sectors.
Garry Connolly
President & Founder - Host in Ireland
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